Your SlideShare is downloading. ×
  • Like
Workshop 3 - Bird & Bird
Upcoming SlideShare
Loading in...5

Thanks for flagging this SlideShare!

Oops! An error has occurred.


Now you can save presentations on your phone or tablet

Available for both IPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Workshop 3 - Bird & Bird



Published in Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads


Total Views
On SlideShare
From Embeds
Number of Embeds



Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide


  • 1. Encouraging SME Participation inProcurement 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 ProcurementRules – 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 CriteriaCAs 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 intolots?● 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 6000Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated businesses.