Shake-up to help SMEs in bidding process

The European Commission wants the current regime for public procurement contracts to be reformed so that SMEs have a greater chance to secure work in the sector.

Experts at law firm Ward Hadaway, which has offices in Leeds, say the changes offer real hope for SMEs to compete with larger businesses for public sector contracts. As part of its Buy Yorkshire campaign, the Yorkshire Post is campaigning to shake up public sector procurement rules.

Public procurement accounts for around 17 per cent of the GDP in the EU, but SMEs only win 31 per cent to 38 per cent of public sector contracts, said Ward Hadaway, despite SMEs making up over half of the total turnover of the EU economy.

Proposals put forward by the EC include sub-dividing contracts of more than 500,000 euros into different ‘lots’ to allow smaller businesses to bid more effectively for work; limiting requirements for companies to bid for work; cutting down on red tape by allowing businesses to self-declare information about their capabilities at the initial bidding stage; and making EU members provide support structures offering legal and economic advice, training and assistance to businesses in preparing and conducting procurement processes.

Karen Andrews, partner in the public sector team at Ward Hadaway, said: “Simplifying the procurement process will hopefully make it easier for SMEs to compete on a level playing field with larger businesses whose scale and resources have previously given them a substantial advantage when bidding for public sector work.”

Despite cuts to public spending, the public sector still represents “a potentially huge market” to SMEs, she said. Michel Barnier, European Commissioner responsible for the internal market and services, said the reform is “necessary, ambitious and realistic”.