Small and Medium-Size Enterprises in the Public Procurement Market in Poland and in Europe

The public procurement market in the EU is estimated to be worth around one-sixth of total GDP in the EU. This represents a huge market, and one from which Europe's SMEs ought to be deriving a significant share. Public procurement covers a wide range of supplies, services and works required by governments, local authorities and public organisations, utilities and agencies. Although SMEs are not specifically excluded, the procedures and practices used in many tenders have the effect of disadvantaging SMEs over larger competitors. The size of contracts varies hugely, and so whilst some are clearly beyond the capabilities of SMEs to fulfil, a significant proportion of the public procurement opportunities in Europe are well within the scope of SMEs. For this reason the 2004 EU Directives reforming the public procurement rules provide a good basis to facilitate SMEs' access to public contracts.

The SMEs' access to public procurement varies from one Member States to another. However, overall SMEs secure 42% of the value and 64% of the number of contracts above the thresholds fixed by the EU directives on public procurement. (2005 data) The directives cover roughly 16% of the EU public procurement market. It is interesting to note that medium sized companies are performing much better that small and micro companies.

But even when these figures might look encouraging, there are still many barriers which discourage SMEs from responding to tenders or even lead them to avoid such opportunities altogether. In this paper we will concentrate on characteristics of public procurement market in Poalnd and in the EU together with problems that SMEs face when applying to award a contract.