Public Sector Tendering

Recent changes in European Legislation and Directives have been a welcomed addition to the world of Public Sector Procurement, particularly for SMES across the Island of Ireland. The development of E-Tendering Portals – E-TendersNI in Northern Ireland and E-TendersIE in the ROI has created an online platform which enables SMEs to source and respond to public sector tendering opportunities.

Tendering in the Public Sector has become a more inviting and engaging place to do business. Revised Directives and a willingness to be more open and transparent has enabled SMEs to access relevant and lucrative above threshold opportunities. Benefits of the new Directives include:

Pre-market engagement between contracting authorities and suppliers is encouraged. It is envisaged that this will allow for better specification documents to be developed, better outcomes to be achieved and shorter procurement times introduced.

A new procedure, the ‘Innovation Partnership’ procedure, has been introduced. This is intended to allow scope for more innovative ideas. Buyers are now able to learn from suppliers to gain an understanding of market developments and consequently introduce innovation into the public- sector market – improving efficiency and in some cases reducing costs. This is an important development for businesses who have new and innovative products and services that they would like to bring to market.

Contracting authorities are encouraged to break contracts into smaller lots to facilitate SME participation. This opens up the public sector more to the SME market. Businesses which felt they were too small to service public sector contracts are now in a position to compete. A turnover cap has been introduced to facilitate SME participation.

Contracting authorities will not be able to set company turnover requirements at more than two times the contract value except where there is specific justification. The turnover requirements for some public – sector contracts have been a barrier for SMEs wishing to compete. This change can now allow SMEs to tender more freely, for public sector contracts.

Poor performance under previous contracts is explicitly permitted as grounds for exclusion.

A common problem in public sector procurement is the awarding of the lowest costing bid despite previous underperformance.   This new regulation means that contracting authorities do not have to award to the lowest bidder if they have previous underperformance. This is good news for suppliers who consistently provide high quality products/service but are not necessarily the cheapest.

The full life-cycle costing can be taken into account when awarding contracts; this could encourage more sustainable and/or better value procurements which might save money over the longer term despite appearing to seem more expensive. This provides SMEs with the opportunity to win public sector contracts based on quality not just on costs.

So what are you waiting for – if you have thought about public – sector tendering, the time to take action is NOW!

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