Czech Business Today

On average only 7 out of 833 applicants (from 49 countries) for contract framework tenders within the European development aid are Czechs. What is behind the low participation of Czech companies in the EU development aid and EU tendering? On 30th June, CEBRE discussed the issue of EU tendering and granting with Czech companies, territorial directors of Czech export agency CzechTrade and Czech economic counsellors. 

The main reasons for low participation are: complexity, late payments and bureaucracy. 

First, there is a lack of knowledge about these instruments, despite many raising awareness campaigns and information sources. 

Second, there is some scepticism about the use of EU money. One Czech entrepreneur, owner of an ICT company, has experience with EU tendering. His company was granted around 20 tenders in candidate and potential candidate countries. He states that the period of payment by the Commission was 45 days, not 30 days as he expected. Moreover, the 45-day period was often not respected. 

In the Czech Republic, the beginning of the payment period is commonly assumed as the issue date of the invoice. The EU institutions count the time from the date the invoice is recorded in their system and accepted in accordance with the “complete delivery” (a process called provisional acceptance). When suppliers deliver goods/services, they have to ask for this provisional acceptance. Therefore, the payment period starts only when an EU project manager signs this acceptance. But there is no due period for the project manager to sign the provisional acceptance. The company has no guarantee the project manager will do it quickly. 

There is also another problem. According to Czech law, the due sum has to be received in the account of the creditor by the date of payment. However, according to the EC rules, it is sufficient that the money was sent (not received) on the respective day of payment. Besides that, the company must cope with many obstructions (such as standardised labels) and paperwork. 

The EU tenders, either in the EU development aid or pre-accession stage, offer to EU companies an opportunity to make first steps in the third countries. But do they really help them?