French SMEs cry ‘non’ as government procurement looks for bigger deals

We're very conscious that we don't feature enough material from outside the UK, and we're going to try hard to address that in the near future.

Starting with this interesting news from France and the L'Expansion website; small businesses are up in arms about losing business.  In 2009, the French Government established national pooling of purchases by the "Procurement Service of the State (SAE)"; aggregating spend and looking to do national procurement deals with major suppliers. But this had a a negative effect, as might have been predicted, on smaller more local or regional suppliers.  The 'problem' was debated in the National Assembly yesterday (Feb 3rd.)

There's an interview in L'Expansion with a small office supplies provider in Toulon who has lost 20% of their sales; big contracts with the Police and others have gone to to the national deal with Lyreco.

"J'ai déjà perdu plusieurs marchés dans le Var, notamment ceux de la Préfecture, de la Direction du Travail, de la Gendarmerie et de la Police nationale : 20% de mon chiffre d'affaires en fournitures de bureau s'est envolé. "

The owner, Jacques Rouard, points out that there will be no competition if one day there are only large companies left; and that regional tenders would give smaller firms a chance to show they are just as competitive; and that it is SMEs who create growth and employment.

These are of course common issues for governments and business in every country.  A drive to aggregate because that is seen as a route to efficiency and lower prices; to be set against the benefits that smaller suppliers can bring.  (And we wrote here about some of the myths of 'economies of scale').  Difficult issues, and they have a political dimension as well as purely economic. Governments don't want to upset the small business lobby too much.

We'll see if we can feature any conclusions the Assembly come to.

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