Insights

SME’S — Go Forth and Tender

The Department for Public Expenditure and Reform has issued new public procurement requirements to encourage small businesses to bid for public sector contracts. Circular 10/2014 replaces Circular 10/10, and is in line with the recently updated EU Public Procurement Directives (see our bulletin here) and streamline the tendering process while making it easier for small businesses to have more access to public sector contracts. The guidelines reduce the barriers that limit small companies to compete effectively in the process which in turns provide for greater competition in public procurement.

The following notable recommendations have been introduced:-

  • Category Councils have been established for 16 categories of goods and services to assist buyers in undertaking a market analysis prior to tendering.
  • Larger contracts may be divided into lots. This will facilitate SME’s in two ways:-
    • Quantitatively - the size of the lots may better correspond to the productive capacity of the SME;
    • Qualitatively - the content of the lots may correspond more closely to the specialised sector of the SME
  • Consortium bids - SME’s are being encouraged to form a consortium with other smaller businesses if they feel unqualified to tender in their own right. This is part of a package of measures designed to encourage buyers to award contracts to several small businesses rather than to one large company.
  • The Open Procedure - where a contract notice is addressed to the market at large rather than to a pre-qualified list of candidates — must be used for goods and services contracts of a value less than €134,000.
  • Capacity requirements from the buyers must be relevant and proportionate to the circumstances of the particular purpose. The requirements should not be framed in a way so as to unduly narrow a field of eligible tenderers. A tenderer should not have to supply documentary evidence of financial capacity immediately. Rather, they should declare that they meet the minimum standards. This reduces the administrative burden on tenderers. Likewise, the levels of insurance required by buyers must be proportionate and reasonable.
  • Buyers should not set the company turnover requirements at more than twice the estimated contract value for routine work. This can be exempted where a higher value can be justified.
  • Buyers may specify the need for innovative products or work where they are prepared to accept variants to the specifications. This allows tenderers to have the freedom to develop goods and services and stimulates innovation.
  • All contract awards notices worth over €25,000 must be published on the eTenders website from 1 August 2014. This website has been developed to have user friendly features making the tendering process quicker and easier. These features include:-
    • allowing tenderers to register their interest to receive email alerts fortenders relating to their specific tenders;
    • a facility for uploading business details which remain saved on the site;
    • providing for the online submission of tenders.
  • Contracts may be awarded either on the basis of lower price of on the basis of the most economically advantageous tender based on the whole life-cycle costs.
  • The revised EU Procurement Directives and Circular 10/2014 should enhance access to public sector contracts as well as delivering increased flexibility in procurement exercises by the public sector. The Circular recognises the importance and value that SMEs can provide to the public sector and promotes transparency for public sector contracts.

If you have any queries on any issues raised in this article please contact Deirdre Ní Fhloinn at deirdrenifhloinn@reddycharlton.ie


Keywords: Publication, News, Commercial Law, Deirdre Ní­ Fhloinn

< Back to Insights