European Union: Commission Consults On Modernisation Of EU Public Procurement Policy

Last Updated: 10 February 2011
Article by Siobhan Costello

The European Commission has published a Green Paper on the modernisation of EU public procurement policy. Public procurement law was developed to ensure the most efficient use of public funds and to keep the EU procurement markets open.  In light of the current economic climate the Commission considers there is a need to modernise the existing procurement rules.

The aims of the modernisation are:

  • to increase the efficiency of public spending by ensuring the best possible procurement outcomes and the widest possible competition for contracts;
  • to allow procurers to make better use of public procurement in support of common societal goals, including protection of the environment, energy efficiency; and
  • to tackle issues that are not sufficiently addressed in the current rules, such as preventing corruption and favouritism.

The Green Paper does not contain any policy decisions by the Commission, but asks many questions on a wide range of issues including, whether the Part A/B services distinction should be narrowed or eliminated, whether the thresholds should be increased, whether there should be more negotiation in procurement processes, whether the exclusive rights exemption should be narrowed, and whether some utility sectors should still have their own separate regime.  The consultation will close on 18 April 2011. 

To view the article in full, please see below:

Full Article

Part A & B services

Under the existing procurement rules, there is a distinction between Part A services and Part B services. While Part A services are subject to the full rigours of the rules, Part B services and do not require to be advertised in the Official Journal of the EU (OJEU). The rationale behind this was the presumption that Part B services were almost exclusively domestic in nature. The Commission now doubts whether that is still the case. It considers services such as water transport services, hotel services and personnel placement and questions whether they in fact do represent a lesser cross-border interest than Part A services.

The Commission acknowledges that the distinction between Part A and Part B services is a source of difficulty and can lead to errors in the application of the rules. It concludes that the simplest solution would be to eliminate the distinction between Part A and Part B services altogether, but given the importance of such a change the Commission will await the responses to the consultation to see whether that indicates a desire to simplify the existing regime.


Some stakeholders consider that the thresholds under the current rules are too low and that they should be raised. The Commission notes, however, that increasing the thresholds would exempt more contracts from the requirements of publishing an OJEU notice, reducing business opportunities for undertakings throughout Europe.

Exclusive rights

The existing rules permit the use of the negotiated procedure without prior publication in cases where "for reasons connected with the protection of exclusive rights, the contract may be awarded only to a particular economic operator", in other words there is non-existent competition so advertisement would be pointless. The Commission has voiced concerns that granting exclusive rights jeopardises fair competition in procurement markets. It is therefore considering whether the rules should only allow contracts to be awarded without a competitive procedure on the basis of exclusive rights if there has been a transparent, competitive procedure at the stage of the award of the exclusive right.

More negotiation

The Commission is considering whether more negotiation should be allowed in public procurement, for example by allowing the negotiated procedure with prior publication to be used more generally.

Some stakeholders argue that more negotiation would be appropriate for smaller contracts, whilst others say that it would be useful for tendering large-scale projects, particularly public-private partnerships. The Commission asks consultees to comment on whether they would be in favour of allowing more negotiation and/or generalizing the use of the competitive negotiated procedure. The Commission will carefully consider the results of the consultation before making any changes.

Public utilities

Activities in the sectors covered by the Utilities Directive are carried out by public authorities and commercial companies (often private) operating on the basis of special and exclusive rights. More and more private entities are also obtaining the right to operate utilities even whether they do not have special or exclusive rights. The Commission asks whether it is still relevant that a private entity has special or exclusive rights, or whether other criteria should be used.

Whilst there has been a degree of sectoral liberalisation, some utility companies still have very high market shares. Furthermore, under Article 30 of the Utilities Directive, certain procurements can be excluded from the scope of the Directive where the level of competition is such that competitive pressure will ensure the necessary transparency and non-discrimination in procurement by utilities.

The Commission asks whether there is still a need for procurement rules covering utilities sectors and, if so, whether certain sectors should be excluded. It is also consulting on whether the Article 30 procedure is effective in adapting the scope of the Utilities Directive to changing patterns of regulation and competition.

Selection and award

Under the current procurement rules, there is a sharp distinction between pre-selection and award. During the selection stage, bidders can only be excluded on the basis of economic and financial standing, professional and technical knowledge and ability. At the award stage, the winner is chosen on the basis of objective criteria related to the quality of the products and services proposed. Considerations linked to the tenderer's ability to perform the contract, such as his experience, manpower, equipment cannot be taken into account at the award stage.

Contracting authorities often argue that this distinction increases the administrative burden. The Commission therefore considers that there might be an argument for reconsidering the organisation and the sequence of the examination of selection and award criteria within the procedural framework. It is seeking views on whether it may be possible, or practical, to examine the award criteria before the selection criteria.

The Commission is also examining whether there may be grounds for the more fundamental change, allowing contracting authorities to take into account pre-qualification bidder-related criteria (for example experience and qualification) as award criteria.

Administrative burdens in the selection phase

The Commission acknowledges that there is a high administrative burden on SMEs in the selection phase. A large number of certificates are required at the selection phase.

The Commission is therefore considering whether to allow undertakings to submit only a summary of the relevant information for selection and/or provide self-declarations on the fulfilment of the selection criteria as a first step. Only the successful tenderer(s) admitted to the award phase would then be asked to submit certificates.

Link to the subject matter of the contract

Under the existing rules, requirements/award criteria must be linked to the subject-matter of the contract. This link ensures that the purchase itself remains central to the process and not other policy conditions. Some stakeholders advocate more flexibility here and suggest softening or even dropping the condition that requirements imposed by the contracting authority must be linked to the subject matter of the contract. Relaxation of this requirement might enable authorities to go further in pursuing Europe 2020 policy objectives through public procurement. It would allow authorities to influence the beahviour of companies in light of these policy objectives e.g. to encourage more environmental responsibility.

The Commission asks whether criteria not linked to the subject matter of the contract, in the sense that contracts could be awarded on the basis other than economic criteria, could give rise to a State aid concern. The Commission also asks whether public procurement legislation should allow contracting authorities to impose contract execution clauses that are not strictly linked to the provision of the goods and services in question (e.g. requiring the contractor to put in place child care services, or allocate a certain amount of remuneration to social projects).

Protection of IP in a competitive dialogue

The Commission notes that there is a concern in competitive dialogue procedures with the "cherry picking" of IP rights or innovative solutions. If a participant discloses unique features of its solutions these may become known to other candidates. The authority finds itself in a bind between protecting confidential information and the need to disclose some information in order to get the solution that best fits its needs. The Commission asks whether the competitive dialogue procedure allows sufficient protection of IP rights and innovative ideas.

Incumbent advantage

The Commission recognises the natural advantages of incumbent bidders and asks whether the advantages of tenderers (because of their prior association with the project or otherwise) is a subject that should be addressed at EU level.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 08/02/2011.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.