Imagine public procurement as a €2 trillion annual market, around 13–14% of EU GDP. That’s where opportunities live. Yet many SMEs win only a fraction of that value, despite accounting for the majority of businesses. It’s a mismatch worth exploring. 
In our conversations with entrepreneurs across Europe, a recurring frustration surfaced: “We know tenders exist, but we still can’t reach big wins.” Sure, SMEs often win in quantity, like 57% of Dutch contracts by count, but that translates to only 21–28% of the total value. That’s a significant gap.  
This article dives into why the gap exists—unpacking the structural, procedural, and perceptual barriers that hold SMEs back. More importantly, we’ll spotlight the shifts already shaping a more level playing field. Because when SMEs close just part of that gap, the impact on growth, innovation, and local economies is massive.
Let’s start by looking at how the numbers stack up and what they really reveal about opportunity in this space.
Where SMEs stand in European procurement today?
On paper, SMEs should be thriving in public procurement. They make up 99% of all businesses in the EU and account for around two-thirds of total employment. So why are they still capturing such a small share of the public sector’s spending power?
Let’s break it down.
According to the European Commission, SMEs win approximately 55–60% of public contracts by number, but often only around 30% or less by total value. In some countries, the disparity is even more striking. For example:
- In the Netherlands, SMEs win 57% of contracts, but only 28% of total contract value (PIANOo)
- In Germany, SMEs secure only 20–25% of contract value despite accounting for 99.5% of businesses (CEPR)
- Across the EU, targets to increase SME participation in procurement have been in place since 2008 — but progress has been uneven
These figures tell a clear story: SMEs may be participating more, but they’re not winning the higher-value tenders. And that’s not because they lack quality or capacity — it’s often because the system isn’t built with them in mind.
Next, we’ll unpack what’s behind this gap and why it persists, even in 2025.
Why the gap exists: 4 key barriers SMEs still face
Even as policies evolve to support SMEs, the structure of public procurement still creates friction, especially for smaller suppliers. Let’s look at the four biggest barriers that continue to limit SME success in tenders across Europe.
1. Compliance complexity
Tendering often involves a heavy administrative load: forms, declarations, certifications, technical specs, submission portals — and strict deadlines. For SMEs without a dedicated bid team, just understanding the process can be overwhelming. A 2023 OECD report found that over 60% of SMEs cite administrative complexity as a top barrier to accessing public tenders.
2. Limited internal capacity
Unlike large companies with in-house procurement or legal departments, SMEs often juggle tenders with day-to-day operations. This lack of bandwidth makes it hard to participate consistently, or to prepare competitive bids that meet every requirement.
3. Fragmented tender discovery
Even with EU-wide platforms like TED, many tenders are still scattered across local, regional, or sector-specific portals. SMEs without the time or tools to monitor multiple sources risk missing out on relevant opportunities, or finding them too late.
4. Perception bias and incumbent advantage
Public buyers, even unintentionally, often lean toward suppliers they know, or those who’ve worked with similar institutions. SMEs, especially new entrants, struggle to break through that barrier. A 2024 policy report from CEPR noted that SMEs were 30% less likely to be awarded contracts in sectors with high incumbent concentration (CEPR).
These barriers aren’t always visible on the surface, but they shape the tendering landscape in ways that disproportionately affect smaller businesses.
Next, let’s look at what’s finally starting to shift and where new opportunities are opening for SMEs.
5 structural shifts in favour of SMEs
While the challenges are real, so is the progress. Across the EU, procurement reform is gaining momentum, and many of these changes are designed with SMEs in mind. Here are five structural shifts that are actively improving SME access to public contracts.
1. Lot division is becoming the norm
Large tenders are increasingly being split into smaller “lots,” allowing SMEs to bid for specific parts of a contract rather than the entire project. This approach removes scale as a barrier, and creates real, winnable opportunities.
According to the European Commission, lot division is one of the most effective tools for boosting SME participation. It’s even encouraged under EU directives (EC procurement strategy).
2. Sustainability and social value are gaining weight
Contracts are no longer awarded on price alone. Evaluation criteria increasingly include environmental, social, and innovation factors — areas where SMEs often shine due to agility and local relevance.
3. Digital tools are reducing admin burden
Platforms like Tendify now help SMEs discover tenders faster, filter by relevance, and track deadlines automatically. Instead of checking 10+ portals, suppliers can focus on writing better bids — and responding only to the right opportunities.
4. Procurement policy is catching up
EU-wide initiatives like the SME Strategy for a Sustainable and Digital Europe explicitly target improved access to public procurement. Some countries are even setting SME participation quotas for public buyers.
5. Public buyers are becoming more SME-aware
Training, transparency initiatives, and cross-border cooperation are helping procurement officials design tenders that attract and fairly evaluate smaller suppliers. The old perception that SMEs are “too risky” is finally fading.
These changes won’t fix everything overnight, but they signal a clear direction: public procurement is becoming more accessible, more inclusive, and more competitive.
Next, we’ll look at what SMEs can start doing right now to take advantage of the shift.
What SMEs can do right now to close the gap
Knowing the landscape is shifting is one thing. But what can SMEs actually do to take advantage of the opportunities opening up?
Here’s where strategy meets action and small changes in approach can lead to major results:
- Prioritize relevance over volume - don’t try to respond to every tender. Focus on the ones that fit your strengths, capacity, and experience. This improves bid quality and your chance of winning.
- Use tools to stay ahead - the days of manually checking tender portals are over. Platforms like Tendify help you monitor opportunities across Europe and surface tenders tailored to your profile, saving time and avoiding irrelevant distractions.
- Invest in reusability and process - build a library of core documents and templates: financials, references, case studies, declarations. This reduces friction and helps you respond faster, especially when deadlines are tight.
- Understand evaluation criteria - winning isn’t about offering the lowest price. It’s about aligning your proposal with what the buyer values: quality, innovation, delivery, and increasingly, social and environmental impact.
- Engage earlier - many tenders start long before they’re published. If you can spot PINs, RFIs, or early-stage consultations, you get to understand buyer needs, and maybe even influence the tender itself.
Public procurement success isn’t just about being competitive — it’s about being ready. The more proactive you are, the smaller the gap becomes.
Let’s wrap up with a final word on where all this is heading.
The gap is real, but shrinking
SMEs aren’t losing tenders because they’re less capable. More often, they’re losing because the system was never built around their needs. Too complex. Too fragmented. Too dependent on resources only big players had access to.
But that’s changing.
Across Europe, the public procurement landscape is slowly becoming more open, more digital, and more balanced. From smarter policies and lot division to tools that reduce the workload, the barriers are starting to lower.
Still, opportunity doesn’t mean guaranteed success. It means the playing field is getting better. It’s up to SMEs to step onto it with the right mindset, tools, and strategy.
Because winning public contracts isn’t about being the biggest company in the room. It’s about being the best-prepared.
