Send article by e-mail
Every fifth supplier in Denmark, who has the public sector as a possible customer, experiences that the public sector reached more than three years ago itself has said a task. This means that the fewer assignments will be put out to tender. In addition, expensive procurement processes and a narrow focus on price mean that many in the supplier market completely refrain from participating in public tenders. This emerges from a new survey conducted by Danish Industry.
Dansk Industri conducts a survey among its members four times a year, called Dis Virksomhedspanel. The members are representatively divided into both sizes and industries. In the survey for the 3rd quarter, 741 members participated. Of these, just over 400 say that the seller to the public or has opportunities for it.
Just under 6 out of 10 believe that they have not registered a trend of fewer tasks being put out to tender. 20% think they see such a trend, 20% do not know. These are the tasks such as cleaning, waste management or maintenance of roads and green areas.
Statistics otherwise show that the Danish index for how large a share of the public budgets used for purchases in the private supplier market has fallen for the third year in a row.
Transaction costs and price
Among the suppliers who do not currently sell products or services to the public sector, but who have the opportunity to do so, just over 30% answer that this is due to the fact that the cost of making offers in relation to the size of the contract has become too great. About 20% state that the public sector places too much emphasis on price, and that for that reason they refrain from participating in public tenders.
Just over one in ten in the survey say that they are not in the competition because they have not yet managed to win such a competition. Nearly 30% give «another explanation» in answer to the question of why they are not in the competition – or who do not know why they do not sell to the public.
Could, but does not sell
This shows results in the survey for Danish Industry, which is especially the smaller suppliers with up to 20 employees who do not sell to the public despite the fact that they believe they have the opportunity.
Dansk Industri states that figures from the European Commission show that as much as 42% of Danish public procurement is decided on the basis of the lowest price. Current research, however, shows that across industries it can see a correlation between higher prices before entering into a contract for sale to the public sector compared to to private individuals.