17 January 2014

Simpler rules for tendering in the EU

Changes are set to make it easier for small businesses to bid for public sector contracts across the European Union (EU).

Changes are set to make it easier for small businesses to bid for public sector contracts across the European Union (EU).

If you are looking to increase your work with the public sector in the UK and other European countries, you may well welcome the new rules which will make the process of tendering simpler. The European Commission estimates that the revised package of EU procurement directives will mean it costs 60% less for SMEs to bid for public contracts within the union.

Cabinet Office Minister Francis Maude says: “We have reduced the red tape and streamlined the processes, taking out a lot of the bureaucratic nonsense. A lot of the unnecessary work will be eradicated.”

At the moment, if a small business wants to be in with a chance of winning a public sector contract, they have to supply a large amount of supporting evidence when they apply. The expense and work involved means many smaller firms are discouraged from even trying.

Under the new rules, this paperwork will only need to be supplied if a business has won the contract.

Another change is that businesses will no longer need to submit three years of audited accounts to be eligible to bid.

Mr Maude says: “Some of the most innovative young companies have been excluded from the process.” said Mr Maude.

Process opened up to start-ups

Once the new directives are implemented, start-ups will also be able to tender for contracts, increasing the number of potential bidders. The only stipulation is that the annual revenue of the start-up must be at least double the value of the deal.

As well as cutting some of the red tape, there are also moves to make it easier for organisations to spin out of government and become a mutual. At the moment there are 80 mutuals but the Government wants this number to rise to 100.

Mr Maude says: “You get a massive productivity improvement when you create mutuals. Mutuals are currently delivering over £1bn worth of government services. And every mutual is a new enterprise in the marketplace delivering growth and employment."

If a business has a record of poor performance, they will be able to be excluded from bidding for public sector contracts. This is a change from before when firms could only be stopped from tendering on the grounds of grave misconduct.

Mr Maude wants to bring in the changes across the EU by the end of this year but the member states must adopt the directives by January 2016.