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ERA annual public procurement conference 2016

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Presentation given on 14 April 2016 at the "ERA annual public procurement conference 2016", covering issues of procurement centralisation and public registers of public contracts

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ERA annual public procurement conference 2016

  1. 1. Centralised purchasing bodies and public contracts registers: function in practice, benefits and competition concerns Dr Albert Sanchez-Graells ERA Annual Conference on European Public Procurement Law 2016, Trier, 14-15 April 2016 14 April 2016 1ERA Annual European Public Procurement Conf 2016
  2. 2. Agenda • Provide an overview of developments on centralised and joint procurement: the push for collaborative procurement • Provide background discussion on future developments on contracts registers • Assess competition implications of both developments of EU public procurement law ERA Annual European Public Procurement Conf 2016 2 14 April 2016
  3. 3. Centralisation of public procurement • An exploding trend in public procurement? • European Commission (DG Grow), Indicators on public procurement performance in the MS (2016) • Indicator [3]: Aggregation; this indicator shows how often public buyers buy together. … Aggregation measures the proportion of procedures with more than one public buyer [http://ec.europa.eu/internal_market/scoreboard/performance_per_policy_area/public_procurement/index_en.htm] ERA Annual European Public Procurement Conf 2016 3 14 April 2016 [3] Aggregation 10% or more Less than 10%
  4. 4. Centralisation of public procurement ERA Annual European Public Procurement Conf 2016 4 14 April 2016
  5. 5. What is the Commission working on? • Public Procurement Strategy • Facilitating the aggregation of demand • ‘intends to support the dissemination of good practice and promote the use of innovative procurement by CPBs and other forms of aggregation of demand’ [http://ec.europa.eu/growth/single-market/public-procurement/strategy/index_en.htm] • Work-in-progress on an Action Plan on cooperative procurement (not officially adopted) ERA Annual European Public Procurement Conf 2016 5 14 April 2016
  6. 6. Discussion of the new rules in Arts 37 – 39 of Directive 2014/24 • Centralised procurement [Art 37, Art 39] • Clear emergence of two models of CPB + leeway for Member States to reject (one but not both) • Joint procurement [Art 38] • Relationship with Art 12 of Directive 2014/24 (public-public cooperation and in-house provision) • Cross-border procurement [Art 39] ERA Annual European Public Procurement Conf 2016 6 14 April 2016
  7. 7. A legal utopia or a practical dystopia? ERA Annual European Public Procurement Conf 2016 7 14 April 2016 CPB1 MSA CPB2 MSB CA1 MSA CA2 MSA CA3 MSB CA4 MSB Sup1 MSA Sup3 MSC Sup2 MSB (R3) FWA (R1) (R2) (R3) (R4) (R4) Member State A Member State BMS C
  8. 8. What economic implications derive from centralised public procurement? • Unclear net effects (more actual efficiency?) • Distribution of public funds/rents (financing CPBs through kick-backs still to be identified as an issue, but potentially problematic) • Better service for contracting authorities? • A Frankenstein waiting to wake up? ERA Annual European Public Procurement Conf 2016 8 14 April 2016
  9. 9. What implications from a competition law and State aid perspective? • Subjection of CPBs to competition (likely?) • FENIN, C-205/03 P, EU:C:2006:453 • ’there is no need to dissociate the activity of purchasing goods from the subsequent use to which they are put’ • EasyPay, C-185/14, EU:C:2015:716 • ’in order to avoid classification as an economic activity, that activity must, by its nature, its aim and the rules to which it is subject, be inseparably connected with …’ ERA Annual European Public Procurement Conf 2016 9 14 April 2016
  10. 10. What implications from a competition law and State aid perspective? • Difficulty justifying reservation of activity + funding given to CPBs, if indirectly, State aid? • Can this be an SGEI? • What standard applies? • Altmark Trans, C-280/00, EU:C:2003:415 • Spezzino, C-113/13, EU:C:2014:2440 • Germany v Commission (Zweckverband Tierkörperbeseitigung), C-446/14 P, EU:C:2016:97 ERA Annual European Public Procurement Conf 2016 10 14 April 2016
  11. 11. ERA Annual European Public Procurement Conf 2016 11 14 April 2016
  12. 12. Public Contract Registers • The Commission has committed to full-fledged action in this area as part of the Oct 2015 Strategy for the Upgrading of the Single Market [COM(2015) 550 final] • Needs to be implemented by 2017-2018 • How is this different from transparency and reporting obligations under Art 84 of 2011 Proposal? ERA Annual European Public Procurement Conf 2016 12 14 April 2016
  13. 13. Public Contract Registers • Purpose • ‘to improve the transparency and quality of national procurement systems … by the establishment of contract registers covering the whole life cycle of contracts and by supporting the development and deployment of a data analytics and anomaly-detection tool to better uncover existing or prospective procurement irregularities’ ERA Annual European Public Procurement Conf 2016 13 14 April 2016
  14. 14. Some characteristics of existing central procurement registers in Member States • Fully accessible on-line, including copies of contracts and full conditions applicable to procurement • Some prevent payment of any invoices unless contract is published, including direct awards • Managed by CPB or CPB-connected entities ERA Annual European Public Procurement Conf 2016 14 14 April 2016
  15. 15. Are central procurement registers working? • Information is inputted in different ways, but generally there is significant divergence on the actual level of detail of information • So far, there are efforts to ensure its tractability as big data, but there are still difficulties ERA Annual European Public Procurement Conf 2016 15 14 April 2016
  16. 16. What are the competition law implications • Put simply, such central procurement registers are an invitation to cartellisation and generate excessive transparency • Most information is not necessary and, if it was disclosed through a private platform, would clearly be prosecuted by competition authorities ERA Annual European Public Procurement Conf 2016 16 14 April 2016
  17. 17. A tentative example – Portugal • National database of public contracts [http://www.base.gov.pt/Base/pt/Homepage] All contracts available in full Recently sanctioned a cartel in the School construction market (prefab modules for Schools) [see discussion in http://www.telles.eu/blog/2015/8/14/portuguese-competition- authority-fines-cartel-operating-in-public-procurement] ERA Annual European Public Procurement Conf 2016 17 14 April 2016
  18. 18. Coincidence? ERA Annual European Public Procurement Conf 2016 18 14 April 2016
  19. 19. What is the alternative? • Targeted disclosure • A system based on enabling or targeted transparency, whereby each stakeholder gets access to the information it needs for a specific purpose • Specific proposals to create granularity in disclosure rules is available at http://www.howtocrackanut.com/blog/2015/09/wh y-are-public-contracts-registers.html ERA Annual European Public Procurement Conf 2016 19 14 April 2016
  20. 20. Thank you for your attention Be in touch a.sanchez-graells@bristol.ac.uk http://howtocrackanut.com @asanchezgraells ERA Annual European Public Procurement Conf 2016 20 14 April 2016
  21. 21. Further reading – Centralisation • A Sanchez-Graells & I Herrera-Anchustegui, ‘Impact of Public Procurement Aggregation on Competition: Risks, Rationale and Justification for the Rules in Directive 2014/24’, in R Fernández Acevedo y P Valcárcel Fernández (eds), Centralización de compras públicas (Madrid, Civitas, 2016) 129-163. http://ssrn.com/abstract=2534496. • A Sanchez-Graells & I Herrera-Anchustegui, ‘Revisiting the Concept of Undertaking from a Public Procurement Law Perspective – A Discussion on EasyPay and Finance Engineering’ (2016) 37(3) European Competition Law Review 93-98, http://ssrn.com/abstract=2695742. • A Sanchez-Graells, Collaborative Cross-Border Procurement in the EU: Future or Utopia? (2016, work-in-progress) http://ssrn.com/abstract=2734123. ERA Annual European Public Procurement Conf 2016 21 14 April 2016
  22. 22. Further reading – CPBs and State aid • A Sanchez-Graells, 'The Commission’s Modernization Agenda for Procurement and SGEI', in E Szyszczak & J van de Gronden (eds), Financing Services of General Economic Interest: Reform and Modernization, Legal Issues of Services of General Interest Series (The Hague, TMC Asser Press / Springer, 2012) 161- 181, http://ssrn.com/abstract=2071655. • A Sanchez-Graells, ‘Competition and State Aid Implications of Spezzino (C-113/13): The Scope for Inconsistency in Assessing Support for Public Services Voluntary Organisations’ (2016) 11(1) European Procurement & Public Private Partnership Law Review 31-38, http://ssrn.com/abstract=2625166. ERA Annual European Public Procurement Conf 2016 22 14 April 2016
  23. 23. Further reading – Central Registries • A Sanchez-Graells, The Difficult Balance between Transparency and Competition in Public Procurement (2013) http://ssrn.com/abstract=2353005. • Anderson, Kovacic & Müller, Promoting Competition and Deterring Corruption in Public Procurement Markets: Synergies with Trade Liberalisation (2016), http://e15initiative.org/wp-content/uploads/2015/09/E15-Competition- Anderson-Muller-Kovacic-Final.pdf • A Sanchez-Graells, How to Crack a Nut Blog • Why are public contracts registers problematic? http://www.howtocrackanut.com/ blog/2015/09/why-are-public-contracts-registers.html • What level of transparency for call-off decisions within framework agreements? http://www.howtocrackanut.com/blog/2015/06/what-level-of-transparency-for.html ERA Annual European Public Procurement Conf 2016 23 14 April 2016

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