maandag 9 januari 2012

SME in the Deep-freeze: Small and Medium sized Enterprises left out in the Cold


Every government has the obligation to take care spending public funds. For that reason regional, national and even international rules have been set in place. You're not allowed to exclude providers or suppliers nor to promote them without good cause. You are supposed not to gain from an assignment or order (read bribery). Unfair competitive advantages (specific product or brand requests) nor between company agreements (cartel) are allowed. The procurement must be transparent and all information must be publicly available. And anyone selected for providing the goods or services must be a respectful and trusted supplier. And, we're economic: spending should be minimal.


What to do, being a civil servant? You start searching for certainty and escape routes. Certainties you can build in by pre-selection: set up a scope of demands the provider or supplier has to comply with. Mark: in future! Look for turnover, number of employees, number of comparable assignments, price per unit, guarantees on competences and deployment, partaking on future requests. Most of business (90%?) is excluded beforehand because they cannot comply, ever. From the 10% that remain you select the top-10 (1%) or less which are allowed to compete and deliver, year in year out and with exclusion of all others for years to come. This is called a Master Agreement by which governments pre-select possible suppliers.

What about exclusion of suppliers, no gain from an order, no unfair competitive advantages or cartel agreements, transparency, respectful and trusted suppliers? And caring about spending? All small and medium-sized enterprises (SMEs) are excluded in advance by the defining demands. New entrants on the market or new and cheaper suppliers do not count. There is no real competition and selected companies can set orders and pricing between themselves or share orders by combined offerings, closing their market share even further. Parties must act on procurement requests and will offer for too high a price, but they are committed to making an offer, just because they have too many projects running already. For the outsider it looks like fair competition where there is none.

Escape routes are built in by requesting, in the technical or functional descriptions, the specifications of named brand products or suppliers. If that seems too obvious to the keen observer in the market or media, you ask for supplier- or brand-specific interoperability. A well-known hoax has been the procurement of a new, government-wide desktop solution. Here every supplier could deliver on the condition that it provided interoperability with a named brand and product. So, anyone can offer a car as long as it's BMW (or any other brand with similar characteristics). And all calls for openness, clarity and transparency on the policy involved is frustrated by all means to cover any tracks.

How do we provide that small and medium-sized enterprises, the biggest employer in Western Europe, can simply do business with and for government? One example: almost all requests for the delivery of software go to US-based multinational companies, with one or two European exceptions. Aren't we capable of developing software? Aren't we?

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