Sustainability, Public Procurement and SMEs - Challenges and opportunities

Research output: Contribution to conferencePaperResearchpeer-review

The global value of public procurement spending is enormous. Each year, approximately 19% of the EU GDP is spent by over 250,000 public authorities purchasing services, works and supplies. The sheer scale of public procurement spending and supplier selection decisions can literally create and shape the market, impacting the lives of citizens across countries and regions at large. Over the last decade public procurement experienced wide spread modernization across the globe, both including local and international levels. These days, public procurement is no longer just about buying the cheapest possible supplies or services but, rather, it is understood as a process whereby organizations meet their needs in a way that achieves value for money on a lifetime basis and delivers aspects beyond savings. This includes doing business responsibly, taking a leadership position in the community and ensuring promotion of Small and Medium Enterprises (SMEs) in public procurement.
SMEs are considered the backbone of the European economy as they represent around 99,8 percent of all enterprises and produce more than a half of the European GDP. Thus, if more SMEs participate in public procurement, the competition will increase and, consequently, governments will be able to achieve better value for money in their contracts. Also, it has been argued that most innovations originated from small entrepreneurial firms which support the sustainability agenda.
The main claim of this article is that sustainability and the promotion of SMEs participation in public procurement do not necessarily contradict each other. It is without doubt that SMEs participation in the procurement context encompasses a number of challenges. To the latter may be accounted the argument that SMEs are too small, have too little money, experience or technical capabilities to participate in public procurement. Yet, it is argued that revised procurement law has the potential to solve some of the challenges and there is still considerable scope for promoting opportunities for SMEs such as reliance on the capabilities of third parties, bidding in form of consortia or subcontracting, the possibility to influence contract specification, and reserved contracts.
Original languageEnglish
Publication dateApr 2017
Number of pages16
Publication statusPublished - Apr 2017
Event5th International OFEL Conference : on Governance Management and Entrepreneurship -
Duration: 7 Apr 20178 Apr 2017

Conference

Conference5th International OFEL Conference
Period07/04/201708/04/2017

ID: 178887024