SMEs in Public Procurement

1. Iceland

1.1. SMEs in the national economy

SMEs in Iceland are significant actors in the “non-financial business economy”. They contribute to approximately three-fourths of total employment and more than two-thirds of value added.

Table ‎1.1. Basic figures of the non-financial business economy of Iceland, 2014

Estimates for 2014 based on figures from the Structural Business Statistics Database (Eurostat)

	Number of enterprises		Number of persons employed		Value added
	Number	Share	Number	Share	(in billion EUR)	Share
Total	24 255	100.0%	104 890	100.0%	6 531	100.0%
SMEs	24 200	99.8%	77 620	74.0%	4 442	68.0%
Micro	22 707	93.6%	29 218	27.9%	1 552	23.8%
Small	1 267	5.2%	25 422	24.2%	1 282	19.6%
Medium-sized	226	0.9%	22 980	21.9%	1 608	24.6%
Large	55	0.2%	27 270	26.0%	2 090	32.0%

Note: These data for 2014 are provided by Statistics Iceland and Eurostat (Structural Business Statistics Database), and were processed by DIW Econ. The data cover the non-financial business economy, which includes industry, construction, trade, and services (NACE Rev. 2 sections B to J, L, M and N), but not enterprises in agriculture, forestry or fisheries, or largely non-market service sectors such as education and health. The advantage of using Eurostat data is that the statistics are harmonised and comparable across countries. The disadvantage is that for some countries the data may be different from those published by national authorities.

Source: (European Commission, 2017[1]).

1.2. National policy framework to support SMEs in public procurement

Considerations regarding SMEs are integrated into general public procurement policy, especially with a view to increasing competition in public procurement. Ríkiskaup, the central purchasing body of Iceland, urges contracting authorities to divide contracts into lots, except where proper justification exists, so that the size of the tender does not discourage SME participation.

Implementation of the e-tendering system, scheduled for 2017, as well as use of the European Single Procurement Document and e-access to databases to obtain certificates and attestations is expected to further standardise and simplify public procurement procedures.

1.3. Implementation mechanisms

Ríkiskaup hosts a conference biennially to inform economic operators and buyers about the latest changes in public procurement. It has also provided educational seminars about public procurement, which were organised by the Federation of Icelandic Industries. Ríkiskaup has also offered seminars on public procurement law in co-operation with the University of Iceland for both contracting authorities and economic operators. These events are not specially held for SMEs. However, as the majority of the business population in Iceland are SMEs, these events help increase visibility and understanding of the public procurement system and facilitate SME participation in public procurement.

Furthermore, in order to increase the participation of craftsmen’s enterprises in a framework agreement on craftsmen services, several visits have been made to their organised interest meetings.

1.4. Monitoring performance

As 99.8% of companies in Iceland are SMEs, there is no specific monitoring mechanism regarding SME participation in the public procurement market. In 2016, SMEs were awarded 91% of the contracts from Ríkiskaup in terms of number, which represented 90% in terms of volume.

Reference

[1] European Commission (2017), SBA Fact Sheets 2016, http://ec.europa.eu/DocsRoom/documents/22382.