We know that suppliers in SMEs can compete effectively with their larger counterparts and deliver value for money, but in order to increase awareness of which contracts are available, suppliers need additional information and better tools for processing procurement information in order to make better decisions.
We will deploy an online portal for suppliers, deliver the data value chains, enabling technologies, and innovation that are critically needed for this fundamental change to happen. This will include:
- Subcontracting tool, allowing smaller suppliers to register their interest in becoming a subcontractor on any larger project advertised in the TED portal. Once a supplier registers, the interest shown by a supplier will be forwarded to the buyers, so that they can see the level of interest in different sub-contractors. Larger suppliers could also register to find out more about the firms looking to subcontract on tenders.
- Direct engagement tool, allowing smaller suppliers to identify opportunities that may be suitable for SME suppliers before a tender is awarded. Using data on whom contracts are awarded to, we can determine the likelihood of business going to smaller suppliers and then give a ranking to each opportunity on its suitability for smaller suppliers.
- Value for money analysis tool, comparing the performance of smaller suppliers when delivering value for money. Using the data on spending with smaller suppliers we can build an evidence base to determine whether smaller suppliers are likely to deliver value for money.
- Overspend analysis tool, which monitors overspending in contracts and to link it to buyers and suppliers to predict overspend in existing contracts and to show where buyers or suppliers have a significant history of overspending on contracts.
We will develop an integrated technology platform, with data, core services, open APIs and online tools, which will be validated in 3 business cases in public/corporate procurement in Slovenia, Spain and Italy.
The expected impact is substantial, with €200m savings in EU public spending; 25% increase in the value unlocked by enhanced procurement management in the private sector; and 20% more SMEs bidding for contracts.
Specifically we will develop technologies and online tools that will make it easier for smaller suppliers to engage in the public-sector supply chain:
- Identifying opportunities: Looking at the categories, sectors and contract sizes that make projects suitable for smaller companies. As well as looking at the supplier qualities required to deliver on these projects.
- Mitigating risks: Identifying the levels of resilience and the attributes that suppliers need to display to deliver successfully. As well as how to structure projects to absorb failure, rather than trying to prevent all failure, as this leads to more expensive projects with few supplies.
- Establishing procurement practices that engage SMEs: Development of tools that provide early warning of upcoming projects that could be completed by SMEs. Using data to identify where buyers are routinely using structures that hinder competition and prevent SMEs from bidding.
- Managing down the supply chain: Developing tools that allow SMEs to publicly state an interest in sub-contracting on a project, including being able to submit details of their own capabilities.
- Whole cost analysis: Developing algorithms that allow buyers to complete a ‘whole-cost’ estimates of awarding a contract to a supplier including the likely tax revenues to be gained from a supplier and the positive impact that the supplier may bring economically to a buyer.