22 November 2006 | Antony Barton
The government will be forced to award small businesses a fixed quota of procurement contracts, if the EU opts out of a worldwide trade agreement.
The UK's Forum of Private Business (FPB) is calling on the EU to lobby for a deadline extension relating to the World Trade Organisation's Agreement on Government Procurement. This agreement, in force since 1981 is, according to the FPB, discriminatory to businesses with fewer than 50 employees. A departure from the agreement would allow individual EU member states to set quotas on the volume of work awarded to small businesses (News, 2 Nov).
The FPB told Supplymanagement.com that larger firms find it easier to handle the bureaucracy involved in bidding for government contracts. It adds that many smaller firms have not been operating long enough to provide the substantial account records that sway decisions when awarding contracts.
EU commissioner Peter Mandelson must submit a proposal to the WTO this month in order to opt out but the FPB wants this deadline extended. A spokesman said: "So far Mr Mandelson has resisted our calls but we are confident there is both the opportunity to delay the deadline until March 2007 and growing support for this in other member states."
At a roundtable event held this week on small firms' access to public procurement, the FPB's European spokesman, Martin Smith, said: "We must make sure smaller businesses in the UK and the EU are allowed to enjoy the same advantages as their counterparts around the world when it comes to public procurement."
Other nations, including Japan, South Korea and the US, have already negotiated an exemption from this agreement.