Thursday 30 June, F8 - Cutting through EU procurement tape, Sara Piller, European Commission


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As spending pressures continue, councils are working more innovatively to find efficiencies. However buying and sharing goods and services and working as a ‘super council’ is not as straightforward as it should be. All of this is guided by current EU rules, which can be inconsistent and confusing, making it more difficult for councils to deliver value for money procurement.
We have been voicing these local concerns to EU decision makers in Whitehall and Brussels, and they are listening. A wholesale review takes place in 2011/2012. This session will:
Evidence why these rules matter to councils
Present the LG Group vision for the EU procurement review
Hear from those reforming the EU rules in Brussels and Whitehall.
Come and join the debate, and have your say…find out what we are saying and how you can help influence EU policy makers in Whitehall, Westminster and Brussels.
Sara Piller, Deputy Head of Unit, Public Procurement Policy Directorate, European Commission
Nigel Kletz, Head of Procurement and Assistant Director, Birmingham City Council
Matthew Wynn, Efficiency and Reform Group, Cabinet Office

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Thursday 30 June, F8 - Cutting through EU procurement tape, Sara Piller, European Commission

  1. 1. Evaluation of public procurement Directives DG Internal Market UK LGA Annual Conference Thursday 30 June 2011
  2. 2. Average person days for procedure Pwc, London Economics, Ecorys from OJEU data 2006-2010
  3. 3. Person-days required PwC, London Economics, Ecorys 71 93 22 Authorities and winning firm combined 33 43 10 Firm 57 68 11 Authorities Difference Worst performer Best performer
  4. 4. Total cost of procedures <ul><li>Average cost per procedure €28 000 </li></ul><ul><li>€22 500 - cost of average 5 – 6 bids </li></ul><ul><li>€ 5 500 contracting authority costs </li></ul><ul><li>Total Costs €5.3 billion </li></ul><ul><li>Less than 1.3% of total contract value </li></ul>
  5. 5. Savings <ul><li>Econometric model </li></ul><ul><li>Save 1% on the final contract value if contract notice advertised </li></ul><ul><li>further 3 % if open procedure or 1.1 % if restricted procedure </li></ul><ul><li>Total 2.1 - 4 per cent compared with the initial estimate. </li></ul>PwC, London Economics, Ecorys
  6. 6. SME access and success GHK
  7. 7. Cross border procurement Ramboll as % of total (above threshold) procurement
  8. 8. Cross border participation Ramboll How often did your company participate in public procurement tenders (domestically and abroad) in the last three years? 76,1 10,9 6 7 0 6,4 5,3 4,9 11,1 72,3 0 10 20 30 40 50 60 70 80 90 100 more than 20 times 10 to 20 5 to 10 1 to 5 Never % of respondents Participation abroad N=1011 Participation overall (domestically and abroad) N=1026
  9. 9. Reasons for not bidding cross border Ramboll
  10. 10. Evaluation: overall conclusion <ul><li>Savings outweigh costs </li></ul><ul><li>Scope for improving balance of costs and benefits particularly for small contracts </li></ul><ul><li>Potential for more cross border procurement </li></ul>
  11. 11. Timetable <ul><li>End June: Publish evaluation results & synthesis of replies to January 2011 Green Paper </li></ul><ul><li>30 June: Conference on the Modernisation of EU Public Procurement Policy </li></ul><ul><li>End 2011: Present legislative proposals </li></ul>
  12. 12. Total public expenditure Eurostat and Commission estimates As % EU GDP (2008)
  13. 13. Use of procedures Pwc, London Economics, Ecorys from OJEU data 2006-2010
  14. 14. Frequency of contract values PwC, London Economics, Ecorys N Cumulative € Cumulative 80% 50% 20% 0 400 800 0 500 1000 1500 2000 2500 3000 Number of purchases Value of purchase ('000)
  15. 15. Evaluation: main findings <ul><li>Effectiveness </li></ul><ul><li>Relevance </li></ul><ul><li>Efficiency </li></ul><ul><li>Consistency with other policies </li></ul><ul><li>EU added value </li></ul>
  16. 16. Effectiveness <ul><li>Transparency </li></ul><ul><li>Competition </li></ul><ul><li>Savings </li></ul><ul><li>Cross border </li></ul><ul><li>Differences in implementation </li></ul>
  17. 17. Relevance <ul><li>Value for money </li></ul><ul><li>CPB’s and Frameworks </li></ul><ul><li>Equal treatment </li></ul><ul><li>Non discrimination </li></ul>
  18. 18. Efficiency <ul><li>Positive cost benefit analysis </li></ul><ul><li>Compliance costs </li></ul><ul><li>Difference across MS </li></ul><ul><li>Unintended consequences </li></ul>
  19. 19. Consistency with other Policies <ul><li>Green public procurement </li></ul><ul><li>Socially responsible </li></ul><ul><li>Innovation </li></ul><ul><li>Lack of monitoring </li></ul><ul><li>Different requirements, standards, labels… </li></ul>
  20. 20. EU Added Value <ul><li>Single Market </li></ul><ul><li>Coordination </li></ul><ul><li>Still large differences in implementation </li></ul>