Mutuals and SMEs remain at risk of EU procurement rules despite government calls for change

By David Bicknell

A recent article on EU procurement has raised the possibility of the risk of a challenge to the government’s plans to make procurement easier for fledgling mutuals and social enterprises still trying to get their feet off the ground.

There are also implications for SMEs battling to gain a foothold in government procurement.

The piece  argues that even though the govenment is trying to change EU procurement laws, that itself is likely to take a couple of years. So, it asks, if the UK government is making a proposal around mutuals now, what will it do regarding procurement in the meantime?

In the UK government’s recent formal response to the European Commission Green paper on the modernisation of EU public procurement policy, the government said:

The UK welcomes the Green Paper on modernising public procurement, and the commitment that proposals to simplify the public procurement directives will be published at the end of 2011 or early 2012. The UK strongly agrees with the Commission’s comment on the need for streamlined and flexible procurement procedures, so that purchasers can obtain high quality goods and services, while delivering value for money for the public purse. Radical simplification is needed for the benefit of small and medium-sized enterprises (SMEs), other suppliers and public purchasers alike.

The main priorities in the revision of EU public procurement policy should be:

To make clear that contracts could be awarded directly for a period of, for instance, three years, to employee led organisations/mutuals, to enable employees to gain experience of running public services prior to full and open competition

Reducing lengthy and burdensome procurement processes that add cost to business and barriers to market competition

Providing more flexibility for purchasers to follow best commercial practice, so that the best possible procurement outcomes can be achieved, and

Supporting measures to enhance SME access to public procurement, where such measures are non-discriminatory and are consistent with a value for money approach.

The full response is available here

The article goes on to suggest that changes should be made to simplify and harmonise ‘dynamic purchasing’ techniques such as framework purchasing agreements, which need to be made more flexible to benefit SMEs.

3 responses to “Mutuals and SMEs remain at risk of EU procurement rules despite government calls for change

  1. Pingback: Screw the EU when it comes to mutuals | Platform 10

  2. Last post should be driving prices down and not process


  3. All well and good, having read the full document I am glad to see the section which sates

    agree that excessively strict turnover requirements for proving financial capacity are problematic for SMEs, but would be concerned that if a maximum ratio for turnover to contract value were to be set, that buyers would default to the maximum even if it was not actually proportionate (question 51). As a result, we would not want to see this included in legislation. UK businesses have complained that disproportionate turnover requirements in relation to contract value have meant that they are unable to proceed past the PQQ stage. This practice creates a barrier to potential new suppliers and can block innovation

    This recognises the main barrier to SME getting involved and, by so doing, driving process down and value for money and innovation up. There is still however on problem which has not been addressed and is, I believe, the elephant in the room. This is namely that a procurement is entered into under these rules with a budget in mind i.e. 103,000 Euros or above. I read that a UK Trust was looking to / has already awarded a £14,000.000 telecoms contract. The figure was suggested by the Trust. This entire process puts the cart before the horse, suppliers of almost every other type of product / service have a publicly visible list price. Should we not be stating, from the customers perspective, I want A,B and C how much will it cost me? Rather than I want A,B and C and I think its going to cost at least X who can do it for that or less. The bar is now set at X whether it needs to be or not. Clearly not the best way to get value for money nor engender competition or innovation


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