Attracting a small business

An open dialogue and attractive bidding opportunities.

The best time to improve the chances for small businesses to participate in a food procurement round is in the planning phase and when drafting the tender document package. It is important to have a solid understanding of the food market and to be open to a dialogue with conceivable suppliers – all in the interest of giving all tenderers a solid chance and of being able to offer appealing bidding opportunities. Small businesses need to learn about how the procurement process works and potentially partner with others to strengthen their own capacity.

How do you structure a tender document package that also gives small businesses a good chance of success?

Listed below are some good tips.

  • Make plans well in advance and announce the procurement. You have a greater chance of receiving more tenders with a longer time perspective. Announce forthcoming procurement rounds and environmental objectives that are in the works on your website or by informing trade organisations.
  • Become well-acquainted with the food market – which companies can deliver what and how they are structured as companies. Engage in dialogue with conceivable suppliers and do research ahead of potential requirements in the tender document. One key point to research prior to the start of the procurement process is how the sector addresses environmental issues.
  • Review your organisation’s own needs, such as what types of food have normally been procured. Shifting menus and “habits” in accordance with a seasonal approach, for example, may indirectly lead to more local products becoming potential goods. Also research the possibility of receiving deliveries of fresh goods to the kitchens and if co-deliveries can be made.
  • Give suppliers the ability to submit tenders for parts of the product range or for certain units. If you are operating under the assumption of a single supplier being able to manage the entire contract, there is considerable risk of companies with less capacity refraining from submitting tenders, though nothing prevents the tender document from being designed to allow for bidding on parts of the contract and/or for the full contract. 
  • Review what qualification requirements are being stipulated, such as requirements on a company’s equity ratio, liquidity, insurance policies, etc. A company’s invoicing procedures may also have an influence. A long credit period of, say, 90 days, may cause small businesses and perhaps newly started companies to hesitate. Analyse which requirements risk hampering a company’s participation in a particular procurement round. 
  • Offer a sufficiently long bidding period and extend it if a particular sector is being affected by holidays or is in a low season. Also, do not make the period between the procurement process and the effective starting date of the contract too short.
  • Use specific contract conditions to a greater degree instead of stipulating requirements that must be fulfilled as soon as the tender is submitted. This gives suppliers an opportunity to acquire certain equipment or products for their selection if they are awarded the contract.
  • Enclose checklists and/or a tender template of a simpler nature to avoid having to unnecessarily reject any tenders solely on technical grounds. 
  • Multiple municipalities and county councils/regions focus on offering various logistical solutions or co-distribution that make it easier for companies to make deliveries. This facilitates matters for those with a limited transportation capacity. Generally speaking, companies only deliver to one location, with distribution to different organisations subsequently being coordinated. 
  • Make sure to follow-up on contracts that are currently being carried out.

What is the definition of an SME?

Micro companies comprise businesses with fewer than ten employees and with an annual turnover or total assets of less than EUR 2 million.

Small businesses are defined as companies with fewer than 50 employees and an annual turnover or total assets of less than EUR 10 million.

Medium-sized businesses are companies with fewer than 250 employees and an annual turnover or total assets of no more than EUR 50 million and EUR 43 million, respectively.

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