European Union: Eversheds' Education Procurement Briefing - Much Change For Public Procurement?

Last Updated: 31 October 2011
Article by Ruth Connorton

European Commission publishes review of submissions to EU procurement law

Earlier this year the European Commission began an evaluation on the impact and effectiveness of EU public procurement legislation. Following a four month consultation with its stakeholders and subsequent evaluation they have published the results of this study along with a synthesis of the main views expressed by over 620 respondents to the Green Paper on modernisation of EU public procurement legislation.

This report, the "Evaluation Report: Impact and Effectiveness of EU Public Procurement Legislation" in combination with the Synthesis of Replies, finds that EU public procurement Directives have helped establish greater transparency and outcome-driven procurement within the EU. It emphasises that this has led to greater competition for public contracts and importantly driven costs down by around 4% creating savings of €20 billion. This, the report notes, is "far in excess" of the €5 billion costs that the procurement regime generates.

Despite this, the evaluation has revealed that there is still scope for much improvement. Emphasis is made towards striking a better balance between the costs of the procurement regime and subsequent benefits, particularly for lower value purchases. The report also notes that in some circumstances the costs of procurement regulation may be "disproportionate to the expected benefits" and that that some aspects of the regulation may even lead to market closure where long term or framework agreements are used.

There is therefore, among the responses to the consultation, a strong support for simplification of the process. Fostering innovation, improving flexibility and improving market access particularly for SMEs have all also emerged as priorities among the stakeholders.

  • Many respondents felt that the current regime imposes an excessive level of formality and would support the ability to discuss offers with participants in a tender exercise would be of benefit.
  • A large majority of stakeholders also considered that there should be provision made in the procedures explicitly allowing contracting authorities to take into account their experience, if any, with the bidders involved despite risks of favouritism and discrimination.
  • Many stakeholders see the procurement rules as too detailed and feel that procedures should give contracting authorities more leeway by permitting negotiations and less strict time limitations. This wish for flexibility extends to modification of a contract during its execution.
  • Most stakeholders felt that SME access to public contracts should be improved.
  • Any suggestion of replacing the current tripartite classification of contracts with a dual or even unified classification received little support.
  • There was little agreement about the possible re-classification between Part A and Part B services, though some support for review of the distinction. A mooted solution was removing category 27 "other services" from the Part B limited regime which would have the effect of making full application of the procurement Directive the automatic rule while retaining the limited Part B regime.
  • There was a majority of contracting authorities supporting an increase in the thresholds. This view was supported by the argument that contract awards with values just around the threshold tended not to attract interest from bidders from other member states in any event and that this imposed an unnecessary administrative burden.
  • There was no overall support, outside of the public authorities, for lighter procedural frameworks for regional authorities.
  • The majority of contracting authorities were in favour of having more influence on subcontracting by successful bidders though other stakeholders have rejected this.
  • The majority of contracting authorities felt that ability to include environmental or social criteria in the award phase should be better spelt out in the Directives.
  • The possibility of rules regarding the advantages of incumbent bidders were opposed by most stakeholders excepting some individuals and member states.

Which of these inputs will be adopted by the Commission is of course a matter of some speculation, however it is hoped that the emphasis on decreased formality and flexibility could be a boon for both business and contracting authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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