Improving the access of SMEs to cross-border defence procurement
(From ec.europa.eu)
A set of recommendations to improve the access of small and medium-sized enterprises (SMEs) to cross-border defence procurement and the supply chains of large defence companies has been published.
The recommendations were developed by an ad-hoc European Commission “Advisory expert group on cross-border access for SMEs to defence and security contracts”. The report is published in the context of today´s adoption of the European Defence Action Plan and of the Evaluation Report of the Defence Procurement Directive.
The about 9 000 SMEs in European defence industry supply chains are often specialised product or service suppliers in niche markets, whereas the prime contractors (usually large companies), are at the top of the supply chains where they act as system integrators of complex defence products.
SMEs find it particularly difficult to access cross-border defence contracts due to a lack of information, administrative burdens, language barriers, cultural, legal and administrative differences between EU countries, and costs related to distance. They also have to deal with nationally classified information and data, security of supply requirements, national standardisation and certification, and national export control regulations.
Key findings and recommendations
The selection of recommendations below (the complete set of recommendations can be found in the full report) have been developed so that prime contractors should always be able to work with the most competitive sub-suppliers and SMEs irrespective of their location. These recommendations have been designed taking into account the need to avoid any negative impact on prime contractors’ competitiveness.
1. Government procurement
EU countries should endeavour to facilitate cross-border and SME participation in their public procurement procedures. They can do this by:
- providing early information about long-term plans and priorities.
- using pre-procurement advertising, advertising procurement opportunities as widely as possible, and improving the quality of information in tender notices.
- as far as possible, designing public procurement procedures to facilitate cross-border and SME participation.
- improving procurers' skills and training for suppliers/providers.
2. Prime contractors (supply chains)
Prime contractors are invited to maintain an open, fair and impartial approach in managing their supply chains to provide opportunities to sub-suppliers and SMEs from all EU countries. They can do this by:
- making potentially interested suppliers aware of future requirements via strategic long-term plans, pre-procurement and subcontracting advertising, as well as enabling and promoting unsolicited proposals.
- promote the use of accreditation systems and support civil–defence transitions and orientation of sub‑suppliers.
- showcasing existing cross-border suppliers in their supply chains.
3. Other actions at EU level to promote access to cross-border contracts
- revising the Commission’s guidance documents on subcontracting and security of supply and possibly providing guidance on cooperative procurement to enhance cross-border delivery possibilities to the supply chains of prime contractors.
- improving the functioning of the Tenders Electronic Daily (TED) system.
4. SMEs and sub-suppliers’ capacity building
- promotion of cross-border bidding by SMEs and supporting them in combining forces to increase market power.
- providing support to defence SMEs that want to go international.
- improve EU wide databases for defence companies (including SMEs) and their capabilities, on the basis of existing ones .
- use cooperative procurement more extensively.
5. Research and Technology (R&T) and innovation
Investing more extensively in R&T may create additional business opportunities and enable supply chains to expand more easily and be more flexible.
6. Easing the intra-community transfer of defence related products
Deliveries from cross-border sub-suppliers may be hindered due to the intra-community defence transfer practices deterring prime contractors from looking for sub-suppliers across an EU border. Support of effective implementation of the Directive, including through the promotion of more uniform general transfer licenses may lead to reducing the burden for industry to supply across borders.
How will these recommendations be followed up?
The Group considers that the Commission, in cooperation with the EDA, should initiate wider discussions of the report´s recommendations with all EU countries and with industry stakeholders, which contribute to a more integrated, sustainable, innovative and competitive defence technological and industrial base (EDTIB).