Open to all Values

In the second of our ongoing series of articles from BiP Solutions MD Ron Burgess, he discusses other routes to getting public sector work, than that seen via the OJEU.

Last month I debunked the myth that all contract opportunities that are sent to the Official Journal of the European (OJEU) for publication are actually high value and beyond the capacity of micro-SMEs to satisfy.

This month I want to discuss contract opportunities that are not announced through the OJEU, including low-value opportunities suitable for micro-SMEs.

Recent actions by the European Commission against Member States have clearly identified the Commission’s consideration that European Court of Justice (ECJ) case law confirms that even when the financial sum involved falls below the EC Procurement Directives thresholds, (above which the full procedural requirements of the Directives apply), the contracting authority must now ensure a degree of advertising sufficient to ensure competition, to avoid discrimination on the grounds of nationality and to allow the impartiality of procurement procedures to be reviewed.

The scope and form of such advertising depends on the nature of the service and the extent to which a contract is of potential interest to regional, national or EU-wide service providers.

As a micro-SME you now have the right to know about all contract opportunities, so ask your local public authorities what they are doing to ensure that they comply with the ECJ judgement with regards to their openly advertising all low-value contract opportunities.

The Official Journal also now accepts advertisements for low-value contract opportunities. Other sources include public authorities’ own websites.

Finally, companies that win new contracts are often soon on the lookout for suppliers to act as subcontractors. The actual contract may have been far too ambitious for your company, either due to overall value or the fact that it required distribution or delivery outside your area, but that does not mean that there are not opportunities to come from such contracts. There often are.

Keep your eyes open also for contracts that are open for tender that may subsequently require your products or services. For instance, if a public body is outfitting new meeting rooms, will they be requiring videoconferencing to place in them? Does that new library building that is being advertised need digital signage? Lateral thinking can bring many rewards.

Public authorities are also required by the European Commission to publish award notices in the OJEU for all high-value contracts and these notices should identify the winning bidder, in order to help SMEs seek subcontractor opportunities. It may be too late to gain part of that business but the same companies will be tendering and winning new business in the future, so promoting your company’s skills set will not be a waste of time.

Some departments publish the names of companies involved during a procurement process prior to contract award, as an aid to potential sub contractors.

Good buying authorities will also encourage their main suppliers to adopt supply chain management practices that integrate SMEs into their supply chain. Ask the authorities you wish to work with if they have such a policy. If they do not, suggest it is time they did.

I would also like to focus on how public bodies in your area and beyond could do more to open their contract opportunities to SMEs, and therefore help you out.

Many local government and other public bodies talk about how they wish they could help SMEs gain better access to their contract opportunities, but claim that, unfortunately they are unable to do so because of European Union procurement rules.

This, in fact is not the case. EU rules are not a barrier and can actually be used to actually help SMEs gain entry to the public sector marketplace.

Unfortunately, few public bodies care to spend time investing in developing their procurement strategy so that it not only delivers best value for tax-payers.

SMEs can and do bring significant benefits to the public sector by creating greater competition, providing innovative solutions and delivering lower prices with higher quality of service. They are often far more flexible and specialised.

As stated above, the EU public procurement legislation can be used to improve SMEs’ ability to supply the public sector. The regulations state that contracting authorities may waive such application in respect of lots, the estimated value of which, net of VAT, is less than approximately €80,000 for services and supplies, or as much as €1 million for works, provided that the aggregate value of those lots does not exceed 20 per cent of the aggregate value of the lots as a whole.

The size of such contracts is perfect for SMEs and, more importantly, they do not have to be let using the EC procurement processes.

So why don’t public bodies use this allowance? Often because they do not know this option is available to them. Another reason is that it is considered resource intensive to have to let two contracts rather than one. However, given that the small value allowance does not require compliance with the Directives, this is not really the case.

Ask your local public sector organisations how their procurement strategy helps SMEs. For instance, does it seek to ask:

• If there are there elements best left outside the main contract and offered as a separate small contract?

• Whether it is really a good idea to place all of the work with one supplier? Would there for example be advantages in dividing it into lots? If so, be clear about how the requirement is to be divided.

• Should the contract be let in lots either on a product or geographical basis?

My final advice to you is, don’t accept the idea that public purchasing practices cannot be changed. Use your representative trade bodies, Chambers of Commerce, Members of Parliament and other business representative groups to lobby and pressure for change. The changes and challenges outlined in my series of articles can deliver, not only for your company and others companies, but also for the benefit of wider society. That surely is an aim worth pushing for.

In the next article of this series on public sector contracting, my colleague Eddie Regan will provide you with a simple guide to how you can tender more effectively for the opportunities that are open to SMEs.

Article Categories