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

The purpose of this paper is to test the relationship between firms’ experience of small- and medium-size enterprise (SME)-friendly policy and their participation and success in public procurement.

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 2,755 SME respondents.

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.

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.

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.