Many public procurement systems have introduced legal rules, policies, and training aimed at empowering small and medium sized enterprises (SMEs) to access and succeed in public sector tender competitions. However, despite these interventions, SMEs continue to remain under-represented in public procurement. While previous studies have identified barriers and challenges to SMEs accessing public sector contracts, they have not focused on the tender submission stage of the process to examine tender submissions’ written content in order to throw more light on the reasons why some SME tender submissions are sub-optimal in quality. This study aims to address this gap and generate insights for research, policy and practice. It thus focuses on one principal research question: What do unsuccessful tender submissions submitted by SMEs in response to public contract opportunities tell us about SME tender weaknesses?
We explore this question by adopting conventional content analysis to examine the contents of unsuccessful tenders from 50 SMEs from the United Kingdom, Ireland, the Netherlands, France, Spain and Italy. These SME tenders were gathered as a result of the authors participating in a series of international procurement projects funded by the EU. Thus, this research moves the field of enquiry forward because to our knowledge, this is the first time that empirical data (i.e., data from real tenders submitted by SMEs to public bodies) has been used to understand the reasons underlying sub-optimal SME tender submissions quality. This fills a knowledge gap for academics seeking a better understanding of an issue central to explaining why SME success rates in public sector tender competitions can be low, in spite of substantial legal, policy and training interventions over the years.
Further, whilst the existing literature has touched upon some of the issues pertinent to this study as part of much wider research into barriers to SMEs’ participation in public sector procurement, no previous studies have focused on the tender stage of the wider tendering process and examined the reasons underlying sub-optimal SME tender quality. The literature therefore has lacked a framework to categorise the weaknesses evident in unsuccessful SME tenders that might prevent them from winning a public sector contract. This study overcomes this gap in two ways. First we provide evidence for the first time (arising from our access to data from real tenders submitted by SMEs to public bodies across several countries) to identify the weaknesses evident in the written content of unsuccessful SME public sector tender submissions. Second, using this evidence, we have categorised the SME weaknesses in a Framework that serves to reveal the core reasons explaining why SMEs can often be ineffective at producing strong and compelling written tender submissions, sufficient to meet the needs of public procurers.
Thus, the research is also relevant on the economic development, procurement practitioner and procurement policy levels, whether it be the promoting of marketplace access for SMEs; the seeking of better value from goods and services supplied to the public sector by SMEs; SMEs sustainability calling in to question the value of efforts by well-meaning bodies such as the European Commission and national and regional development agencies to make procurement more SME-friendly, if one of the major bottlenecks preventing SMEs from winning more public sector contracts is because they themselves do not understand key tendering success factors. The relevance and significance of this study also extends to consideration of the transactional and opportunity costs that SMEs and public sector evaluators (or evaluation panels) incur every time an SME submits a tender that is not “fit for purpose”, as the process is cost and resource intensive.
In addition, the conclusions reached in the study will be of interest to a wide range of national and international stakeholders including the public policy community, SMEs and public procurer practitioners. The findings will also be of interest to those jurisdictions from around the world who have adopted a proactive stance towards embracing SMEs in public sector procurement and removing barriers to their participation.