"In principle, we welcome that the Bavarian state government aims to simplify public procurement in municipal construction by expanding the upper limits for direct awards" explained Sebastian Schneider, one of the authors of the IfM study "Mittelstand-Friendly Design of Public Tenders", regarding the presentation of the "Modernisation and Acceleration Program Bavaria 2030." This is because raising the thresholds simplifies public procurement, as direct awards involve less administrative work, which speeds up the procurement process. However, direct awards typically benefit companies already known to and trusted by the procurement entities.
In contrast, access to public contracts for startups and innovative companies will be hindered by the Bavarian initiative. By raising the threshold values and consequently increasing the number of direct awards, many public tenders will no longer be accessible to all companies. "Therefore, this measure should only be a temporary solution until the public procurement system has been fundamentally revised. Our research indicates that there are numerous obstacles in the central, open procedures accessible to all companies and in public tenderswhich particularly disadvantage SMEs," reports the IfM researcher.
The IfM researchers identified the biggest hurdles for Mittelstand enterprises (SMEs) as a lack of explanations for the tenders from the procurement entities and difficult contact opportunities, low user-friendliness on the digital platforms, and excessively high requirements in the tenders. Although there are generally solutions for many of these obstacles that would make the procurement process more SME-friendly, these are often not implemented because the procurement entities lack the necessary per-sonnel and financial resources.
It would also be helpful to harmonise the legal framework for public procurement across Germany. This would not only ease the process for companies but also contribute to more efficient work by procurement entities and enable user-friendly digitisation measures. As part of such harmonisation, rethinking bureaucracy and regulation in procurement law from the conventional "Command and Control" approach to a more risk-based "Enable and Motivate" approach could also be addressed. As part of this, for instance, in public procurement processes, requirements for documentation could be waived (partially), which would make procurement decisions more prone to risk, but would also relieve Mittelstand enterprises as well as procurement entities.
