Microenterprises: how they interact with public procurement processes

Purpose – The aim of this paper is to explore how micro‐enterprises interact with public procurement systems. The paper seeks to give public procurement managers a better understanding of how micro‐enterprises approach the procurement process. Design/methodology/approach – The sample consists of microenterprises competing for public procurement contracts in Ireland. The data are firstly submitted to principal component analysis to identify a set of factors that represent the public procurement process. This is later used to create four distinct clusters which describe how suppliers interact with the process. Findings – A typology of four interaction patterns is generated from the data. This shows that small firms weight the three phases of the procurement process differently. The data support and extend the argument that small firms are not a homogeneous group and illustrate that small firms use divergent strategies when competing for procurement contracts. Research limitations/implications – The practical implications of the research include the need to assess the potential for buyer‐supplier mentoring in order to develop relational competency in public procurement. The firms investigated are domiciled in Ireland and therefore generalisability of the findings may be limited. The scope of the study is restricted to micro‐enterprises only. Originality/value – The paper demonstrates that pre‐tender engagement is a necessary condition for small suppliers to achieve above average bid outcomes. The paper offers insights to public buyers, teams and managers as to the importance of engaging with suppliers to achieve mutually beneficial outcomes.