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Opinion: SMEs could benefit from new EU procurement regulations

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Opinion: SMEs could benefit from new EU procurement regulations

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Published by Max Salsbury for 24dash.com in Housing

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Image: Housing via Shutterstock

By John Skivington, director, LHC

Recognition of the role of the SME in construction refurbishment is becoming increasingly important, and there’s no doubt that many smaller businesses are thriving in the current climate. But getting micro, small and medium-sized enterprises involved in the procurement process can be a difficult task.

Although SMEs can provide public bodies with innovative solutions for projects at competitive costs just as effectively as the larger players, many of them decide not to get involved. They perceive the procurement process as being difficult to navigate, and believe that contracts will inevitably be awarded to larger companies.

To encourage more SMEs to access public sector procurement, it’s vitally important that the process is made more accessible to them.

The new, recently approved EU Procurement Directive will, hopefully, pave the way for smaller businesses to grow their client footprint in the public domain. By adopting the EU Directive into national legislation, the UK government is proposing to level the playing field for companies of all sizes getting involved in public procurement contracts.

At LHC, we have taken steps to encourage micro, small and medium-sized enterprises to get involved in the procurement process – particularly in housing refurbishment projects. We have broken down the framework scope into smaller geographic and workstream lots and we are also working on simplification of the tendering process without compromising the regulations.

Being involved in housing projects where results have a tangible and lasting effect on communities can help smaller companies build up their profile and secure further work.

But there are a lot of larger contractors that are already out there, and have been used by public sector organisations for many years. It’s vital that smaller companies have the confidence to stand up and be counted alongside much larger organisations, particularly with many social housing providers preferring local solutions.

The new EU Directive and UK regulations will also place greater emphasis on wider aspects of the procurement process. Public authorities will be encouraged to award contracts not only on the cheapest price, but to consider economically advantageous issues, such as local environmental and social impact of the products, works and services being provided. This change in the selection process should be warmly welcomed.

The new directives will also work to protect workers, and there will be tougher provisions to reject bids that are ‘abnormally low’ due to failure to adhere to EU directives that protect workers’ rights and incomes.

A leaner and more transparent procurement process will certainly encourage more SMEs to be proactive in identifying and becoming involved in new business opportunities in the public sector.

I also believe that SME success in procurement projects could help promote greater competition in the process and demonstrate how well smaller companies can work to deliver on major contracts.

Above all, it’s important that EU rules and directives provide the client with the best possible product and the best value for money. Frameworks that are conducive to SME success will significantly help that process.

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