Business opportunities in the sector through tenders

What are tender opportunities?

In the plastics sector, tenders are processes of interest for a number of companies from various points of view: as a product supplier, as a service provider, as an innovation provider.

Public tenders

It is the legal-administrative procedure by which a public body requires works, supplies, or services delivered by individuals or companies. In this case, companies from the plastics sector are potential suppliers of the Administration for a wide range of supplies in the form of products, that will have to comply with a few technical requirements detailed in the tender documents.

In order to verify compliance with the technical requirements, companies must apply the standards specified in the tender documents. These standards define the testing methods that must be followed in order to verify compliance with the technical requirements, or in some circumstances also indicate the specifications that the supplies must meet.

The application of standards to verify compliance with requirements is carried out by a quality assessment body (QAB), such as AIMPLAS, which also has an accreditation granted by an official body according to standard UNE-EN ISO/IEC 17025. In Spain, the accreditation body is ENAC, which is therefore in charge of verifying that the QAB comply with the quality system requirements based on standard UNE-EN ISO/IEC 17025.

Spanish Law 9/2017 of Public Procurement promotes the use of technical standards to define the specific technical prescriptions in the tender documents. In short, the good use of standards in tender documents provides objectivity, transparency, and openness, simplifying the composition of technical aspects.

Despite the growing relevance of standards in commerce and legislation, there are still few tender documents that cite technical standards. The surveys carried out show that the main barrier is the lack of general knowledge on the topic and the difficulty in identifying the applicable standards.

As previously stated, QABs such as AIMPLAS collaborate with companies that opt for a tender in order to demonstrate compliance with the requirements of the tender documents and thus increase their guarantees of success, but they can also collaborate with different Administrations in order to verify compliance with the technical requirements.

Public Procurement of Innovation (PPI)

In addition to supplies, companies can be innovation providers by means of Public Procurement of Innovation (PPI).

What is Public Procurement of Innovation?

Public Procurement of Innovation (PPI) is the process through which Administrations buy R&D and Innovation from economic operators. In this process Administration is driven to carry out an intelligent purchase, obtaining the best solutions through the advantages of R&D and Innovation, at the same time encouraging business fabric innovation through active rather than reactive listening and consultation.

PPI, in summary, serves to support the innovative activity of the private sector in order to satisfy the needs of a public body. In this way, it is the demand of the public sector that conducts innovative activity, instead of being obliged to adapt to the products or services developed by the private sector.

While PPI can help encouraged market capture of innovative products and services, at the same time it improves the quality of public services. This innovation also implies scientific and technological advances as a result of PPI.

Through the search for more innovative contracting solutions, profits are obtained for the Public Administrations, for the private sector, and for the general citizens. It is, therefore, possible for the company to generate profits while the Public Administration improves public service.

Three kinds of PPI

1. Pre-Commercial Procurement (PCP): it is a contracting procedure for research and development services. Companies and the public buyer share the risks and profits of the research needed to develop innovative solutions that improve those that currently exist on the market. PCP includes the exploration and design of solutions, the creation of prototypes, the development of a limited volume of first products or pilots… PCP is organised by elimination phases with different economic operators that compete among themselves. Thus, they can improve the solutions proposed by the public purchasers, avoiding dependency on a single supplier. At the end of the phases, the final product cannot be purchased and must be re-tendered.
2. Public Procurement of Technological Innovation (PPTI): it is the public purchase of a work, good, or service that already exists at the moment of tender, but only as a prototype or requiring the development of new or improved technology and that can be developed in a reasonable timeframe.
3. Association for Innovation (AI): their objective is to contract the whole innovation process, from the research to the commercial exploitation and purchase of the new product or service. One or multiple economic operators can participate in each stage.

International tenders

International tenders offer companies an alternative view of the internationalisation that must be considered in addition to direct commerce. There are different types of organisation entities for international tenders:

• Multilateral financial institutions (banks): international institutions participated by governments of different countries whose main activities strive to encourage development and help in developing countries. They give loans to developing countries and supervise the management of the funds intended for projects. Among these are World Bank, Interamerican Bank of Development, African Bank of Development, Asian Bank of Development, Andean Development Corporation (CAF), Caribbean Bank, European Bank of Reconstruction, etc.
• Multilateral Organizations: international institutions that have representation of different countries. They do not give out loans, but they finance projects in developing countries by means of donations from member countries. Among these are the European Union (EU) and the United Nations (UN).
• Bilateral Agencies: they organise interactions between two specific countries in order to carry out development aid projects. In Spain it is AECID, and others are USAid, AusAid, GTZ, etc.
• Governments of other countries: they carry out purchases by means of international tender called by agencies of a country (Municipality, Governing body, Ministry, Army, Police, etc.).

Private company tenders

Private company tenders can be carried out through the so-called Request for Proposal, which is the document that a company, acting as a client, presents to one or more potential suppliers asking for a formal proposal in order to supply good or services on the basis of some established specifications of the request. The specifications include aspects such as prices and payment conditions, product or service characteristics that are required, ordered quantities, time and place of delivery, conveyance, packaging, procurement materials, and other technical requirements. In this type of request, it is also common to ask for technical assistance and maintenance services.

In summary, companies from the plastics sector have a wide range of business options through tenders, which could be of products or of innovation, national or international, public or private, but in any case, it is important to consider this business route in order to achieve larger growth.

Eva Bejarano

Tenders and Standardisation Leader