Saturday, 1 November 2008

EU public procurement: Best practices for small business I

What can the European Union and the national administrations do to open up public procurement to small businesses?

Improved possibilities for small and medium sized enterprises (SMEs) would offer them growth potential, and more vigorous competition would lead to better use of taxpayers’ money when contracting for works, supplies and services.

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Against the backdrop of the Small Business Act for Europe (see earlier post), the European Commission presents its suggestions in the Commission staff working document ‘European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts’, Brussels, 25.6.2008 SEC(2008) 2193 (22 pages):

http://ec.europa.eu/internal_market/publicprocurement/docs/sme_code_of_best_practices_en.pdf

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Purposes

According to the Commission, the overall objective of the ‘European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts’ is to allow Member States and their contracting authorities to fully exploit the potential of the Public Procurement Directives in order to ensure a level playing field for all economic operators wishing to participate in public tendering.

In other words, the Code of Best Practices sets out to answer what can be done within the boundaries of EU procurement legislation, by improving contracting authorities’ procurement culture.

Two purposes follow from this:

1) Guidance on how member states and their contracting authorities can apply the EC legal framework in a way which facilitates SMEs' participation in contract award procedures.

2) Positive national rules and practices that enhance SMEs' access to public contracts are highlighted.

The Code of Best Practices deals with a number of problem areas. The problems and solutions offer a good point of departure for ministerial guidance and improved practices among procurement entities.

At the same time, for small businesses intent on expansion into public contracts the document contains useful information on many aspects of public, as well as references to additional sources.

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Contract size

Contracts are often too big for small and medium sized companies.

Contracts can be divided into lots, which take the capacity and the niche of small businesses into account.

Small enterprises may bid as a group, and contract authorities can draw attention to this possibility.

Framework agreements can be concluded with several economic operators, instead of just one big supplier.

Sub-contracting offers an alternative for small and medium sized enterprises, if the conditions are fair.

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Information on business opportunities

E-procurement is one possibility to ensure quick, cheap and easy information on business opportunities to SMEs, but in some countries their features could be improved and central portals launched. Information in other Community languages would bring taxpayers added single market benefits.

SMEs can get advice and support from the Enterprise Europe Network (EEN).

The contract authorities have an obligation to give bidders feedback, which gives the companies the opportunity to improve their future bids.

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Clear information

Training and guidance for contracting authorities should take account of the needs of small businesses for clear information.

There is a need to improve conferences, seminars, training sessions and helpdesk services, especially for SMEs.

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We will look at the rest of the suggestions in a future blawg post.


Ralf Grahn