Why SMEs Are the FM Sector’s Secret Weapon in 2025

The FM landscape is shifting and SMEs are no longer the underdogs.

According to the RICS H2 2024 Facilities Management Survey, there has been a broad-based increase in demand across all FM sectors, including public, commercial, and industrial. This rising demand often translates into more subcontracting opportunities, which SMEs are well-positioned to fill. Based on RICS 2024 survey showing broad-based demand growth across FM sectors.

CBRE highlights that AI and data-driven decision-making are becoming central to FM operations. SMEs that adopt these technologies are gaining a competitive edge, especially in predictive maintenance, energy efficiency, and smart building services. Highlighted by CBRE and IWFM as a growing differentiator, especially for SMEs adopting smart tech.

The push toward net-zero carbon and sustainable FM practices is creating new niches for SMEs offering green solutions. Services like energy audits, waste management, and eco-friendly cleaning are in higher demand. Driven by UK government mandates and client expectations for greener operations.

The UK construction industry’s GVA reached £108.7 billion in 2023, boosting demand for FM services in new developments. SMEs are often engaged in post-construction FM, such as building maintenance and lifecycle management. Strong GVA growth in construction fuels FM demand, especially for SMEs in post-build services.

The FM market is maturing, with a shift from bundled services to specialised, high-value offerings . This trend favours SMEs that can deliver niche expertise or localised services. Market maturity is pushing customers toward niche, high-value services—an area where SMEs excel.

The 2025 Procurement Shift: A Game-Changer for SMEs

One of the most transformative shifts in public sector procurement came into force on 24 February 2025; the Procurement Act 2023. This landmark legislation consolidates four separate procurement regimes into a single, simplified framework, aimed at making public contracts more accessible, especially to SMEs and VCSEs (Voluntary, Community and Social Enterprises).

For SMEs operating in facilities management, this is a game-changer.

Key Reforms Designed to Support SMEs

The Act introduces several SME-friendly provisions, removing many of the traditional barriers smaller providers have faced when competing for public contracts:

• Simplified Framework: By unifying previous laws, the Act streamlines complex procurement procedures, making it easier for all suppliers—especially SMEs—to navigate the process.
• Smaller Contract Lots: Public bodies are now encouraged to break large contracts into smaller, more manageable lots, significantly boosting accessibility for SMEs that may lack the scale to bid for large, bundled deals.
• Flexible Procedures: A new “competitive flexible” procurement route allows public buyers to tailor tendering processes, promoting fairness and agility in supplier selection.
• Transparency & Oversight: The Act mandates clearer contract notices, 30-day payment terms, and constructive bid feedback, levelling the playing field and increasing visibility for smaller firms.
• Social Value Focus: For the first time, public contracts must formally consider local impact, sustainability, job creation, and community value—criteria where SMEs consistently deliver above expectations.

Guided by the National Procurement Policy Statement (NPPS)

In parallel with the Procurement Act, the updated National Procurement Policy Statement also came into effect on 24 February 2025. It outlines strategic priorities for public procurement, which all contracting authorities must now “have regard” to (unless explicitly exempt). These priorities strongly align with the strengths of SME providers.

1. Driving Economic Growth

• Encourages public buyers to support local economies, fostering innovation and inclusive growth.
• Emphasises opportunities for SMEs to compete more fairly for government contracts.

2. Delivering Social and Economic Value

• Requires procurement decisions to account for social value outcomes, such as job creation, skills development, and measurable community impact.
• SMEs are often embedded in their local communities, making them well-placed to meet and exceed these requirements.

3. Building Commercial Capability

• Promotes investment in internal skills and resources across contracting authorities to engage a broader, more diverse supplier base.
• Simplification of procurement processes is encouraged to reduce red tape and foster SME participation.

Direct Support Measures for SMEs

To ensure these reforms deliver tangible change, the government has introduced specific recommendations for contracting authorities:

• Action Plans: Authorities are encouraged to develop plans to increase SME and VCSE engagement, actively working to remove access barriers.
• Contract Design: Best practice guidance now recommends designing contracts with SMEs in mind, such as offering smaller, more focused lots.
• Improved Transparency: Authorities must clearly document how NPPS goals are addressed in procurement, ensuring fairness, accountability, and visibility in the tendering process.

Why SMEs Outperform Larger Providers

So, why are SMEs suddenly outperforming their larger counterparts? It comes down to three major strengths:

• Agility: SMEs can mobilise quickly, adapt to changing client needs, and provide flexible contract structures. There’s less bureaucracy and more action.
• Innovation: Without the burden of outdated systems or bloated hierarchies, SMEs can invest in modern, efficient technologies. DMA Group’s proprietary BiO platform is a prime example—offering clients real-time performance monitoring and smart reporting.
• Relationships: SMEs build closer, more personal relationships. Customers often have direct access to decision-makers, not just layers of account managers.

In contrast, larger corporations can be slower, less responsive, and more process-bound—making it harder to deliver the fast, tailored service today’s FM customers’ demand.

DMA Group: An SME Built for Today’s FM Challenges

At DMA Group, we’re proud to be a privately-owned SME with roots going back to 1803, combining tradition with cutting-edge innovation. Here’s what sets us apart:

• Award-winning sustainability: Recognised for delivering energy-efficient, low-carbon solutions.
• BiO® platform: Our in-house and award-winning service management platform system helps customers track, manage, and optimise performance in real-time.
• Proven success: From supporting the UK’s first carbon-neutral community hospital at Rye Winchelsea and District Memorial Hospital to maintaining excellence for Leigh Academies Trust, our partnerships speak volumes.
• People-first values: We believe in teamwork, respect, and quality—and it shows in our long-term relationships and trusted service delivery.

Choosing the Right FM Partner in 2025

With regulations shifting and customer expectations rising, choosing the right FM partner matters more than ever.

Working with an SME offers:

• Better value through tailored solutions and local delivery.
• More impact through social value alignment and innovation.
• True partnership, not just contract management.

As you evaluate suppliers, ask: Do they align with your values? Can they adapt quickly? Will they be a name in your inbox, or a partner on the ground?

2025 Belongs to the Agile, the Innovative, the Local

The FM sector is changing fast, and SMEs are proving they have what it takes to lead. With public procurement opening new doors and customers seeking smarter, greener, more personalised service, the stage is set.

DMA Group is proud to be at the forefront of this transformation. Ready to experience the SME advantage for yourself?

Get in touch to find out how we’re making buildings work better—together.