The growth of Internet use and subsequent uptake of e-commerce have significantly changed the business environment. Automation of procurement processes and functions has magnified opportunities and exacerbated the inherent risks in public sector procurement. The Scottish Executive has established a common e-procurement approach for public procurement agencies in Scotland. This paper examines the Scottish model and compares it with the global e-procurement experience to reveal the benefits and dangers of centralised requirements and aggregated orders. The potential impact of e-procurement policy on local Small and Medium Enterprises (SMEs) is analysed and recommendations made for future policy. Case studies demonstrating benefits to Scottish SMEs are reviewed. The paper concludes that the efficiency benefits of e-procurement make its widespread adoption inevitable and while e-procurement presents opportunities for SMEs, public policy makers should be alert to the risks of aggregation, centralisation and skills gaps.