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SME-participation in public procurement

27. maj 2013

This report examines to what extent small and medium sized enterprises (SMEs) participate when the Danish public sector contracts out publicly provided services. In addition to this, the report looks into what barriers that limits SME participation and what kind of initiatives that can reduce such barriers.

Danish public authorities purchase goods and services for about 290 billion DKK a year in the private sector. This makes the public sector a major buyer of goods and services from Danish companies. But, small and medium sized enterprises experience challenges when they participate in public procurement. One of the reasons is that the procurement process demands considerable resources, which accounts for a significant amount of smaller companies’ total capacity.

Since smaller companies make up a large part of the Danish market it is important that they participate and make bids when the public sector contracts out. In that way, most competencies comes into play and contracts are solved as efficiently as possible relative to price and quality.

Three barriers have been identified in this report: Resource demanding procurement processes, complex and inflexible procurements with unnecessarily high requirements and the need for more knowledge

The Competition and Consumer Authority has through dialogue with stakeholders in the area identified seven initiatives, which it would be beneficial to carry out in order to diminish the outlined barriers and promote SME participation in the competition for publicly provided services. The recommendations are aimed at increasing public procurer focus on SMEs, and at helping companies to become better in the competition for public services that are contracted out.

The recommendations draw on positive experiences from England with regards to furthering of SME participation in the competition for public services. Based on the English experiences the recommendations focus on e-procurement, increased dialog between business and public and, on implementing market knowledge to the public authority. 

Download summary and main conclusions of the report "SME-participation ind public procurement"