The New EU Public Procurement Directives A Boost For SMEs

The purpose of the EU Procurement Directives is to provide transparency, fair and competitive procurement process across its Member States. However, these rules are not favourable to all, least of all, the SMEs due to the restrictions and bottleneck they have created in participating for public contracts.

The new EU Procurement Directives will support public sector mutuals and boost small and medium enterprises according to the Crown Commercial Service

The new rules which took effect in April 2014, have similar structures to the old rules. Some of the old rules have been relaxed due to the UK government’s push to reform the EU, making it more competitive, cutting EU red tape and so UK companies can benefit more from the single market.

The 2014 EU Procurement Directives have been adopted by the EU institutions and were published in the Official Journal of the EU on 28 March 2014. They came into force on 17 April 2014. EU member states now have 2 years to implement them in national legislation. – UK Cabinet Office.

How This Is Boosting The Small Medium Enterprise (SMEs):

The UK government is hoping to spend 25% of its spend with the SMEs by 2015. In order to achieve this, among other things,

1. The new regulations will encourage buyers to break large contracts into smaller lots where applicable. This is to facilitate SME participation in parts of a public contract rather than the entire contract.

2. The turnover requirements for businesses competing for contracts are to be capped thereby restricting the buyer from requesting a higher sum when requesting for this at the pre-qualification (PQQ) level.

3. The distinction between Part A and Part B services has been removed, and a new light-touch regime introduced for social, health and some other services. There will be OJEU advertising though, but with higher threshold.

4. A much simpler process of assessing bidders credentials is being introduced so that the supplier can now ‘self-declare’ and will only need to submit the various certificates and other documents if they win the bid. This new rule (reduced red tape) will see procurement processes being much simpler and more streamlined, ultimately making life easier for all concerned.

5. The full life-cycle of costings will be taken into account even if the initial cost was high. By adopting the most economically advantageous tender (MEAT), means this could encourage a more sustainable and better value procurement in the long term. This means there will be no contract awards for a lowest price if the lowest price last for a short term only during the duration of the contract.

6. Electronic communication or e-procurement will become mandatory for all Member States by 2018. This means that all contracting authorities will be required to make all procurement documents available online from the date of contract notice free of charge.

7. Also, there is more freedom to negotiate by relaxing the constraints on using the negotiated procedure.

These new changes to regulations will support further reform by making the public procurement process simpler, faster, less costly and more effective for business and procurers alike. Influencing the changes has been a priority for the UK government.

What Happens Next?

Member States are required to implement these new rules within 2 years from the date of EU adoption.

Cabinet Office is preparing ambitious plans for early transposition, so that the UK can take advantage of the additional flexibilities in the new rules as soon as possible. These rules would only bite on new procurement exercises commenced after the date when the new UK rules take effect.

Will the new EU Procurement Directives be effective and favourable for all? I doubt it will be favourable for all, because one man’s loss is another man’s gain. But the UK SMEs will benefit largely from the new rules when implemented as the idea was initiated by the UK government to favour the UK small medium enterprises.

How do you think the new rules will benefit your business or organisation?

If you need more information on this article or in procurement process and strategy, please contact me.

 

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