SMEs in Public Procurement

30. Norway

30.1. SMEs in the national economy

The bulk of employer firms are SMEs, employing between 1 and 249 employees and accounting for 99.5% of total firms with employees. When defining SMEs as firms having less than 250 employees – the definition in several EU countries – virtually all Norwegian firms are classified as SMEs, which would be too high with respect to the structure of Norwegian businesses (OECD, 2017[1]).

Table ‎30.1. Distribution of firms in Norway, 2013

By firm size.

Firm size (employees)	Number	%
Total firms	437 247
Firms with 0 employees	284 525
Employing firms	152 722	100%
SMEs (1-249)	152 030	99.5%
1-9	124 345	81.4%
10-49	24 145	15.8%
50-99	2 239	1.5%
100-249	1 301	0.9%
Large (250+)	692	0.5%

Source: (OECD, 2017[1]).

30.2. National policy framework to support SMEs in public procurement

No specific strategy or policy that defines objectives of supporting SMEs in the public procurement system is developed in Norway. However, the government promotes the possibilities in national legislation for public procurement to facilitate SMEs’ participation in that market. As part of its implementation of the public procurement directive, Norway has conducted several changes in national legislation (i.e for public procurements under the EU thresholds). The main purpose of the new national legal framework was to simplify the rules and highlight the strategic use of public procurement, including procurement for innovation and the participation of SMEs. The latest public procurement regulation was introduced on 1 January 2017.

Following introduction of the changed rules, the Minister of Trade, Industry and Fisheries sent a letter to over 700 contracting authorities, encouraging them to:

• get to know the market and not impose stricter requirements than necessary

• publicise smaller-value contracts in the market, e.g. through voluntary announcements

• consider division of contracts into lots

• use balanced agreements/contracts, preferably standardised contracts.

30.3. Implementation mechanisms

To promote the use of public procurement for innovation, the National Programme for Supplier Development was established in 2010. The programme’s role is to help public purchasers engage with the market about their need to plan and prepare procurement processes, and to mobilise suppliers to participate in these. Experience shows that early market engagement is a good arena for SMEs to position themselves to compete for public contracts. The programme is co-owned by Difi (the Agency for Public Management and eGovernment), the Confederation of Norwegian Enterprise (NHO) and the Norwegian Association of Local and Regional Authorities, representing both the contracting authorities and the suppliers. More than 120 procurement projects have been carried out and systematically evaluated. The projects have brought about several new solutions, savings and socio-economic impacts. The lessons learned from these projects are communicated by the programme and Difi.

In addition, several workshops and seminars on how to facilitate increased SME participation in public procurements were organised to provide guidance to contracting authorities. Difi, through its department for public procurement and its Governmental Procurement Centre, also provides guidance to SMEs on how to participate in public procurement processes and how to bid on line. It has moreover launched sector-specific workshops on “balanced procurement”, where procurers and suppliers (including SMEs) work together for better procurement processes.

30.4. Monitoring performance

There is no obligation to monitor the performance of SME participation in public procurement.

Reference

[1] OECD (2017), Financing SMEs and Entrepreneurs 2017: An OECD Scoreboard, OECD Publishing, Paris, http://dx.doi.org/10.1787/fin_sme_ent-2017-en.