Policy Ensures Level Playing Field for Supplies of All Sizes; the Law Is on the Side of Small Businesses When It Comes to Procurement, Explains Rhodri Williams QC
A RECENT letter to the Western Mail highlighted the legitimate concerns of small and medium sized enterprises (SMEs) attempting to bid for valuable contracts awarded by central and regional government, both in Wales and beyond.
Despite the concerns outlined in the letter, all is not lost for SMEs who wish to tender, for many of the practices complained of are in fact unlawful as a matter of European law.
Indeed both the European Commission, United Kingdom government and the National Assembly for Wales have policies expressly aimed at making tendering for SMEs easier and at outlawing the processes which are seen as discriminating against them.
The crux of the complaint made was that in attempting to get transparency, value for money and quality of service, the procurement procedure inherently favours larger companies. However, practices which are discriminatory, non-transparent and, particularly important for present purposes, those which are disproportionate are in breach of European law and may be challenged.
In 2008 the European Commission, which is responsible for ensuring compliance with EU law in the various member states, published its European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts. This expressly deals with the main difficulties encountered by SMEs, namely overcoming difficulties relating to the size of contracts, ensuring access to relevant information, improving the quality and understanding of information provided, setting proportionate qualification levels and financial requirements, alleviating the administrative burden, placing emphasis on value for money rather than on price, giving sufficient time to draw up tenders and ensuring that payments are made on time.
The solutions proposed expressly dealt with such things as subdividing contracts into lots, taking advantage of the possibility for economic operators to group together and rely on combined economic and financial standing and technical ability, keeping selection criteria proportionate and requiring only proportionate financial guarantees.
In the United Kingdom, the Office of Government Commerce has recently issued further guidance on measures to promote small business procurement.
This includes such steps as the introduction of a new Crown Commercial Representative to build more strategic dialogue between government and smaller suppliers, the launch of 'SME Product Surgeries', PQQ systems for all procurement in common commodities allowing suppliers to provide their pre-qualification date just once, for all central government procurements under approximately pounds 100,000 to seek to eliminate PQQs entirely and for larger procurements greater use of the open procedure, thus eliminating a separate selection stage in the procurement. …