New EU Directive Will Make It Easier For SMBs To Tender For Public Sector Contracts Across The Continent.

What’s your opinion of the EU? Well, the truth is the jury’s still out on that matter as the looming threat of an In-Out referendum clearly demonstrates.

Yet most small businesses and their accountants would broadly agree that in spite of appearing unnecessarily bureaucratic at times, the EU has been good for business. If proof were needed then you need look no further than the latest EU directive which will make it easier for SMBs to tender for public sector contracts.

The newly-approved legislation should help the UK’s small firms compete right across the continent.

Under the current tendering system, UK SMEs bidding for public sector contracts have to provide extensive supporting evidence with their application. However, the new directive will change the system so that businesses only need to support their application once a tender is successful. 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.

It is hoped that the new package of EU procurement directives will make it faster and, more importantly, cheaper for SMEs to bid for public contracts. How much cheaper? Well, the European Commission estimates that the new legislation will slash the cost of bidding for public contracts by almost two-thirds- almost 60 per cent. 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.

Speaking about the new directive, 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.”

The added benefit for the UK government is that under the new directives, it 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. According to Mr Maude:

“This is a much more sensible, commercial approach, which brings the public sector more in line with the private sector.”

If you would like further information on the new small business public sector tendering directives or are looking for small business tax and funding advice, then contact Steven Glicher accountants on 0161 405 8007.

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