This document discusses extending the scope of EU public procurement law to include the pre-procurement phase of decision making. Currently, EU procurement law only regulates the procurement phase and post-procurement phase, leaving discretion to member states over the pre-procurement phase. The document argues that decisions regarding whether to in-house or externalize public service delivery should be based on objective and transparent criteria. It examines arguments from sectors in the Netherlands and compares the Dutch Public Procurement Act and a US law that regulate aspects of pre-procurement decision making.

1. Extending the scope of EU
public procurement law
Willem A. Janssen
IPPC6 - 2014

2. Thesis and outline
Decision-making in the pre-procurement phase relating
to (public) service delivery should be based on
objective and transparent criteria.
1. Pre-procurement phase
2. Present regulation
3. General arguments
4. Sectorial arguments
5. Towards objectivity and transparency
6. Two examples

3. The scope of EU public procurement law
Procurement phase Post-procurement phasePre-procurement phase
EU public procurement law
Defining demand
Decision on
performance
modalities:
• In-house or
• externalise?
National law
Market
research
Choice of
procedure
Procurement procedure:
•2004/18 – 2004/17
•New directives
Selection of contractor
National law
Contract performance
and management
Evaluation

4. Present: pre-procurement phase (1)
• Democratic decision-making on (public) service delivery
• Fundamental choice: state, market, or society itself?
– Defining the public interest/task
• Contracting authorities have discretionary power to decide upon
public service delivery.
– Protocol 26. and 106(2) TFEU

5. Present: pre-procurement phase (2)
• “It should be recalled that nothing in this Directive obliges Member
States to contract out or externalise the provision of services that
they wish to provide themselves or to organise by means other than
public contracts within the meaning of this Directive.” (preamble 5,
Directive 2014/24/EU)
• Art. 12 Classic public procurement directive
• EU law only accommodates performance choices, but leaves MS /
public authorities to decide who should perform services.

6. General arguments
• EU: “Market fatigue”
• Financial and debt crisis
• Loss of confidence in market performance
• Art. 4(2) Lisbon Treaty
• NL: Emphasis on a “compact” government
• Increase of in-house performance
• Valued principles and goals only apply when fundamental decision
is made: inconsistency
• Broader applicability on legal instruments and entities

7. Dutch sectorial arguments
In-house performance:
• Waste sector
• Supportive services
Inconsistent tendering policy:
• Public transport
• Social support

8. Towards objectifying the pre-
procurement phase
• Key factors:
– Objective and transparent criteria should decide upon who is the
best performer of a public service.
• Questions to address:
– What level of regulation?
– What kind of enforcement?
– What field of law?

9. Dutch Public Procurement Act 2012
• Article 1.4 PPA 2012:
– Obliges contracting authorities to create ‘societal value’
– Contracting authorities must base two decisions on ‘objective
criteria’:
• Choice of procedure
• Choice of invitees
– Duty to motivation
• Leading the way?

10. Comparative view: US FAIR Act
• Obligation to compose an annual list of services
• OMB Circular A-76: comparison between alternatives
• Challenge and appeal procedures
• Combination of regulation and judicial enforcement

11. Conclusion
Willem A. Janssen LL.M.
Lecturer and PhD Candidate
Europe Institute - Utrecht University
w.a.janssen@uu.nl
Decision-making in the pre-procurement phase relating to public service
delivery should be based on objective and transparent criteria.
Questions?