Consortia and Tenders

Most Danish companies can be categorised as small and medium-sized enterprises (SMEs)1. If SMEs do not fully contribute to creating competition for public contracts, it may mean that the prices of contracts increase and that public expenditure is therefore increased, as competition is restricted to a small part of the market and is thus not as effective as it could be.

The Danish Public Procurement Act, which came into effect on January 1, 2016, introduced a number of measures intended to improve SME access to competition for public contracts. For example, the procuring entity has to justify not choosing to divide a contract into smaller partial contracts.

When small businesses wishing to bid for a public contract are faced with requirements regarding e.g. sales volume, it can make them consider joining up with other companies to form a consortium to bid for the contract. Collaboration can also increase the chance of winning a tender if the contract is large and complex, compared to the type of tasks a company usually works with.