The European Parliament has approved new legislation to make it easier for UK small firms to tender for public sector work across the continent.
A new package of EU procurement directives is hoped to make it faster and, more importantly, cheaper for SMEs to bid for public contracts. The European Commission estimates the new legislation will slash the cost of bidding for public contracts by almost two-thirds (60 per cent).
Under the current system, UK SMEs bidding for public sector contracts have to provide extensive supporting evidence in their application. However, the new directive will change the system so that businesses only need to support their application once a tender is successful.
Francis Maude, Cabinet Office Minister, said: "We have reduced the red tape and streamlined the processes, taking out a lot of the bureaucratic noise. A lot of the unnecessary work will be eradicated."
In order to be eligible to bid for public contracts across the EU, companies need to submit three years of audited accounts. However, under the new system, start-ups will also be able to tender for contracts providing their annual revenue is twice the overall value of the deal.
An additional ‘win’ for Government is that, under the new directives, they will be able to exclude suppliers on the grounds of poor past performance. Previously, companies could only be excluded from bidding for public contracts on the grounds of grave misconduct.
"This is a much more sensible, commercial approach, which brings the public sector more in line with the private sector," added Maude.
The new directives must be adopted by all EU member states within two years, although the UK is planning to roll out the changes by the end of this year.
Image: Yanni Koutsomitis
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