Sustainability report

Market functionality and SMEs

Ensuring a healthy market and promoting competition are important features of financial responsibility. Hansel makes every effort to take the operational prerequisites of small and medium-sized companies into consideration in tendering processes. In this field, Hansel collaborates with the Federation of Finnish Enterprises.

Hansel has 383 contract suppliers in total, 20 of whom are from outside Finland. In addition, there are three groupings that each contain at least one foreign company. We keep track of the proportion of SMEs of all contract suppliers and of the distribution of framework agreement sales between SMEs and major corporations. The European Commission’s definition of SMEs is used here.2

In 2014, 43 per cent of Hansel’s suppliers were SMEs. This figure includes all suppliers who have a direct contractual relationship with Hansel; subcontractors are not accounted for. In practice this means that procurement from SMEs under Hansel’s agreements exceeded €91 million during the year.

SMEs as contract suppliers*

2014 2013 2012 2011 2010
Number of SME contract suppliers 164 173 161 263 342
Percentage of SMEs of all contract suppliers, % 43 46 46 64 71
Central procurement from SMEs, M€ 91,5 70,8 115,0 176,2 203,3
Share of central procurement from SMEs, % 12,8 10,2 16,7 26,1 36,7

*In 2012, the classification criteria for associations and for municipality and city-owned companies were revised; these are now included in “Other”. Classification has similarly been revised for some companies that are part of international groups, if these companies were previously classified as SMEs due to the small scale of operations in Finland.

Because Hansel’s customers often have large procurement volumes, it can sometimes be difficult for small companies to meet the order volume. Use of subcontractors to accommodate part of procurement is permitted in Hansel’s tendering processes. This gives SMEs a better opportunity to take part in central procurement.

Hansel also permits participation by groupings formed by companies. Consortia find it easier to meet large order volumes, which improves SMEs’ chances of becoming government contract suppliers.

Procurement through SMEs based on framework agreements has decreased in recent years. One of the contributing factors to this decrease is the Electricity framework agreement, which became the company’s largest agreement (calculated in euros) in 2011, when the government decided to centralise its electricity procurement through Hansel. The electricity contract supplier is not an SME.

It should be noted that there are some areas, such as scheduled flights and leasing services, where there are no SMEs. Furthermore, there are some agreements that require nation-wide coverage, such as the framework agreements for data and voice communications.

Split procurement

Framework agreements are based on the Act on Public Contracts. Suppliers for framework agreements are selected in a competitive tendering process, which may be arranged regionally. Generally, tendering processes are organised in accordance with an EU-wide open procedure.

Customers often use a simplified tendering process for procurements within the framework agreement. These simplified processes are only open to suppliers selected for the framework agreement. A simplified tendering process for occupational health services or printing services, for instance, is therefore only open to selected suppliers from the geographic area in question, or for a specific product group.

The method employed in the tendering process is always considered on a case-by-case basis, in order to meet market functionality requirements and customer needs. When possible, procurement is split into smaller units to facilitate SME participation. SMEs are allowed to team up to improve their chances in tendering processes.

However, tendering processes may not exclusively target SMEs; instead, the winner is always the tenderer or tenderers offering the most economically advantageous tender, regardless of the size of the company they represent. A regional tendering process is arranged for approximately 10 per cent of Hansel’s framework agreements.

To take regional aspects into account, the framework agreement for Occupational Health Care services is divided into more than 60 geographical areas, with the objective of supporting the availability of local health care services. 25 contract suppliers were selected to provide occupational health care services under the framework agreement.

Regional aspects were also incorporated in the Domestic Accommodation and Conference Services framework agreement, which was divided into approximately 70 regions in order to respond to the customers’ accommodation needs in the best possible way. Approximately 90 contract suppliers were selected to provide accommodation and conference services.

The framework agreement for computers assigns nationwide responsibility for computer servicing and maintenance to contract suppliers. In practice, services are provided through an extensive subcontractor network, offering customers access to nearly 140 service points.

Revision to public procurement law

The new Public Procurement Directives prepared by the European Union were approved in February 2014. Hansel’s experts have been actively involved in the preparatory work for a national legislation reform carried out after the Procurement Directives were approved.

They took part in the work carried out by project steering and preparation groups, and in that performed by the secretariat. The Finnish Government plans to submit a Government proposal on the matter to the Parliament in 2015, and the new Act on Public Contracts is scheduled to enter into force in April 2016.

This reform involves an overall revision of the procurement legislation. For Hansel, the most significant changes include reforms of the procurement procedures and the tendering process in practice, electronic procurement procedures and the status of central procurement units, and more detailed provisions regarding framework agreements.

Following the legislative reform, more attention will be paid to environmental and social considerations, innovation, and the position of SMEs.

2Number of personnel under 250, with maximum net sales of €50 million or maximum balance sheet total of €43 million. Companies must also fulfil the ‘independence criterion’, which means that no large companies own more than 25% of the SME in question.