Monday 3 November 2008

EU public procurement: Best practices for small business II

In the context of the Small Business Act for Europe, the European Commission suggested public contracting improvements 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):

In this second post on the European Code of Best Practices, we look at the rest of the proposals concerning public procurement.


Reasonable selection criteria and financial requirements

Selection criteria have to be relevant to the contract and proportionate to the task. Unreasonable demands limit the number of bidders.

Economic operators and groups of economic operators can prove their combined economic and financial standing and technical ability. This offers opportunities for small and medium-sized enterprises (SMEs).

Less taxing financial guarantees improve the participation of SMEs.


Red tape

‘Alleviating the administrative burden’ is the section where the Commission discusses how to cut some of the red tape posed by the Procurement Directive. If reasonably applied, the Directive would for instance require only the best bidder to present all the certificates demanded.

The purchasing authority could accept documentation already submitted in another recent tender process.

Short and simple forms and certificates would help SMEs to provide the relevant information to the contracting authorities in time.


Value for money

The Code of Best Practices underlines the option to award contracts, not on the lowest price, but to the economically most advantageous offer, where quality, technical merit, functional characteristics, running costs, cost-effectiveness, after-sales services etc., as well as life-cycle costs, could offer opportunities to innovative SMEs.

When contracting authorities define their needs in terms of performance and functional requirements, innovative SMEs may be better able to submit bids.


Sufficient time

Prior notices can help small and medium-sized companies to find partners for joint bidding.


Paying on time

Improved payment terms and practices are crucial for SMEs, which seldom have large reserves of liquidity.


By highlighting good practices from various member states, the Commission encourages the same kind of meritorious competition between regulatory systems as embedded in the open method of coordination.

Ralf Grahn

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