Brussels opens the door of public procurement to SMEs

BarcelonaThe European Commission has drafted a regulation, the Public Procurement Act, which seeks to facilitate SMEs' access to public procurement and avoid the difficulties they currently face in participating in these tenders. Public procurement represents approximately a total of 2.6 trillion euros annually, nearly 15% of the European Union's (EU) gross domestic product (GDP). Pimec applauds the initiative which –it ensures– incorporates the measures it has defended during the consultation process and in the definition of European proposals through the business association SMEunited, of which it is a member.

The proposal, in the context of boosting European companies, suggests replacing the three current directives with a single European regulation, simplifying procedures and reducing administrative burdens, all of which are elements that, until now, have been obstacles for SMEs. For the business association Pimec, this decision will allow for limiting differences between member states, preventing them from adding requirements that others do not have and administrative burdens not foreseen by European regulations, and also offering more legal certainty to companies participating in public tenders.

“Europe has listened to SMEs and has incorporated many of the measures we have defended over the last few years. It is an important step so that public procurement ceases to be a market designed mainly for large companies and becomes a true lever for growth, innovation, and competitiveness for SMEs,” stated Antoni Cañete, president of Pimec.

Adaptation to company size

Among the main advances, the push for dividing large contracts into lots stands out, one of Pimec's historical demands. This measure allows tenders to be adapted to the size and specialization of SMEs, which represent the bulk of the European business world, and prevents large contracts from leaving them out of projects they have the capacity to execute.

The proposal also makes it easier for various SMEs to group together and submit joint bids for a tender. Likewise, it provides for a single digital window to access European public tenders.

The Catalan association of SMEs particularly values "the paradigm shift in award criteria", where criteria related to quality will gain weight. In this line, the best quality-price ratio "will become the general criterion and quality will have to represent, at a minimum, 30% of the valuation, a percentage that will rise to 50% in labor-intensive contracts". According to the entity, "this change will allow for better recognition of the specialization, innovation, sustainability, and added value of SMEs, which were often penalized in procedures excessively focused on the lowest price".

In February of last year, the Catalan government, through the Department of Economy and Finance, already promoted measures to facilitate the access of SMEs to public procurement. Pimec claims to be the promoter of these reforms which included the division of contracts into lots, along with the simplification of procedures and direct payment to subcontractors. The Catalan business organization values that this approach, which has already begun to be applied in Catalonia, "is now also consolidated in the future European public procurement framework".

The Brussels proposal also incorporates a European framework of preference and reciprocity, which will allow the use of public procurement "to strengthen the European production base and avoid situations of unequal competition with operators from third countries that do not offer equivalent conditions of access to their markets". The door is also opened to advance payments, which can reduce pre-financing needs and improve the cash flow of SMEs during the execution of contracts, among other measures.