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Evaluation of SMEs’ access to public procurement markets in the EU

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EVALUATION OF SMES’ ACCESS TO
PUBLIC PROCUREMENT MARKETS
IN THE EU
DG Enterprise and Industry

Executive Summary
September 2010
Document Control
Document Title Evaluation of SMEs’ access to public procurement markets in the
EU (2009 update)
Executive Summary
Job No. 30257541
Prepared by Máté Péter Vincze, Juliette Mathis, Anca Dumitrescu, Ali Erbilgic,
Eva Coscia, Maurizio Megliola
Checked by Nick Bozeat, Máté Péter Vincze
Date September 2010

2
 GHK Consulting Ltd.
Heckfield Place
526-528 Fulham Road
London SW6 5NR

+44 (0)20 7471 8000

DG Enterprise and Industry

Evaluation of SMEs’ Access to
Public Procurement Markets in the
EU

Executive Summary
September 2010

Prepared by:
Máté Péter Vincze
Juliette Mathis
Anca Dumitrescu
Ali Erbilgic
Eva Coscia
Maurizio Megliola

Supervised by:
Nick Bozeat

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Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

CONTENTS
Introduction ....................................................................................................................... 5
Trends in public procurement above EU thresholds ........................................................... 5
Public procurement and small and medium-sized enterprises ............................................ 6
Public procurement practices on the ground ...................................................................... 7
SMEs and electronic public procurement ......................................................................... 10
SMEs, innovation and public procurement ....................................................................... 11
Conclusions and recommendations ................................................................................. 13

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 Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

EXECUTIVE SUMMARY
Introduction
This report, prepared for the European Commission, presents the main findings of an
assignment concerning the “Evaluation of SMEs‟ access to public procurement” led by
GHK under the aegis of the European Policy Evaluation Consortium (www.epec.info), in
cooperation with TXT e-solutions s.p.a., Milan.
The study follows an earlier report published in 2007 which analysed data on public
1
procurement from 2002 to 2005. Its main purpose is to gauge the extent to which SMEs
access public contracts above the Community thresholds, the progress made since 2005,
and to analyse patterns and factors enhancing SMEs‟ participation. It also explores the
opportunities of eProcurement and the use of innovative solutions in relation to SMEs‟
access to public contracts.
The findings of the study are based on three distinct strands of primary research.
First, a comprehensive statistical analysis was conducted, covering all contract award
notices published on Tenders Electronic Daily (TED) between 2006 and 2008. A sample of
about 40,000 individual companies securing public contracts were selected and sent for
identification and classification to Dun & Bradstreet. The first classification into micro,
small, medium-sized and large companies was refined manually.
Second, 296 European procurers and 887 European companies participating in public
procurement were surveyed. The respondents were asked about their views about
measures supporting SMEs‟ participation, about the use of electronic tools and innovation
in public procurement. Third, a series of case studies was prepared, looking at how specific
programmes or instruments are implemented on the ground.

Trends in public procurement above EU thresholds

The number of contract award notices published on TED has increased steadily between
2002 and 2008, from 58,427 to 122,653. The increase was partly due to the entry of new
Member States in 2004 and 2007, and partly due to increased activity from EU15
countries. The rate of growth has accelerated in 2007 and 2008, to an average 19% per
annum. The combined value of above-threshold contracts awarded rose at a considerably
slower pace, by 2% only. Correspondingly, the average value of CANs has decreased
markedly in this period.
In 2008, direct cross-border procurement (meaning that the supplier is located in a different
country than the procurer) accounted for 1.5% of all published contracts above the EU
thresholds, corresponding to about 3.7% of their combined value. In general, local
and regional authorities engage less frequently, and public utilities more often in direct
cross-border transactions. Procurers from smaller countries tend to award more contracts
to companies abroad.
German and Cypriot companies, together with Austrian and Estonian enterprises were
particularly successful in winning contracts abroad. On the other hand, the domestic
market was almost the exclusive source for revenues from public contracts for Romanian,

1
Evaluation of SMEs Access of SMEs to Public Procurement Markets in the EU (2007)
http://ec.europa.eu/enterprise/newsroom/cf/document.cfm?action=display&doc_id=3691&u
serservice_id=1&request.id=0

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Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Slovenian, Bulgarian and Polish companies. The target markets for companies engaged in
cross-border procurement are often neighbouring countries.

Public procurement and small and medium-sized enterprises

Overall trends
In the reference period between 2006 and 2008, an estimated 60% of above-threshold
contracts were won by SMEs. Micro-enterprises accounted for 18%, small enterprises for
22% and medium-sized enterprises for 20% (data exclude financial services).
In terms of the value of contracts, this corresponds to a 33% market share for SMEs.
Micro-enterprises secured a share of 6%, small enterprises 11%, and medium-sized
companies 16%.

Figure 1 Proportion of SMEs in the number of Figure 2 Share of SMEs in the total value of
contracts awarded contracts awarded

0 50 100 0 50 100

61 31
2006 18 22 20 39 2006 6 9 16 69
58 31
2007 18 21 19 42 2007 5 11 15 69
61 38
2008 18 24 20 39 2008 6 13 19 62
60 34
Total 18 22 20 40 Total 6 11 17 66

Micro Small Medium Large Micro Small Medium Large

Breaking down the figure to individual years, SMEs‟ proportion in the number of contracts
won oscillated between 61% and 58%, whilst in terms of total value of contracts, their
share increased from 31% in the first two years covered to 38% in 2008.
The figures on the proportion of contracts won by SMEs remained virtually
unchanged vis-à-vis the preceding study (the estimate was 61% for 2005), but the
estimated market share of SMEs is lower than the data for 2005 (which was 42%). This is
to a great extent a result of the improved methodology used. The figures comparable to the
previous study, i.e. before carrying out a series of additional checks, were 35% for 2006
and 2007 and 42% for 2008. This leads to the conclusion that SMEs‟ access to public
procurement contracts above the Community thresholds did not change markedly from
2005 to 2008.
The share that SMEs could in 2006-2008 secure for themselves was however 14 to 21
percentage points lower than their overall weight in the economy (as measured by
combined business turnover). Whilst medium-sized enterprises were not unduly under-
represented in this regard, micro and small enterprises‟ role was clearly limited.
The level of under-representation varies greatly across countries: SMEs in the Czech
Republic, Cyprus, Spain and Portugal were mostly disadvantaged, whilst their counterparts
in Luxembourg, Slovakia, Germany and Ireland secured a greater access to public
procurement than their significance in the overall economy would warrant.

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 Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Factor analysis of SMEs’ success

A detailed breakdown analysis as well as a logistic regression model shed some light on
the factors that enable or disable SMEs to compete successfully for public contracts:
 The specific procedure chosen does not seem to have an influence: SMEs win
open, restricted and negotiated procedures, as well as competitive dialogue in similar
proportions – although for the latter, they tend to win only smaller tenders, securing
only 6% of competitive dialogue contracts in terms of value.
 As regards to the ‘economically most advantageous tender’ (EMAT) criteria,
contracts using are somewhat less likely to be won by SMEs, if all other factors
are equal. SMEs‟ share in the combined value of contracts evaluated under EMAT
criteria was only 31%, compared to 41% when the tender with the lowest price was
selected.
 The large size of contracts is probably the most important barrier for SMEs
accessing public procurement. Whilst SMEs won around 60% of contracts below 1
million euro, they won only 30% of contracts above 5 million euro. The regression
analysis undertaken in the study confirms that the higher value the contract, the less
the likelihood of SMEs winning the contract. The value threshold above which SMEs
are seemingly disadvantaged is at around 300,000 euro.
 Breaking down tenders into lots is often viewed as one of the most important
means of helping SMEs to access public contracts – and the regression analysis
confirms that using lots increases the probability of SMEs winning the contracts indeed,
even after controlling for the resulting lower contract value. Many contracting
authorities and entities (CAEs) take advantage of this legal possibility: 27% of contract
award notices published between 2006 and 2008 were broken down into at least two
lots (with a slightly increasing trend). Cyprus, Slovenia, France and Poland are the
countries that use lots the most frequently.

Public procurement practices on the ground

The survey amongst procurers and companies focused on access to information on public
procurement, SMEs‟ perceived barriers to access contracts and possible remedies to these
problems.

Access to information
Patterns in the use of information sources to learn about tender opportunities have not
changed much since those reported in the preceding survey in 2007. For companies, the
most frequently used sources of information are national (official or commercial) public
procurement portals, used often or very often by 60% of respondents. However,
newspapers and professional journals seem to have lost ground (from 34% to 13%), whilst
electronic notification systems have significantly increased their role.
Large companies generally seem to rely on a wider range of information sources
than SMEs, and the gap seems to have widened since the 2007 report. The
differences between the enterprise categories are the widest in the use of (paper-based)
government procurement publications, the TED and official national procurement portals
and in receiving direct notification from the procurer. These sources are used by 43-46% of
large enterprises regularly, but only by 26-29% of micro enterprises.
The majority of companies surveyed were content with the information they received about
tendering opportunities – satisfaction rates amongst small (56%) and especially micro
enterprises (45%) are however trailing that of large enterprises (66%).

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Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Barriers to accessing public contracts

The most significant barriers to access public contracts is the perceived over-
emphasis on price (often a problem for 54% of responding companies), long payment
terms and late payments, lack of debriefing, and onerous administrative requirements.
Relatively few companies claim that the large size of contracts and disproportionate
technical or financial requirements were a problem.
There is some progress since 2007 in mitigating the above shortcomings: insufficient
time to bid, a high administrative burden, and especially the lack of opportunities for asking
procurers questions were considerably less often indicated by companies as problems.

Main barriers to companies in public procurement

(Proportion of companies encountering it as a problem often or very often, by size class)
Micro Small Medium Large Total
Over-emphasis on price 58 55 51 55 54
Long payment terms 52 42 38 36 40
Late payments 47 36 39 35 38
No debriefing 43 36 33 36 36
Administrative burden 45 34 35 30 34
Lack of clarity 38 28 29 28 30
Limited options for interaction 30 23 19 22 23
Insufficient time to bid 27 23 14 20 20
Disproportionate financial criteria 34 21 18 17 20
Lack of information on opportunities 23 22 18 17 19
Tenders not evaluated fairly 16 14 26 30 19
Disproportionate technical criteria 18 18 14 13 15
Large contract value 22 15 5 1 7
Joint fulfilment of criteria not allowed 8 5 6 4 5

Most of the barriers are perceived by SMEs and large companies alike. In general,
there is barely any discernible gap between the answers of large and medium-sized
companies, and small companies are only slightly more likely to perceive the problems
listed. The only category that faces the various barriers to accessing public contracts
significantly more often are micro enterprises. The most often cited barrier for micro
enterprises (often or very often a problem for 58%) is the over-reliance on the bid price in
the selection of tenders. But the problems they feel significantly more frequently than larger
companies are too large contract values; the use of disproportionate financial
requirements; the administrative burden; and problems in connection with long payment
terms or late payments. The proportion of micro enterprises indicating these as barriers
exceeds that of large enterprises by 10 to 20 percentage points. A lack of clarity of how
tender documents are written, and a lack of appropriate debriefing after unsuccessful bids
were also problems more commonly encountered by micro enterprises than larger
companies.

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 Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Measures to enhance SMEs’ access

The measures deemed most helpful by SMEs to enhance their access to public
contracts are: more and better dialogue with the bidder (predominantly to clarify
requirements), and the reduction of administrative burden caused by excessive paperwork
duties. The views are more or less the same across all SME size classes. Pre-selection
mechanisms and shortlists, framework contracts and agreements and trainings for bidders
are however slightly more favoured by larger SMEs, whilst the use of smaller contracts or
subdividing contracts into lots are more likely to be seen as helpful by small and micro-
enterprises.

Key measures helping SMEs in public procurement

(Proportion of SMEs seeing the measure as helpful or very helpful, by size class)
Micro Small Medium Large* Total
Dialogue with the procurer 80 79 80 .. 80
Less paperwork 78 78 81 .. 80
Supplying certain documents at later stages 69 73 75 .. 74
Opportunity to submit tenders electronically 75 67 70 .. 70
More free information on tenders 70 65 65 .. 66
Use of pre-selection and shortlists 51 54 64 .. 58
More time to submit tenders 53 51 47 .. 50
Smaller contracts/use of lots 53 53 40 .. 47
Trainings for bidders 43 42 51 .. 47
Use of framework contracts/agreements 34 45 48 .. 44
* Views of large companies included in the total but not separately displayed due to the small number of
responses

Most contracting authorities try to address the constraints on SMEs in accessing

public contracts, and their efforts are generally in line with SME demands. The
approaches revolve around three major initiatives:
 Overcoming the limited technical financial capacities of SMEs. The most popular option
here is allowing the joint fulfilment of the necessary technical or financial criteria, and
many procurers also broke down contracts into lots.
 Improving the dialogue with SMEs. Most CAEs communicate during the tendering
phase with bidders, responding to specific questions and requests for clarification.
Debriefing is also often used, especially by UK procurers.
 Simplifying the procurement procedure. Many procurers allow the completion of the
tender after submission, so that omitting certain documents does not lead to the
automatic exclusion of bids. Requesting complete documentation only when the
company has been shortlisted or when the bid was selected is also frequently done by
CAEs in order to ease the administrative burden on companies tendering.
In addition, various early market engagement initiatives, trainings, support tools for
proposal writing, speedier management and payment procedures are employed as generic
tools encouraging SMEs to participate; while some procurers also use more direct

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Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

instruments such as „community benefit clauses‟ and sometimes even some forms of „SME
quotas‟ (e.g. reserved contracts procedures).
Even so, 36% of CAEs felt they could do more to facilitate SMEs‟ access. The barriers to
this are associated with the lack of a concrete policy focus on SMEs, insufficient time and
human resources and a general risk aversion.

SMEs and electronic public procurement

Electronic public procurement is relatively widespread: 73% of surveyed procurers use
eProcurement tools, and 82% of companies. Use has grown markedly since the 2007
report (the equivalent figures were 58% and 42% back then, respectively).
Amongst those companies that are engaged in eProcurement, the electronic means are
mostly used for accessing information on tenders and tender documentation (by 75-
76% of respondents). 38% of survey participants submit their tenders fully electronically
at least sometimes. Electronic auctions are not widespread, only 17% of companies
participate from time to time. The patterns of use are very similar across medium-sized and
large companies. Smaller companies however lag somewhat behind (e.g., only 26% of
micro enterprises participates at least sometimes in procurement procedures that are fully
electronic).

Use of eProcurement tools

(Proportion of companies using a given tool at least sometimes, by size class)
Micro Small Medium Large Total
Accessing tender documentation 58 76 78 77 76
Information on opportunities 58 74 80 76 75
Submitting full tender 26 37 48 36 38
Submitting parts of tender 29 29 40 35 35
Information on evaluation 21 32 31 29 30
Electronic auction 11 12 23 17 17
Full electronic case handling 26 40 47 46 43

Companies, SMEs and large companies alike, find eProcurement solutions highly
beneficial. The key positive factors are: swifter access to information; access to a larger
pool of tender opportunities; ease of search for relevant opportunities; easy access to
tender documentation; time and cost savings during tendering; and, easier communication
during the tendering phase. Additional benefits mentioned included the avoidance of
duplications, greater transparency, better organisation of the process, swifter interaction
and reduced paper consumption. Importantly, eProcurement may also have disadvantages
to companies. The main problems are considered by both SMEs and large enterprises to
originate from increased competition (a very important problem for 23% of respondents)
and the improved possibilities for procurers to pool contracts together, increasing contract
size and pressing down unit price (11%) - such problems should however benefit procurers
and the taxpayer.
The most frequently cited barrier to SMEs not using the tools is a lack of knowledge
of the electronic tools and procedures amongst responsible staff. Concerns about the

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 Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

security of the systems, and problems originating from the lack of technical resources
seem to be rare. The historical bottlenecks of inadequate ICT capacities and lack of trust
seem to be largely mitigated. Some contracting authorities (34%) also face barriers to
implementing eProcurement solutions. The main barriers indicated are bidders‟ preference
for paper-based procedures (14%), the lack of sufficient technical and of human resources
(14-14%); and, concerns with transparency and traceability (9%).
Successful eProcurement initiatives on the ground tend to build on a solid legal and policy
base and ensure adequate buy-in from public procurers and business. Training and
support desks have proven useful. Good practice involves one-stop shop initiatives offering
highly customisable eProcurement services; constant feedback; and solutions effectively
reducing the administrative burden (simplified procedures, templates, supplier profiles etc.).

SMEs, innovation and public procurement

Public procurements involves innovation in two ways. First, on the “how” public purchasers
are proceeding with their demands, using or not methodologies that encourage SMEs
participation. Second, on the “what” public procurers are acquiring, since it is commonly
recognized that SMEs are innovation leaders and enablers.
The set of 12 innovative practices included in this report are already relatively widely
used in Europe, especially by contracting authorities in the Netherlands and UK. Also,
small procurers do not seem to be using less innovation in their procurements than large
ones, issuing hundreds of tenders per annum. The most frequently applied solutions are
„economically most advantageous tender‟ (EMAT), implemented by 87% of responding
procurers, obligation to migrate to the „best available technology‟ (80%), flexible functional
specifications instead of narrow technical prescriptions (80%), and an emphasis on social
requirements in tenders (80%). More sophisticated contractual arrangements such as the
sharing of profit gained from allowing third party access, or leaving the intellectual property
rights resting with the supplier, are less often used.
The experience gap between micro, small, medium-sized and large enterprises in the
survey was small: all company size classes seem to have encountered the 12 innovative
practices in similar proportions.
As regards to the importance assigned to innovative solutions, companies regard the use
of the EMAT criteria, early communication with the potential suppliers, and an emphasis on
sustainability requirements as the key innovative elements to be implemented (seen as
important by 60-70% of respondents). Additional innovative solutions emphasised by
responding companies include various eProcurement tools, meetings between procurers
and bidders at various stages of the procedure, sophisticated scoring systems, or the use
of price indices for longer-term contracts.
The views of micro, small, medium-sized or large enterprises on the importance of
individual innovative practices do not differ much. As an exception, large companies
assigned significantly greater importance to good prior market intelligence and allowing the
submission of variants. On the other hand, micro-enterprises responding to the survey
favoured sustainability requirements in public procurement, and profit-sharing
arrangements much more than larger companies.

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Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Utility of innovative solutions

(Proportion of companies seeing the given solutions important or very important, by size class)
Micro Small Medium Large Total
Use of EMAT criteria 59 76 71 68 69
In-depth communication with the market 61 66 63 64 64
Emphasis on sustainbility requirements 72 57 55 62 60
Proper prior market intelligence 52 48 49 66 57
Full life-cycle costing 54 57 52 58 56
Allowing variants 40 43 45 58 51
„Best available technology' clause 40 54 51 48 49
Leaving IPR resting with the supplier 44 46 45 47 46
Flexible functional specifications 39 50 46 40 43
Emphasis on social requirements 32 36 32 38 36
Cost savings formulae 33 27 35 35 33
Sharing profits from third-party access 53 13 19 19 21

As already well described by researchers and procurement experts, one barrier to uptake
of innovation-enabling practices is that procuring bodies do not necessarily see
innovation in public procurement as a benefit. This perception is influenced by risk-
aversion, pressures to minimise purchasing costs, previous bad experience with suppliers,
or because of the lack of political support.
Competitive dialogue, a new procedure that was introduced to European public
procurement legislation in 2004, is so far not widely used in Europe (in 2008, it was used in
only 679 cases out of more than 340,000 awarded contracts). The UK and France seem to
be the pioneers in taking it up. Competitive dialogue is normally associated with large (and
complex) projects, but some countries, including Latvia, Estonia and Ireland seem to
predominantly use it for small lots - the average contract value in Latvia was 0.1 million
euro, a mere 0.5% of the European average (26 million euro).
Pre-commercial procurement (PCP) is a relatively new approach, through which procurers
can support the development of innovative services or products in markets where no
suitable commercial solutions exist. It covers the procurement of R&D services. Public
authorities can act as key drivers for innovation through the PCP procedure, but currently,
Europe does not fully exploit its potential. Current PCP initiatives in Europe include the UK
Small Business Research Initiative (SBRI) programme, the Dutch SBIR programme, the
procurement of innovation programme in the Flemish region 2 and the UK Broadband
Content initiative. Typically, most of the projects under the European PCP initiatives are
awarded to SMEs.

2
http://www.innovatiefaanbesteden.be/

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 Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Recommendations
The statistical analysis of contracts awarded reveal that SMEs, in particular micro and
small enterprises are, on average, under-represented in public procurement above the EU-
thresholds. Therefore, the European Union and Member States alike are advised to
implement measures - and to urge procurers and other stakeholders to take steps within
their respective areas of responsibility - to create a level playing field in public procurement,
which would enable SMEs to secure a „fair share‟ of public contracts.
Also, procurers are encouraged to take up electronic public procurement which leads to
more and better information on tenders, increased competition, as well as savings in terms
of cost and time. Most of these benefits are especially valuable for SMEs.
Finally, the use of innovative practices and more elaborate procedures such as pre-
commercial procedure contributes - through its market-pull approach, and considering the
large weight of public procurement in the economy – to the exploitation and the further
increase of the innovation potential of European SMEs.
The detailed recommendations are given in the box below, under five separate headings:

Steps to dismantle barriers to SMEs

1. Simplifying tendering procedures and reducing the administrative burden. This can be
done by allowing the presentation of certain administrative documents only when the offer
was shortlisted or selected, storing company documents in „supplier profiles‟ or retrieving
them from partner authorities instead of requesting them from the bidder. The procurers
can support the tendering process by publishing templates, checklists or similar tools
helping the companies to compile their tender.
2. Further efforts should be undertaken to widen the amount of, and improve the quality of
information on public procurement available for bidders and potential bidders, using
various channels of communication (with an increasing emphasis on electronic means).
General information on the requirements of the procurer, annual procurement plans and
prior information notices on upcoming tenders, as well as notification on published tenders
are amongst the activities that help SMEs to be informed in a timely manner. Making
available guidance on the legislation procedure, or on how to prepare successful bids will
contribute to improving the quality of offers from SMEs. Communication should be done in
a simple language, comprehensible for all.
3. Strengthening the dialogue between SMEs and procurers, involving face-to-face meetings
on supplier events, interactive communication at early stages of the public procurement
process - even before the launch of the tender - to clarify requirements, and timely
responses to bidders‟ questions in the tendering phase, and Q&A sessions. Debriefing of
unsuccessful bidders is important to help them understand why they have not won and
how they can submit better offers in the future.
4. The use framework agreements by procurers – especially in centralised procurement –
more frequently, enabling SMEs to take part in the delivery of goods or services that would
otherwise be tendered in a package far too large for them to access.
5. Measures helping to overcome the limited technical and financial capacities of SMEs,
allowed by the Public Procurement Directives should be further encouraged. These include
the breaking down of tenders into lots (by task or by geographical service area), avoiding
disproportionate technical or financial requirements in the specifications, and allowing the
joint fulfilment of these requirements by consortium partners or subcontractors.
6. Procurers should pay always suppliers in time, and – if possible – reduce the contractual
payment terms voluntarily below the mandatory deadlines. Legislation should clearly set
out that suppliers are entitled to charge interest if the procurer is in delay with the payment,
and that public contracts can‟t exclude this possibility.

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Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

Steps in the area of eProcurement

7. The further promotion and adoption of eProcurement tools should be encouraged,
supported by a clear policy and legislative background, making explicit the objective of
enabling SMEs‟ access to public contracts and about the means leading there, and
achieving buy-in from public procurers through ensuring that the cost and time savings
potential is exploited.
8. The appropriate training of users both in the public sector and amongst bidders, as well as
the creation of support desks to ensure take-up and efficient use. This should come in
conjunction with efforts to ensure that the electronic tools deployed are user-friendly,
appropriate for users at all sophistication levels.
9. The use of central procurement platforms, to avoid confusion arising from several
information sources or from different electronic tendering procedures and templates. The
platform should be able to provide customised information on tender opportunities, support
the tendering process (if eSubmission is possible) through feedback and checks and
should ensure a high level of interoperability.
10. The EU should be further active in standardisation and the sharing of best practice in
eProcurement.

Steps to promote innovation in public procurement and procurement of innovation

11. On how to procure? Member States should better exploit the possibilities of public
procurement to spur innovation in Europe, through introducing certain elements that can
encourage innovation and allow innovative SMEs to develop. These include a thorough
review of new technologies available on the market, communication with potential
suppliers to specify needs and possibilities, the application of function requirements rather
than technical specifications, or allowing the submission of variants.
12. On how to procure? The take-up of Green Public Procurement should be reinforced. This
brings, apart from environmental benefits, a possible reduction in the long-term financial
costs and supports the development of the „green economy„. Procurers are encouraged to
introduce full life-cycle costing methods and explore opportunities to include environmental
requirements in their tenders. The requirements are advised to relate to the good or
service to be tendered, and not retrospectively to the procedures or organisation of the
bidder.
13. On what to procure? The introduction of pre-commercial procurement (PCP) to promote
innovation should be considered by Member States. The Commission could play a major
part in this by investigating the potential and options for PCP schemes in Europe, and to
provide advice and potentially financial support for those wishing to implement it. In that
respect, it would be also worth encouraging any US SBIR scheme types at European level.

Steps to encourage the exchange of experience

14. The Commission could reinforce its efforts to promote new findings and good practice on
how to create a level playing field for SMEs in public procurement amongst high-level
policymakers from the Member States. The agenda should link and group the results of
various EU-sponsored activities, studies, pilot projects and networks together, and include
the topics of eProcurement and innovative practices.
15. Cooperation activities and networks at expert level, under the aegis of the EU, should be
continued. New Peer Learning Activities (PLA) should be encouraged to increase the
effectiveness of information exchange between national (and regional) stakeholders.

Steps to improve the information base

16. Procurers should be required to forward contract award notices, appropriately filled in, on
all of their above-threshold tenders to the Commission (to be published on TED). The
quality of the information contained in the notices needs to be improved; especially
information on the price and the companies being awarded the tender are often missing,
incorrect or incomplete.

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 Evaluation of SMEs’ access to public procurement markets in the EU
Executive Summary

17. The introduction of an SME marker (broken down into the micro, small, or medium-sized
enterprise category) in the SIMAP contract award notices should be considered. This
would be filled in upon a simple declaration from the winner of the contract. This
mechanism already exists in some Member States and does not put any conceivable
administrative burden on the actors. The marker would allow for a sufficiently reliable, easy
and cost-efficient monitoring of SMEs‟ access to above-threshold procurement in regular
intervals.

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