Contenu connexe Similaire à Workshop 3 - Bird & Bird (20) Plus de Civic Agenda (16) Workshop 3 - Bird & Bird1. Encouraging SME
Participation in
Procurement Processes
Roger Bickerstaff
Barry Jennings
9th March 2012
2. Overview – SME Participation
● Background to the EU Procurement Rules
● Shortlisting – the legal reality
● Procurement process issues
© Bird & Bird LLP 2011
3. Background to the EU Procurement
Rules – Purpose and Objectives
● Public sector purchasing around 20% of EU GDP
● Public sector purchasing was (and is!) inherently nationalistic
• Nb Recent Cabinet Office figures:
- UK awards 3% of public procurement by value to foreign
suppliers,
- 1.9% in Germany and 1.5% in France
● Aim of the rules is to open-up EU public sector purchasing on a
pan-European basis – to establish a "level playing" field for all
EU based suppliers
● No clear objective to achieve value for money (cf the US public
procurement rules)
● Equal treatment principle should be advantageous to SME
participation in public sector projects
© Bird & Bird LLP 2011
4. Shortlisting: Assessment of Financial Standing
– Setting the Criteria
CAs can deselect bidders that do not achieve "any minimum
standards of economic and financial standing"
● CAs set the minimum standards
• No constraints in the Regulations
● EU Treaty principle of Proportionality applies
• Minimum standard must be both necessary and appropriate in
light of the objectives sought
● In practice – is this any more than a "turnover test"
• Eg. Any contract no more than 20% of annual turnover
• No legal requirement for the turnover test
• What about early stage companies?
- Foresight is needed by CAs: once a minimum standard set it
cannot easily be changed
© Bird & Bird LLP 2011
5. Shortlisting: Technical and Professional Ability
– Setting the Criteria
CAs can deselect bidders that do not achieve "any minimum
standards of technical or professional ability"
● CAs set the minimum standards
• No constraints in the Regulations
● EU Treaty principle of Proportionality applies
• Minimum standard must be both necessary and appropriate in
light of the objectives sought
● Probably more subjectivity than financial standing test
• Attempts to introduce objectivity can introduce restrictions
- E.g at least 3 projects in the last 3 years of similar scope and
complexity
• Again, once minimum standards are fixed, they are difficult to
change
© Bird & Bird LLP 2011
6. Scope of the Project – What about division into
lots?
● No prohibition in the procurement rules over division into lots
● Practical concerns:
• Award evaluation becomes potentially much more complex
- eg. General "all lots" bids vs lot specific bids
- Maximum number of lots that can be won?
• Increased contract/service management overheads
- Can CAs take into account Customer associated costs?
- VFM probably enhanced by single supplier approach
● EU Commission Green Paper:
• Better access for SMEs and start-ups - could be enhanced clarity
on how projects divided into lots can be operated
© Bird & Bird LLP 2011
7. Procurement Process Issues
● Pre-procurement communications:
• Not mentioned in the procurement rules
• No prohibition but they should not lead to favouritism or bias in
favour of a particular bidder
• Should be carried out under a structured programme
● Tender submission requirements:
• Costs of tender development is prohibitive to SMEs
• Complexities of UK approach
- PFI and PPP were very complex and expensive to
structure
- JVs and mutuals may be even more complicated!
- Other EU countries "just buy things" (quote from Bird &
Bird client)
© Bird & Bird LLP 2011
8. Procurement Process Issues (2)
● Risk allocation approach:
• Standard public sector contracts are heavy-handed and load risk on the
supplier
- OGC IT Contract, the new PSN contract places more risks on supplier
• Large suppliers can accept the risks, SMEs struggle to live with the risks
- Insurance is unlikely to be available
● Frameworks
• Do they assist SMEs or are they yet another barrier to SME participation
• Probably a "necessary evil" but
- If too many suppliers appointed to a framework there will be very
little business to justify the costs of bidding
- If too few suppliers appointed, the market place will be overly
restricted
• Ie. Setting up frameworks needs a good understanding of the market
conditions.
- It is not just a procurement exercise
© Bird & Bird LLP 2011
9. Procurement Process Issues (3)
● Lean Procurement – will it help SMEs?
• Lean provides useful simplifications to procurement processes
BUT
• When applied to Competitive Dialogue SMEs should be cautious
- CDS processes are inherently complex
● Open procurement procedures
• No short-listing – direct to tendering
• May assist SMEs
● Award evaluation processes
• Transparency obligations should assist SMEs
• Overly complex award criteria matrices deter less experienced
bidders
© Bird & Bird LLP 2011
10. Thank you
Roger Bickerstaff
Barry Jennings
Tel: +44 (0) 20 7415 6000
Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated businesses. www.twobirds.com