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The Public Has It’s Say On:

The Future Of EU Public Procurement

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. A review of public procurement in the EU began in early 2011 with the publication of Green Paper titled 'Towards a more efficient European Procurement Market'. The green paper set out proposals or more accurately issues for discussion under a total of 24 different headings – from the 'modernisation of procedures' to the promotion of 'innovation' through procurement. It was an elaborate questionnaire posing a total of 120 questions about public procurement in the future. The irony of a process of simplifying EU procurement starting with what was effectively a questionnaire of 120 questions – was not lost on many! However the questions were straightforward and to the point, as the following example shows: 2011

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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 Listening Fast forward a number of months and the EU had received just over 600 responses from public organisations, member state governments, industry associations and even private citizens. Those sellers and their industry associations who availed of this one in 50 year opportunity to input to Europe’s policies on public procurement accounted for approx. 40% of all responses received. These responses will shape the new regulations due before the end of 2011, so reviewing the results is likely to provide a good indication of the changes that are likely to be made.

A Call For Greater Simplification 1. There is widespread support for greater flexibility and simplification of EU procurement rules. One clear expression of this is support for the generalisation of the negotiated procedure. It was favoured as a primary means of affording greater flexibility and reducing the administrative burden placed on buyers. 2. Most believe that procurement procedures are too formalised and do not allow contracting authorities to obtain the best possible procurement outcomes. This results in calls for more flexibility in the conduct of the procedure, such as possibility to contact participants in a flexible manner to clarify open issues or to discuss elements of the offer. 3. There is clear support for the general acceptance of the negotiated procedure. Generalizing the negotiated procedure – this was favoured as a primary means of affording greater flexibility and reducing the administrative burden placed on buyers.

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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 for example could mean that certificates and other evidence would only be required from the winning bidder. It would certainly cut the cost and bureaucracy associated with prequalifying bidders. 6. The repeal of the rigid separation of selection and award phases is something that most respondents are in favour of. That includes the view that it would be justified in exceptional cases to allow contracting authorities to consider supplier capability and suitability criteria in the award phase. This is particularly true for consultancy or social services, where the providers' professional experience and qualification really matter. 7. Most believe that contracting authorities should be able to consider previous experience or track record with bidders – opening up the potential for certain suppliers to be black-listed based on poor past performance. 8. Three quarters of buyers who responded called for increased thresholds. However, the commission makes it clear that its obligations to international treaties make this impossible.

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The Top Changes Supported By Sellers: 1. The simplification of evidence for qualification of bidders 2. Promote innovation 3. Cross border joint procurement 4. More negotiation 5. Clarify rules on substantial modifications

The Top Changes Supported By Buyers 1. More negotiation 2. Specific solutions for cross border joint procurement 3. Simplify evidence for pre-qualified bidders 4. Increase thresholds 5. Promote innovation

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9. There is support for clarifying the position on amendments to contracts during implementation (including termination) and simplified procedures were amended contracts need to be re-advertised. However the EU has not been given free rein in this area, with little support for changes regarding contractor changes, or contract execution (e.g. execution guarantees delivery conditions, delays, payment, etc.). The regulation of sub-contracting is favoured by buyers, but not other groups.

10. As regards measures to improve SME access to public tenders stakeholder's opinions are divided. Such measures include: • Mandatory splitting of contracts into lots • Turnover caps • Quotas/targets for SME awards • Mandating a second language in respect of tenders

11. 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 the subject 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 of other goals, such as the environment, or innovation. For instance, a majority of business and contracting authorities believe that the current rules on technical specifications make sufficient allowance for the introduction of considerations related to societal policy objectives, whereas a very 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.

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15. Further intervention by the EU to prevent against the risk of corruption, with the exception of 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.

Š ASGgroup 2011 Terms & Conditions Apply

For more information visit: www.theASGgroup.com +353 (0)1 6205787 Unit 24 Park West Enterprise Centre, Park West, Dublin 12.

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The Future of EU Public Procurement