How the public sector buys small things: direct procurement in the European Union and the opportunities for the Social Economy organizations

Abstract

Direct (or low value) procurement can foster the participation of SMEs in public procurement. However, although they all come from the same Directive, a review of the national legislations shows that there is not a common model for this type of procedures. The thresholds in the national legislations vary without a visible explanation for it. To assess if countries can be grouped a hierarchical analysis was performed. Meanwhile, to research whether economic and social factor can influence the establishment of different conditions for direct public procurement in each Member State a regression model was applied. The results contradict the widely proclaimed intention of promoting SMEs in public procurement, since there is not direct relation between the percentage of SMEs in the economic fabric and the thresholds for the contracts. The limitations on direct procurement have probably more to do with cultural reasons and legislative traditions than with economic and social factors. Higher thresholds and specially the differentiation for, social services that present some Member States could be an opportunity for social entities. The legislative modifications of several countries point in the direction of favoring a minimum number of competitors. The study shows that noticeable divergences can be found in the way Member States regulate direct procurement, contrary to the convergency that can be observed generally in the field of public procurement.