Lack of know-how, my arse
What a typical response from a born jobs-for-the-boys pension collector. Not a word of sense to be seen.
1. SMEs are just as good at filling in any gaps by subcontracting, if not more so as they are more willing to. They can and do access the know-how.
2. Big companies can't usually access the know-how at all. Even if they have it, the guys on the job don't and they don't know who else in their company might. But they never admit it, they just send in any old clown, refuse to resource him, and pretend it's all good. Or the know-how belongs to a competitor, in which case they will break it irretrievably before handing over.
3. The only know-how that SME's lack is how to tilt the playing field your way during bidding, for example: a) the list of past salesmen your target got chummy with, b) ingrained instinct to lie through your teeth to get the contract then think up excuses afterwards, c) the greed to charge a ridiculously high price, thus giving the impression you have recognised the full technical import of work involved.