How new public sector procurement rules could help small businesses

9 November 2009

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The public sector tendering process has long been a bone of contention for small firms. Often it is seen as too much of a closed shop and too dominated by big business. But the tendering process, which is worth £150bn, is to change before the 17th December, due to a European Directive.

This could be good news for small firms needing to crack the public procurement process to win much needed business.

Essentially the new Remedies Directive will give unsuccessful tenderers more opportunities to challenge decisions. By encouraging more challenges to tender awards, the EU wants to make the procurement process fairer, more open and transparent.

Under the current system, firms which feel the process has been unfair can challenge the decision but the process is very complicated and the remedies are limited.

Public sector organisations are already legally obliged to observe certain principles when spending their funds and appointing contractors. However, as result of the imminent legal changes and a spate of recent cases, what may have been a compliant procurement process 18 months ago is now not necessarily so bullet-proof. This spells big changes for the procurement process.

How can you make the most of this to win business?

The fundamental rule is to understand what is expected of you up front in order to best formulate your bid.

Talk to the organisation offering the tender make sure you fully understand the criteria. Then if you fail to win think about challenging the award. If you are successful you can have the contract annulled and the procurement process restarted, or become a supplier yourself and/or receive damages.

How do you spot a 'dodgy' award?

Did you think "I wish we'd have known that earlier" at the debrief? A debrief is what the public body is obliged to give the unsuccessful tenderers. It is feedback on the good/bad points of their tender and may also reference the successful bid.
In a two stage process, have they used the same criteria more than once? This is against the law after a relatively recent change.
Have they told you all the criteria and all their weightings?
Did they award the contract straight away?
What about the award – are existing frameworks being extended?
Has there been a change in the contract since the initial advertisement?

Ultimately the procurement process is becoming much more legally tricky for tendering authorities.

Small firms will be able to challenge the process much more easily. But this could also present a threat to small firms which are established suppliers of public sector bodies which risk losing important contracts.

If you are unsure about the process it is wise to seek legal advice to ensure your tender is as legally robust as possible. And, if you want to challenge an award, it is wise to seek advice too, to ensure your case stands the best chance of success.

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About the author

Martin Vincent is Head of Education and Procurement at North West-based Mace & Jones law firm. For more information visit www.maceandjones.co.uk or email martin.vincent@maceandjones.co.uk.

Note: You can access information on available contracts online from a range of providers, including the Government's website, supply2.gov.uk, and TendersDirect.co.uk.

The FPB is campaigning for the Government to make public sector contracts more accessible for small and medium-sized firms. If you've had problems in the past and have not already been in touch then we'd like to hear from you. Email us at campaigns@fpb.org.

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