UK firms' complacency is costing billions in lost work

2 December 2004
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02 December 2004 | Cara Whitehouse

A legal expert has slammed UK firms for their complacent attitude towards European Union governments unfairly favouring their national suppliers.

Robert McLean, a partner at legal firm Crowell & Moring, said a recent report highlighted problems British companies face when they compete for foreign-government contracts such as IT, construction and road building.

The Wood Review, by Alan Wood, chief executive of UK operations for engineering and electronics giant Siemens, said British firms have a "shrug your shoulders" attitude that loses them billions of pounds of work.

It found that governments loosely interpret EU procurement rules to award public works contracts to national suppliers even where foreign bidders offer better prices or quality.

Foreign companies are sometimes invited to bid simply to beat down the price offered by local businesses, with the client having no intention of using an out-of-country supplier.

McLean said some British firms challenge these awards but too many are apathetic about questioning the processes if they think they were treated unfairly.

"Bid protests are a way for companies to dispute the loss of contracts," he said.

"National favouritism issues could be taken to court, stalling contract completion. But British companies can't be bothered."

McLean said firms should chase tender invitations that are poorly circulated in Europe and advertised only in the local language.

But Professor Chris Bovis, Jean Monnet chair of European and business law at the University of Central Lancashire, said going to court was not realistic.

"The EU essentially does not have a regime to penalise wrongful awarding of contracts," he said. "Those who misuse the system to unfairly favour domestic suppliers should be named and shamed."

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