Sunday, October 10, 2010

New Procurement Guidlines for SME's Now Available

AT LAST SOME GUIDANCE NOTES ON THIS - AS FOLLOWS: Further Relevant links will be uploaded at a later stage.


The small and medium enterprise (SME) sector is significant to the economy and public procurement can be a valuable source of business for SMEs. It is particularly important that small and medium sized businesses are not hindered in competing for contracts that they could perform effectively. In this context guidance[1] is now issuing which aims to have contracting authorities structure and run their competitive processes for public contracts in a manner that facilitates increased participation by SMEs, while they continue to ensure that all public sector purchasing is carried out in a manner that is legal, transparent, and secures optimal value for money for the taxpayer. The guidance is not designed to favour the SME sector over other sectors but rather to provide SMEs with a level playing field in competing for public contracts. This is in line with EU policy on increased SME participation in public procurement.[2]

Under the Capital Works Management Framework, there is a maximum of sixteen main criteria to be assessed in determining the suitability of a contractor for the award of a public works contract. In addition, there are up to seven sub-criteria for each of the four different roles relating to health and safety that a contractor may have to fulfil on a project. The criteria chosen for each project should be picked from the menu of the above referenced criteria and sub-criteria. In order to reduce bureaucracy and simplify the tendering process, applicants are no longer to be asked to supply detailed evidence of capacity (e.g. bank references, audit accounts, company turnover, company balance sheets, professional indemnity insurance etc.) at suitability stage (open or restricted). Instead they are to self-certify[3], provide third party certification certificates3 and use self-declaration certificates3 to confirm compliance with minimum standards for the relevant criteria in the suitability questionnaire. The only evidence that may be requested for qualitative assessment is that indicated in the table below. The details that the certificates/ declarations cover can be verified at tender evaluation stage (open) or after short-listing[4] (in a restricted procedure). The key consideration in relation to suitability criteria, particularly turnover, is that the level chosen should be justified and proportionate to the needs of the contract.
[1] Department of Finance Circular 10/10, together with “Guidance for Public Contracting Authorities: Facilitating the Participation of SMEs in Public Procurement”, and this Guidance Note The first two of these documents are available on document 26.

[2] “European Code of best practices facilitating access by SMEs to public procurement contracts”, Brussels: 2008. Available on-line at:

[3] As indicated in this document.

[4] Contracting authorities should consider increasing the number of candidates that they short-list to safeguard against a number subsequently not being able meet the commitment made in the declarations when checked resulting in those candidates being dropped from the competition before tenders are invited.


The use of “restricted” tendering procedures, which require potential tenderers to show that they meet certain requirements (viz. pre-qualification) before they are invited to submit tenders, is often cited as a barrier to SME participation, especially if contracting authorities set unnecessarily high capacity levels. In order to address such concerns about pre-qualification criteria, the restricted procedure for tendering competitions should no longer be used for advertised contracts for works and related services with an estimated value up to €250,000. This means that the open procedure of competitive tendering will be the norm for advertised contracts up to this level.

Note: The revised arrangements in this document are effective from 13 August 2010

In order to facilitate self certification, third party certification and the use of declaration certificates, the blue areas below (refer to DOF website for tables) indicates where these can be provided. The areas in green show where information in relation to scale and complexity can be requested at a later date. For the green areas, contracting authorities should consider selecting, as the norm, the ’Submit on Request’ option on the Suitability Questionnaire. Furthermore, in order to address concerns about overly restrictive pre-qualification procedures, there is now a requirement to advertise contracts in an open procedure for works up to €250,000[1] (excluding design-and-build contracts – where an independent design consultant is engaged).