“But I know I can………”
We are actively told to encourage SME participation in EU Procurement. To be honest, SME participation shouldn’t just be limited to something advertised in the Journal – it should be encouraged wherever possible. But that gets me to thinking about what “wherever possible” really means. What if:-
- Someone really believes they can deliver a contract well above their turnover
- An applicant believes that if you awarded the contract to them, it would let them expand in line with their business plans
- They tick all the other pre-qual boxes that would allow later participation (i.e they are highly technically competent)
These are not unusual statements! What is unusual however is the strange notion that Contracting Authorities should be able to ‘foresee the future’ and whip out their crystal balls before bypassing internal requirements for financial stability checks and just say “yes, you’re absolutely right Mr SME, have the contract – we are even going to stick a lottery ticket on this week”
Contracting Authorities should be able to ‘foresee the future’ and whip out their crystal balls before bypassing internal requirements for financial stability checks and just say “yes, you’re absolutely right Mr SME, have the contract – we are even going to stick a lottery ticket on this week”
Ok, so rather flippant and a little childish really. As an SME, we understand only too well the frustrations that growing businesses feel when they believe that the world of buying has lost the ability to trade on relationships and has gone to a process driven ‘checklist’.
So, what have the new Directives got in store for Contracting Authorities in trying to further engage SME’s? Do they go any further than current examples of good practice?
Here are the nuts and bolts:-
- Removal of “Overly demanding requirements concerning economic and financial capacity”. Any such requirements should be related and proportionate to the subject-matter of the contract.
- Contracting Authorities should not be allowed to require a minimum turnover that would be disproportionate to the subject-matter of the contract; the requirement should normally not exceed at the most twice the estimated contract value.
- High risk situations should allow the ability to apply higher requirements – surely that is common sense?
- If it is decided that a ‘minimum turnover’ needs to be applied following risk analysis, then the procurement strategy should set out why
- Financial Ratio analysis is welcomed as a method of demonstrating stability
Again, much common sense application would see that not much is changing for our current clients as we have been making this type of recommendation for a long time. After all, turnover really doesn’t tell us anything about the overall success of a company – isn’t Profitability King?
Finance, is however, just one element of trying to engage SMEs further in Public Procurement exercises. The next critical element discussed in the Directives that will require much thought is limiting the need for extraneous paperwork. The suggestion is that there would be production of a European Single Procurement Document (ESPD) consisting of an updated self-declaration which would negate the need for constantly providing certification and other evidential documents prior to contract award. Definitely too much material to cover today…..thoughts on how ESPD could work in practice next week!