european government procurement policy and experience rita beuter senior expert, european policies,...
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European government procurement policy and experience
Rita Beuter Senior Expert, European Policies, EIPA,
Maastricht (NL) [email protected]
© EIPA – 2008
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Facts on Procurement Procurement represents about 17% of EU
GDP, about Euro 2000 billion 16 % (in value) was published in 2002 at EU
level; publication in the Official Journal (OJ) in 23 languages; Tenders Electronic Daily (TED)
estimated aggregated value of procurement contracts published in the OJ increased from 59 billion (1993) to 270 billion Euros in 2004
cross-border procurement accounted for 10%, but indirect procurement is relevant
European rules apply to 30 countries, the EU, Norway, Iceland, Liechtenstein
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Legal Framework/Basis - Public Procurement
International Treaties and Agreements WTO: Government Procurement Agreement (GPA) -
plurilateral Agreements with Third countries
EC Treaties: no definition Primary EC law (Internal Market, fundamental
principles) European rules apply to the European Economic Area
(EEA) Secondary EC law: Procurement Directives
National Law Sub-national
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Objective of Public Procurement
Policy/European Procurement
open up public procurement to competition
buy goods and services of a better qualityand a better price, value for money
anti-corruption tool tool for stimulating innovation tool for stimulating sustainable
development establishment of a single market
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Principles in the Treaty applying to public contracts and Fundamental Principles:
non- discrimination on grounds of nationality
free movement of goods freedom of establishment freedom to provide services
equality of treatment obligation of transparency proportionality mutual recognition
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The Rules in Public Procurement
Legislative Package 31 January 2006:
“Classic“ or “Public Sector“ Directive - Directive 2004/18/EC on the coordination of
procedures for the award of public works contracts, public supply contracts and public service contracts
“Utilities” Directive - Directive 2004/17/EC coordinating the
procurement procedures of entities operating in the water, energy, transport and postal services sector
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The Rules in Public Procurement
Remedies Directives- 89/665/EEC, public supplies and public works- 92/13/EEC, public utilities- amending remedies directive: Directive 2007/66/EC amending Council Directives 89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the award of public contracts
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Structure of the Public Sector Directive 2004/18/EC
Preamble- RecitalsTitle I Definitions and general principlesTitle II Rules on public contracts-scope of application (thresholds, specific situations, excluded contracts, special arrangement)-arrangements for public service contracts-technical specifications-procedures (open, restricted, negotiated, competitive dialogue)-framework agreements, dynamic purchasing systems-advertising and transparency-time limits-selection of contractors-award of contracts
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e-procurement directive provides legal basis for carrying
outelectronic procurement at European level
definition of electronic means and their use shortening of time-limits covers electronic communications covers new tools available:
- dynamic purchasing systems - electronic auctions (reverse electronicauctions) as a tool for the award
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Definition Contract
concluded in writing; for pecuniary interest; for works, supplies or services
Which contracts are affected? Contracts which exceed certain financial thresholds Contracts which are not excluded in accordance
with the exceptions provided for in the directive
Contracts below the relevant threshold level:fundamental principles apply,transparency (degree ofadvertising), cross-border interest
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Excluded contracts – Some
examples
Contracts declared secret or requiring special security measures
contracts awarded pursuant to international rules
specific exclusions (employment contracts, arbitration & conciliation services, etc)
service concessions
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Definition of contracting authorities
the State, regional or local authorities, bodies governed by public law, or associations formed by one or more such authorities or bodies governed by public law
It includes bodies of any kind which contracting authorities create by law, regulation or administrative action
“the State” encompasses legislative, executive and judicial bodies
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Definition of contracting authorities
Bodies governed by public law: 3 cumulative criteria: established for… meeting needs in the
general interest, not having an industrial or commercial character
having legal personality; and financed, or supervised or appointed, for
the most part, by the State, regional, local, other bodies
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Thresholds as of 1 January 2008
EUR 133 000supplies/services - central levelAnnex V list of products awarded by contracting authorities in the field of defence
EUR 206 000supplies/services - sub-central levelAnnex B services/non-GPA servicessubsidised service contractsproducts not covered in Annex V
EUR 5 150 000works
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Defence Procurement
Directive applies to public contracts awarded by contracting authorities in the field of defence (defence ministries are covered), subject to Article 296 of the Treaty
problem: exemption used extensively by the
Member States
initiative at European level for a Directive in the field of Defence and Security
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Central Purchasing Bodies
definition: contracting authority, which acquires supplies and/or services intended for other contracting authorities or awards public contracts or concludes framework agreements for works, supplies or services intended for other contracting authorities
examples: CONSIP (Italy), OGC Buying Solutions (UK), UGAP (France)
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Public Sector Directive
special arrangements (reserved contracts) – social consideration
arrangements for public service contracts – distinction between Part A Services and Part B Services
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Technical Specifications to be set out in contract documentation
(notices, contract documents, etc) take into account accessibility for
people with disabilities should provide equal access for
tenderers reference to technical specifications, “or
equivalent” performance or functional requirements
(environmental characteristics) or mixture not to refer to specific make, source,
particular process, trade marks, patent, etc
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Public Sector Directive variants (only possible award criteria: most
economically advantageous tender), stimulate innovation
subcontracting in order to stimulate SME participation
conditions for performance of contracts, social and environmental considerations
New procedures/provisions/systems
- competitive dialogue - framework agreements- dynamic purchasing systems
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Procedures
Open procedure (all potential suppliers / contractors / service providers)
Restricted procedure (only selected potential suppliers/contractors/service providers, two-stage procedure) (minimum of 5 must be invited to tender)
Competitive dialogue contracting authority enters into dialogue with bidders following an OJ notice (only for complex contracts)
Negotiated procedure (direct negotiation with chosen suppliers/contractors/service providers; only in exceptional circumstances; burden of proof on contracting authority; justification)
negotiated procedure with prior publication negotiated procedure without prior
publication Accelerated restricted/negotiated (for use only in
exceptional circumstances of urgency not due to fault of contracting authority)
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Competitive Dialogue
new procedure for particularly complex contracts
contracting authority considers that the open or restricted procedure will not allow the award of the contract
“a flexible procedure ...which preserves not only competition between economic operators but also the need for contracting authorities to discuss all aspects of the contract with each candidate”
considerably used in France and the UK
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Framework Agreements Def.: Agreement between one or more contracting
authority and one or more economic operators to establish the terms governing contracts during a certain period
framework duration 4 years, exceptions for contracts based on a framework agreement,
distinction: - all terms are laid down (single economic
operator/versus several economic operators, at least 3)
- not all terms laid down: mini-round of competitionin practice: framework agreements are frequently
used
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Dynamic Purchasing Systems (DPS)
Definition“A ‘dynamic purchasing system’ is acompletely electronic process for makingcommonly used purchases... which is limited induration and open throughout its validity to anyeconomic operator which satisfies the selectioncriteria and has submitted an indicative tenderthat complies with the specification.”-a new system which has hardly been used in practice-could be seen as an open electronic framework,
similar system for below threshold applied in CONSIP
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Publication of notices
prior information notice (PIN) or information on buyer profile (to make known intended total procurement after beginning of fiscal year) not compulsory
contract notices notices for design contests (services) notices for works concessions (works) contract award notice (CAN)
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Debriefing – informing candidates and tenderers
Contracting authority must inform candidates and tenderers of decisions reached: a) award of contracts, conclusion of framework, admittance to dpsb) discontinuation of procedure and groundsc) to restart a procedure or implement a dpswritten information must be given after request to the c.a.
After written request, contracting authority must informa) unsuccessful candidates/tenderers of reasons for rejection of application/tender b) admissible tenderer of characteristics and relative advantages of selected tender, name of tenderer / parties to framework This information must be given within 15 days after receipt of request
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Selection Criteria
Suppliers, contractors or service providers must meet specific objective criteria:good repute, professional qualifications, economic and financial standing, technical knowledge, ability
mandatory exclusion of tenderers/candidates (i.e. criminal organisation, fraud, corruption, etc.)
tenderers/candidates may be excluded: bankrupt, grave professional misconduct, etc
indication of environmental management measures in appropriate cases
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Award criteria
the lowest price only,or
the most economically advantageous tender
choice for the contracting authoritiesdepends on the subject matter of the contract
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Most economically advantageous tender
non-exhaustive list of criteria mentioned in the directive, for
example: quality price technical merit aesthetic and functional characteristics environmental characteristics running costs cost-effectiveness after-sales service and technical assistance delivery date and delivery period or period of completion security of supplies
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Most economically advantageous tender
award criteria must be linked to the subject-matter of the contract
criteria of most economically advantage tender from the point of view of the contracting authority
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Most economically advantageous tender
the contracting authority shall state in the contract notice/contract documents/descriptive document the relative weighting which it gives to each of the criteria (range)
if not possible: descending order of importance
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Some experiences from the Member States
Italy: in the past, the use of the most economic advantageous criterion was not allowed for public works contracts. Following a judgement by the European Court of Justice this limitation was removed.
UK: most economically advantageous tender is used in most procurement as award criteria
Austria: lowest price only allowed if quality standard can be described with precision
Ireland: for more complex projects the most economically advantageous tender award criterion is the most commonly used
trend towards life-cycle costing and sustainability
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Some experiences from the Member States – most economically advantageous tender – evaluation committees
Italy: a committee must be established for evaluation of tenders (maximum 5 members, experts in the specific sector, no conflict of interest)
UK: in general a committee, for strategic contracts external experts, academics, no conflict of interest
not determined by European directives
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Award decision and conclusion of contract
contracting authority is obliged to inform tenderers of its award decision prior to conclusion of contract
standstill period between award decision and signature of the contract
decision to award a contract must in all cases be open to review procedures prior to the conclusion of the contract
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Supervision different systems and levels/degrees in the Member
States (centralised/semi-centralised/decentralised procurement structures)
Italy: Public Procurement Code provides for an independent authority, focus on EC principles and fair and efficient use of public funds, complaint to Court of Auditors
“new” Member States: central procurement offices have strong monitoring and control functions (Poland, Czech Republic, Hungary, Estonia, etc)
France: key institution DAJ (advise) and public procurement observatory
National audit offices and courts of auditors European Commission can ask for report and
monitoring of practices; for Member States obligation to provide statistics
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Dealing with complaints
Body responsible for appeal/mediation procedures must be indicated in the contract notice
aim of EC remedies: rapid and effective remedies; current reform tackles “race to signature” and illegal direct awards
divergence in national remedies, different legal systems in the Member States (courts, tribunals, arbitration, etc)
complaints to the European Commission infringement proceedings by the European
Commission
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Procurement trainingSome experiences
professional training in UK: Chartered Institute of Purchasing & Supply
NEVI in the Netherlands some countries: the central procurement
office; other countries: hardly any training
national training institutes for the public sector
University level private providers of training
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For further information
EIPA website on public procurement
http://www.eipa.eu/en/topics/show/&tid=30Rita BeuterEIPATel. 0031 – 43 – [email protected]
EIPA website on public procurement
http://www.eipa.eu/en/topics/show/&tid=30Rita BeuterEIPATel. 0031 – 43 – [email protected]