Fair Public Procurement: How Contract Procedures Affect SME Participation and Success in Tendering
(2025) NEKH03 20242Department of Economics
- Abstract
- Small and Medium – sized enterprises (SMEs) have historically underperformed against large enterprises in winning public procurement contracts both by measure of number of contracts and share of total contract value. Thus, both European Union and Swedish regulators have put forward recommendations on best practice to increase the presence of SMEs in public procurement. This study examines the impact of the hypothesized SME-friendly procurement procedures. Specifically, the use of MEAT (Most Economically Advantageous Tender) award criteria, subdivision of contracts into smaller lots and the open procurement procedure on Swedish SMEs’ participation and success in tendering. Additionally, it is tested if contract value is a barrier for... (More)
- Small and Medium – sized enterprises (SMEs) have historically underperformed against large enterprises in winning public procurement contracts both by measure of number of contracts and share of total contract value. Thus, both European Union and Swedish regulators have put forward recommendations on best practice to increase the presence of SMEs in public procurement. This study examines the impact of the hypothesized SME-friendly procurement procedures. Specifically, the use of MEAT (Most Economically Advantageous Tender) award criteria, subdivision of contracts into smaller lots and the open procurement procedure on Swedish SMEs’ participation and success in tendering. Additionally, it is tested if contract value is a barrier for Swedish SMEs’ involvement in tendering for public contracts. The study is performed on Swedish single-winner contracts posted to the Tenders Electronic Daily (TED) database in 2021 and 2022.
Results reveal that contract value decreases both SME participation in tendering for contracts and success in tendering for micro, small and medium sized enterprises when compared to large enterprises. The hypothesized positive effects of a contract being a subdivided contract (lot-contract) on SME participation and success is only found when the contract is part of a procurement that is subdivided into more than 3 lots. Albeit, when subdividing SMEs into micro, small and medium, these effects are only found to be significant for micro enterprises. Similarly, the MEAT award criteria is only found to benefit small enterprises when compared against large enterprises. While the open procurement procedure increases SME participation, these findings do not translate into tendering success. The results in this study suggest that emphasis on smaller contracts is a key policy goal to increase the involvement of SMEs in public procurement. Findings also indicate that treating SMEs as a homogenous group might hide effects specific to micro, small and medium-sized enterprises. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9184280
- author
- Sjöström, Pontus LU
- supervisor
- organization
- course
- NEKH03 20242
- year
- 2025
- type
- M2 - Bachelor Degree
- subject
- keywords
- Public procurement, SMEs, Contract value, Most Economically Advantageous Tender, Lots
- language
- English
- id
- 9184280
- date added to LUP
- 2025-05-16 10:51:41
- date last changed
- 2025-05-16 10:51:41
@misc{9184280,
abstract = {{Small and Medium – sized enterprises (SMEs) have historically underperformed against large enterprises in winning public procurement contracts both by measure of number of contracts and share of total contract value. Thus, both European Union and Swedish regulators have put forward recommendations on best practice to increase the presence of SMEs in public procurement. This study examines the impact of the hypothesized SME-friendly procurement procedures. Specifically, the use of MEAT (Most Economically Advantageous Tender) award criteria, subdivision of contracts into smaller lots and the open procurement procedure on Swedish SMEs’ participation and success in tendering. Additionally, it is tested if contract value is a barrier for Swedish SMEs’ involvement in tendering for public contracts. The study is performed on Swedish single-winner contracts posted to the Tenders Electronic Daily (TED) database in 2021 and 2022.
Results reveal that contract value decreases both SME participation in tendering for contracts and success in tendering for micro, small and medium sized enterprises when compared to large enterprises. The hypothesized positive effects of a contract being a subdivided contract (lot-contract) on SME participation and success is only found when the contract is part of a procurement that is subdivided into more than 3 lots. Albeit, when subdividing SMEs into micro, small and medium, these effects are only found to be significant for micro enterprises. Similarly, the MEAT award criteria is only found to benefit small enterprises when compared against large enterprises. While the open procurement procedure increases SME participation, these findings do not translate into tendering success. The results in this study suggest that emphasis on smaller contracts is a key policy goal to increase the involvement of SMEs in public procurement. Findings also indicate that treating SMEs as a homogenous group might hide effects specific to micro, small and medium-sized enterprises.}},
author = {{Sjöström, Pontus}},
language = {{eng}},
note = {{Student Paper}},
title = {{Fair Public Procurement: How Contract Procedures Affect SME Participation and Success in Tendering}},
year = {{2025}},
}