Brussels, 03/08/2006 (Agence Europe) - At his monthly press conference on 31 July, the French Prime Minister Dominique de Villepin expressed support for “setting up at European level a quota for SME access to procurement contracts in order to encourage their growth”. France has been arguing for several months for the European Union to put in place a measure for SMEs similar to the American Small Business Act (SBA), which sets a minimum percentage of direct public contracts (23%) or sub-contracts to be awarded to small businesses to encourage their growth. Since 1953, every year, Washington reserves almost 100 billion dollars worth of public orders for American SMEs.
On 12 July, French trade minister Christine Lagarde sent trade commissioner Peter Mandelson a memo asking the Commission to improve SME access to procurement contracts in the EU. Paris wants to help firms with fewer than 250 employees and with an annual turnover of under €50 million compete with large companies when they respond to public calls for tender. Behind this initiative is the fact that, today, it is SMEs, not large industrial groups, which are creating most jobs. Ms Lagarde is not suggesting a US-style quota to be reserved, but sees the way forward as being through incentive schemes. For example, Member States could be required to choose a small supplier, even though it may be more expensive than a large company, if its offer does not exceed the offers of its major competitors by more than 5%.
With the European Union due to formalise its position on the re-negotiation at the WTO of the multi-lateral Agreement on Government Procurement (AGP) by September, talks not linked to the Doha Round and supposed to be concluded by the end of the year, France hopes that the Commission will use the opportunity to negotiate a clause allowing the implementation of this kind of measure, “as some countries, including the United States, have already done”. Ms Lagarde says that France has the support of eleven EU Member States. If they are achieved, the French requests would also require the amendment Community directives of 2004 on public procurement, for example, on the possibility of exemptions. Public procurement represents business worth some €1,500 billion at European level, and €130 billion in France.
ESBA supports European “Small Business Act”
In order to compete with the United States and transform its small and medium-sized enterprises into world leaders, the EU must introduce a “Small Business Act” for Europe and set quotas for SMEs in the allocation of public contracts, the EU must introduce a “Small Business Act” for Europe and set quotas for SMEs in the allocation of public contracts says the European Small Business Alliance (ESBA) in a press release. Since the United States, Canada and Japan have won a preferential position for their SMEs in the Agreement on Government Procurement within the World Trade Organisation (WTO), ESBA has called for the EU to reach a similar agreement for European SMEs. It says that this would generate a further €1,000 billion in the form of public contracts for innovative SMEs in the EU and promote the expansion of 1000 new large companies. In innovative sectors, like health care, defence, energy, transport and space, only 5% of public contracts are awarded to SMEs, says ESBA, basing its statement on statistics from the European “Sun&Sup” project (see also EUROPE 9171).