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The Future of EU Public Procurement


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Tired of complaining about EU rules and procedures, buyers and sellers have been given their say on the future of public procurement within the European Union.

In this article we look some of the changes demanded by the grassroots and the clear calls for increased simplification of procurement rules.

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The Future of EU Public Procurement

  1. 1. The Public Has It’s Say On:The Future Of EU Public ProcurementTired of complaining about EU rules and procedures, buyers and sellers havebeen given their say on the future of public procurement within theEuropean Union. In this article we look some of the changes demanded bythe grassroots and the clear calls for increased simplification of procurementrules.A review of public procurement in the EU began in early 2011 with the publication of GreenPaper titled Towards a more efficient European Procurement Market.The green paper set out proposals or more accurately issues for discussion under a total of 24different headings – from the modernisation of procedures to the promotion of innovationthrough procurement. It was an elaborate questionnaire posing a total of 120 questions aboutpublic procurement in the future.The irony of a process of simplifying EU procurement starting with what was effectively aquestionnaire of 120 questions – was not lost on many! However the questions were straight-forward and to the point, as the following example shows: 2011 1|P a g e
  2. 2. 17. Do you think that the procedures and tools provided by the Directive to address specific needs and to facilitate private participation in public investment through public-private partnerships (e.g. dynamic purchasing system, competitive dialogue, electronic auctions, design contests) should be maintained in their current form, modified (if so, how) or abolished?Public Procurement - Europe Is ListeningFast forward a number of months and the EU had received just over 600 responses from publicorganisations, member state governments, industry associations and even private citizens.Those sellers and their industry associations who availed of this one in 50 year opportunity toinput to Europe’s policies on public procurement accounted for approx. 40% of all responsesreceived.These responses will shape the new regulations due before the end of 2011, so reviewing theresults is likely to provide a good indication of the changes that are likely to be made.A Call For Greater Simplification1. There is widespread support for greater flexibility and simplification of EU procurementrules. One clear expression of this is support for the generalisation of the negotiatedprocedure. It was favoured as a primary means of affording greater flexibility and reducing theadministrative burden placed on buyers.2. Most believe that procurement procedures are too formalised and do not allow contractingauthorities to obtain the best possible procurement outcomes. This results in calls for moreflexibility in the conduct of the procedure, such as possibility to contact participants in a flexiblemanner to clarify open issues or to discuss elements of the offer.3. There is clear support for the general acceptance of the negotiated procedure. Generalizingthe negotiated procedure – this was favoured as a primary means of affording greater flexibilityand reducing the administrative burden placed on buyers. 2011 2|P a g e
  3. 3. 4. Other flexibility measures that receive broad market support, include: • A stronger focus on aspects of quality and sustainability as award criteria. • A generalised use of qualification systems that are currently only provided under the Utilities Directive • The introduction of specific procedures for innovative procurement, such as forward commitment contracts or long-term partnering with innovative undertakings. • A more generalised use of the accelerated procedure.5. There is strong support for simplifying evidence for the qualification of bidders – this forexample could mean that certificates and other evidence would only be required from thewinning bidder. It would certainly cut the cost and bureaucracy associated with prequalifyingbidders.6. The repeal of the rigid separation of selection and award phases is something that mostrespondents are in favour of. That includes the view that it would be justified in exceptionalcases to allow contracting authorities to consider supplier capability and suitability criteria inthe award phase. This is particularly true for consultancy or social services, where theproviders professional experience and qualification really matter.7. Most believe that contracting authoritiesshould be able to consider previousexperience or track record with bidders – The Top Changes Supported By Sellers:opening up the potential for certain 1. The simplification of evidence for qualificationsuppliers to be black-listed based on poor of bidderspast performance. 2. Promote innovation 3. Cross border joint procurement 4. More negotiation8. Three quarters of buyers who responded 5. Clarify rules on substantial modificationscalled for increased thresholds. However,the commission makes it clear that itsobligations to international treaties make The Top Changes Supported By Buyersthis impossible. 1. More negotiation 2. Specific solutions for cross border joint procurement 3. Simplify evidence for pre-qualified bidders 4. Increase thresholds 5. Promote innovation 2011 3|P a g e
  4. 4. 9. There is support for clarifying the position on amendments to contracts duringimplementation (including termination) and simplified procedures were amended contractsneed to be re-advertised. However the EU has not been given free rein in this area, with littlesupport for changes regarding contractor changes, or contract execution (e.g. executionguarantees delivery conditions, delays, payment, etc.). The regulation of sub-contracting isfavoured by buyers, but not other groups.10. As regards measures to improve SME access to public tenders stakeholders opinions aredivided. Such measures include:• Mandatory splitting of contracts into lots• Turnover caps• Quotas/targets for SME awards• Mandating a second language in respect of tenders11. There is clear support however for better recognition of certificates across borders,although not for a European-wide prequalification system.12. An overall majority rejected the introduction of secondary (and thereby more arbitrary)procurement criterion. Businesses in particular were in favour of maintaining the link with thesubject matter believing that it was essential to fair competition and best value for money.13. This reflects the division regarding the strategic use of public procurement in support ofother goals, such as the environment, or innovation. For instance, a majority of business andcontracting authorities believe that the current rules on technical specifications make sufficientallowance for the introduction of considerations related to societal policy objectives, whereas avery clear majority of civil society organisations consider them to be insufficient.14. There was widespread support for more innovative procurement, such as; • Competitive dialogue, design contest and in particular the negotiated procedure • Greater acceptance of variants and performance requirements in technical specifications • The possibility of reacting to unsolicited proposals and pre-commercial arrangements. 2011 4|P a g e
  5. 5. 15. Further intervention by the EU to prevent against the risk of corruption, with the exceptionof conflicts of interest, exclusion grounds and debarment.16. There was support for simplification of many other aspects of public procurement,including; Part A and B services, social services and the simplification of works contracts.© ASGgroup 2011Terms & Conditions ApplyFor more information visit: (0)1 6205787Unit 24 Park West Enterprise Centre, Park West, Dublin 12. 2011 5|P a g e