Anthony Flynn

The impact of size on small and medium-sized enterprise public sector tendering

This article examines the relationship between firm size and public sector tendering. The findings show that size, measured by employee number, significantly influences small and medium sized enterprises’ (SMEs) tendering resources, behaviour and success; as such, micro-enterprises are resource-disadvantaged, tender less often and have lower success rates compared to small and medium-sized firms. These findings indicate that SMEs are heterogeneous tenderers, and point to the need for more focused research on how SME characteristics influence ability and willingness to tender.

The policy–practice divide and SME-friendly public procurement

Policies aimed at supporting small- and medium-sized enterprises (SMEs) are now standard in public procurement. Interest in these policies has yet to be matched by evidence on their implementation. Using an institutional perspective, we examine public buyers compliance with SME-friendly policy recommendations. The results, which are based on the self-reported behaviours of 436 respondents, show that public buyers are complying with some but not all policy measures. Compliance is high on measures including open tendering, provision of feedback and self-declaring financial capacity, but low on measures that impose higher transaction costs, such as dividing contracts into lots and encouraging consortium bidding. Further analysis reveals that involvement in procurement, policy familiarity and perceived importance of SME access act as positive predictors of compliance; being part of a semi-state/utility company, local authority or education institution has the opposite effect. Possibilities to increase compliance and bring about a more SME-friendly tendering system are discussed.

The rhetoric and reality of SME-friendly procurement

Small- and medium-sized enterprise-friendly policies are central to public procurement. The extent to which these policies have been put into practice has gone largely untested. To address this gap, a survey of SMEs’ reported experiences of policy implementation was conducted. Ireland served as the research context. Policy implementation was found to be limited. Company size was a significant predictor of SMEs’ experiences, with micro-enterprises more negative than small or medium-sized enterprises. The authors explain the policy–practice divide and make recommendations for improvement.

Public buying decisions: a framework for buyers and small firms

Purpose – The aim of this paper is to explore the factors that influence buyer decision-making in public procurement. The objective is to better understand the processes and conditions that support different supply arrangements, which maximise SME participation. Design/methodology/approach – The paper uses case study evidence of contract awards across multiple organisational contexts including: a local authority, commercial semi-state, police force, and a tourist agency. Findings – National policy and the role of procurement exerted mixed effects upon the cases. The procurement processes were broadly similar and included cross-functional teams, consideration of trade-offs and market research. Research limitations/implications – The paper highlights the transition of public organisations toward strategic procurement including supplier engagement. Practical implications – This offers buyers a decision support tool that promotes equal opportunities for SME participation, a key goal of EU procurement. The imp...

An exploration of management competencies in public sector procurement

There is currently much debate about the meaning of competency and its importance to professionalization. This article explores the personal meaning and importance of competency from the perspective of public buyers and managers in Ireland and the UK. Using an in-depth mixed method research design, we propose a typology of public procurement competency and discuss the implications of the framework for professionalization of public procurement.

Theory in public procurement research

This paper examines the role of theory in public procurement research. Theoretical rigour is integral to management science, yet little is known on the extent and form of theory in public procurement. With the field starting to mature, addressing this issue is timely. From conducting a systematic literature review we find that 29 percent of articles are theoretically grounded, with the incidence of theory having increased in recent years. Economic, sociological, psychological, and management theories are all in evidence, but micro-economic theories predominate. Our findings also show that survey reporting and case studies account for almost half of all studies; procurement research is focused on organizational-level aspects more than regulatory-policy issues or public buyers; and studies to date have largely emanated from the North American and European regions. The contribution of this paper lies in clarifying the theoretical underpinnings of public procurement. Out of this we highlight the need for greater theoretical rigour, point to the under-use and even absence of theories that could have high validity and utility, and suggest a narrowing of research foci.

Re-thinking SME disadvantage in public procurement

Purpose The purpose of this paper is to investigate the relationship between firm size, resources, capabilities and involvement in public procurement. While the liability of smallness has been a recurring theme in research into public sector suppliers, there remains a dearth of evidence and theorising on the effects of size. Design/methodology/approach A model linking firm size, resources, capabilities, tendering activity and performance is devised. Resource-based view theory informs the model. Survey data from over 3,000 firms active in the Irish public sector marketplace is used to test the model. Findings As hypothesised, firm size is positively associated with tendering resources and capabilities. Resources and capabilities, in turn, influence tendering activity and performance. Specifically, resources act as enablers for the number and value of contracts firms tender for while capabilities are important for winning contracts. The author also finds similarities between medium and large enterprises in their ability to tender. Research limitations/implications The treatment of tendering resources and capabilities is not exhaustive. Future research could include additional indicators of resources (e.g. external consultants, IT) and capabilities (e.g. production, process innovation). Practical implications Managers of micro and small suppliers should focus on augmenting their tendering capabilities as they lag bigger suppliers. Legislators need to re-assess current “one-size-fits-all” small and medium enterprise (SME) friendly policy as it is not sensitive to intra-SME differences. Originality/value This study introduces an important qualification into understanding of public sector suppliers by demonstrating that SME disadvantage is less black and white than shades of grey.

Investigating the effect of tendering capabilities on SME activity and performance in public contract competitions

Barriers to small and medium-sized enterprise (SME) participation in public procurement have been the focus of research for many years. Much less attention has been paid to the predictors of SME success. This article examines the role that tendering capabilities – relational and procedural – play in explaining SME activity and performance in public contract competitions. Analysis of primary survey data from 3010 SMEs supports a capability-based perspective. Procedural capability has a significant effect on number of tenders submitted and value of contract sought. Relational capability does not. However, procedural and relational capabilities have a significant and positive effect on contract win-ratio and percentage of total revenue derived from public contracts. For SMEs, these findings underline the importance of investing in tendering skills and devising buyer engagement strategies. Enterprise support agencies and public sector organisations can play their part through the provision of targeted training programmes and better communication with SME suppliers, respectively.

Firms’ experience of SME-friendly policy and their participation and success in public procurement

Purpose – The purpose of this study is to test the relationship between firms’ experience of SME-friendly policy and their participation and success in public procurement. Methodology – Hypothesised relationships between SME-friendly policy and three outcome variables - frequency of tendering, success rate in public contract competitions, and commercial orientation towards the public sector - are tested using survey data from 2755 SME respondents. Findings – SME-friendly policy is found to be significant in explaining success rates and commercial orientation towards the public sector marketplace. It is not significant in explaining frequency of tendering. Originality – This study puts forward and tests an original model of SME-friendly procurement policy and its associated outcomes for firms. It develops a comprehensive 16-item instrument to measure SME-friendly procurement policy. It uses SMEs as research informants instead of public buyers. Limitations – The context for the study is Ireland. However, given institutional similarities in national public procurement regimes, particularly among EU Member States, the findings have relevance beyond the Irish context. The research design is cross-sectional and so does not allow for any causal claims to be made.

Explaining sme participation and success in public procurement using a capability-based model of tendering

This paper develops and tests a model for explaining small and medium-size enterprise (SME) participation and success in public procurement. The model is informed by a capability-based view of public sector tendering that includes relational and procedural dimensions. To test the model a survey was carried out on firms competing for contracts with Irish public sector organizations (n = 3010). The survey was repeated one year later to demonstrate reliability (n = 3092). Overall, the results lend support to the model. Procedural capability is associated with frequency of tendering and typical value of contract sought. Relational capability is not. Procedural and relational capabilities are each significant in accounting for success rates in contract competitions and commercial orientation towards the public sector.