The Commission has published a guide targeted at small and medium enterprises (SMEs) to help them comply with competition law when tendering as part of a consortium.
The guide delivers on an important commitment in the Action Plan for Jobs, as part of a suite of measures to make it easier for SMEs to access procurement opportunities from Government.
It has been developed to assist businesses who want to join together to form a consortium to submit a joint tender for a public contract.
The Office of Government Procurement (OGP) has been tasked with centralising public sector procurement arrangements which is designed to improve efficiency and value for money in public purchasing. Earlier this year the OGP adopted new measures that aim to make public procurement more accessible to SMEs. Among other things, the OGP’s measures encourage SMEs to consider using consortia where they are not of sufficient scale to tender in their own right. Consortium bidding must be carried out in a way that complies with competition law. For that reason, the Commission is now publishing this guide on competition law to help SMEs to get involved in consortium bidding. The Commission consulted with the OGP to produce this guide for SMEs.
Commenting on the publication of the guide, Minister for Jobs, Enterprise and Innovation, Richard Bruton, TD, said,
“In recent years, as part of the Action Plan for Jobs, the Government has put in place a number of measures to support SMEs in accessing more opportunities from public procurement. Public procurement offers a massive market to Irish businesses, and facilitating more Irish businesses in winning opportunities from the State will help create jobs in Ireland. This guide from the Competition and Consumer Protection Commission will provide an important resource to SMEs in accessing public procurement tenders. Consortium bidding offers an opportunity for SMEs to pool their knowledge and expertise and submit joint bids that can offer competitive and innovative solutions to the purchasing body.”
There are a number of reasons why firms might decide to create a consortium in order to submit a joint bid for a public contract. For example, it may be the case that the firms individually do not have sufficient turnover to meet the minimum turnover requirements or do not meet all of the necessary experience or technical capacity requirements set by the purchasing body in the tender competition. However, consortium bidding must be carried out in a way that ensures that the firms involved comply with competition law, both in the tendering process itself and in the market generally. Consortium bidding often involves firms that are actual or potential competitors coming together to submit joint bids for public contracts. Consortium members must make sure that their collaboration on a joint bid does not spill over into their activities in the market more generally and become a means for them to engage in anti-competitive behaviour outside the scope of the joint bid.
At the launch of the guide today, Isolde Goggin, Chair of the Competition and Consumer Protection Commission said,
“The mission of the Commission is to make markets work better for consumers and businesses. This guide is part of our work in listening to the concerns of business and supporting them in complying with competition law. The public sector is a major purchaser of goods and services in Ireland. In 2013, the public sector spent in the region of €8.5 billion on purchasing goods and services, in addition to expenditure on public works.This level of expenditure offers significant business opportunities for firms that can provide the goods and services required by public bodies. Excluding efficient SMEs from public procurement could potentially have a detrimental impact on competition”.
Speaking on the wider economy impact, Ms Goggin said, “Including efficient smaller firms and new entrants could result in greater value for money for the State. It should also increase the number of firms that take part in a tender competition, which should increase competition and decrease the cost of goods and services purchased by the State.”
The Competition and Consumer Protection Commission was established on 31 October 2014, with the merger of the Competition Authority and the National Consumer Agency, and is the statutory body responsible for enforcing consumer protection and competition law in Ireland.
This guide fulfils one of the Competition Authority’s obligations under the Action Plan for Jobs 2014. A number of actions were included in the plan designed to maximise procurement opportunities for SMEs. Responsibility for fulfilling those commitments falls primarily to the Office of Government Procurement. The OGP is due to produce guidance on compliance with procurement law.
In preparing the guide, the Commission consulted bilaterally with a range of relevant stakeholders including government agencies, business representative associations, and legal practitioners with expertise in competition and procurement law.
The Guide for SMEs, ‘How to comply with competition law when tendering as part of a consortium’ is available here