New EU procurement rules aim to encourage small IT suppliers

The European Parliament has agreed a new set of rules for public procurement that promise to make it easier for smaller firms to win government contracts

The European Parliament has agreed a new set of rules for public procurement that promise to make it easier for smaller firms to win government contracts.

The new EU Procurement Directives are a response to widespread criticism that bidding to win public sector contracts was expensive, time-consuming and favoured large companies with the resources to respond to complex procurement requests. This has been a regular complaint from smaller IT suppliers in particular.  

The directives must be adopted by EU member states within two years, but the UK government is aiming to introduce the rules into law much sooner.

Cabinet Office minister Francis Maude has led UK lobbying on the new directive, and claimed the rules include “several wins for UK government.”

“We will seek to transpose these rules into UK law quickly as the regulations will help British companies win business in other European countries,” he said.

Sally Collier, managing director of the Crown Commercial Service – the central procurement authority for the UK government – told delegates at the government ICT conference in London yesterday that Maude wanted to introduce the necessary legislation in just six months.

She said that after pointing out the challenges of meeting such a deadline, she managed to convince him to give her seven months instead.

Encouraging small and medium enterprises (SMEs) to bid for contracts was one of the key aims of the directive, according to the European Parliament.

“Further facilitating the access of SMEs to public procurement was precisely one of the objectives of the revision of the rules,” said an FAQ on the changes.

The changes mean that contracts will be broken down into smaller lots, and firms will be able to bid as long as their annual revenue is twice the value of the deal – previously, these revenue thresholds were set much higher.

The amount of red tape involved in bidding will be reduced, and it will be easier to exclude suppliers for poor past performance – previous rules meant it was difficult for the government to consider badly delivered IT contracts as a reason for not subsequently selecting a supplier for future projects.

The UK government has set a target of putting 25% of spending through SMEs by 2015 – with IT contracts given a higher target of 50%.

Read more on IT for small and medium-sized enterprises (SME)

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