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Press release Small and medium-sized enterprises are disadvantaged when participating in public tenders

Sustainability aspects in public tenders should be implemented in an SME-friendly manner

"In principle, it is to be welcomed that the German government wants to amend public procurement to make it more efficient and sustainable. However, the consequences for small and medium-sized enterprises should also be considered," explains Dr Nadine Schlömer-Laufen, project leader at the Institut für Mittelstandsforschung (IfM) Bonn. Her research team analysed comments from a public consultation by the Federal Ministry for Economic Affairs and Climate Action and conducted a comprehensive literature analysis. This revealed that small and medium-sized enterprises (SMEs), in particular, experience obstacles at every stage of the procurement process – from searching for suitable tenders to submitting bids. This often leads to SMEs refraining from participating in public tenders, despite being interested in them.

The IfM research team identified the biggest hurdles: a lack of information from the awarding authorities, difficult contact options, user-friendliness on digital platforms, excessively high tender requirements, and excessive bureaucracy. If sustainable procurement were to be strengthened during public procurement, this would further increase both the requirements and the bureaucratic burden for SMEs. Both are already perceived as being too high. However, in order to ensure legally compliant sustainable procurement, the awarding authority must impose corresponding requirements on bidders and demand corresponding evidence from bidders.

To not further increase the hurdles for SMEs, the IfM researchers believe that the planned amendment should be implemented in two stages: Firstly, the existing obstacles for SMEs in the procurement process should be removed - and only then should public procurement be made more sustainable.

"An alternative to the two-stage implementation of the amendment could also be that sustainable procurement is strengthened, but the requirement for additional evidence is waived. This would avoid further increasing the bureaucratic burden and requirements for SMEs. This would make procurement decisions less legally secure. However, the example of other countries with innovative public procurement shows that this approach can be a working model," says Dr Nadine Schlömer-Laufen.