New EU rules on public procurement: better value for money, growth and sustainability?

Speakers: Rühle Heide, Nunes de Almeida Joaquim
Moderator: Cahill Dermot

On Tuesday 18th of February, at the premises of Science14 Atrium in Brussels, PubAffairs Bruxelles hosted a debate concerning the new EU rules on public procurement recently approved by the European Parliament. The event was chaired by Professor Dermot Cahill, Chairman of the Institute for Competition & Procurement Studies, Bangor University (UK), while the discussants were Ms Heide Rühle MEP (Greens/DE) and Mr Joaquim Nunes de Almeida, Director for Public Procurement in the European Commission (DG Internal Market and Services).

Firstly, Professor Cahill introduced the speakers and the background of the new set of rules on public procurement and he briefly explained how important innovation is while tackling the issues related to public procurement. He then gave the floor to the discussants.

Mr de Almeida started his preliminary speech by pointing out that the total amount of expenditure concerning the public procurement market consists of 2.3 trillion euros corresponding to 19% of the EU GDP, while the contracts covered by the directive amount up to 420 billion corresponding to 3.6% of the EU GDP. Mr Almeida continued by affirming that these mere facts provide evidence of the importance of public procurement in the Single Market Act I. He also clarified that an array of policy goals has been enshrined in the new legislation in order to produce a greater impact.

In addition, Mr Almeida explained that the public procurement reform is a set of multifaceted provisions which aimed at introducing greater flexibility, reducing bureaucracy, fostering innovation and reducing costs by broadening the flexibility of negotiations for contracting authorities. These objectives were pursued by extending the use of electronic communication, reducing the amount of documentation needed, suppressing the distinction between covered and non-covered services, taking into account the full life cycle costs of the bids and, last but not least, by enhancing the provisions on projects which favour environmental, social and innovative goals.

Mr Almeida also highlighted the importance of facilitating SMS access, setting broader rules for conflicts of interest, as well as fostering a clearer and lighter regime with regard to the directive on concessions, which will now be subordinated to a common legal framework.

Ms Rühle started her intervention by underlying that many concerns which have stemmed from parliamentary hearings were related to the issue of legal certainty, and, as a result, the parliamentary work concentrated much effort in the clarification of both the definition and the scope of the notion of public procurement. She welcomed the current definition of the principle of the most economic advantageous tender, which allows the public purchaser to take full life cycle costs into account as, in her opinion, in times of financial crisis it is vital to foster innovation and sustainable development.

Ms Rühle also emphasised the importance of use of labels, as well as of several measures which aimed at fostering innovation, such as preliminary market consultations, modification during the term of the contract and the introduction of some aspects of electronic procurement. She also welcomed the inter-institutional work in order to reach a compromise on the “European Single procurement document”, the issue on abnormally long-term contracts, the issues of subcontracting and service concessions, as well as on the problem of third party access.

The first matter of debate considered the impact of public procurement practices among member states, especially for calls for tenders below the threshold which consists of roughly 3% of the EU GDP and binds member states to apply the EU law.

Concerning this question, Ms Rühle expressed her satisfaction with the distinction which the threshold brings about and she added that the introduction of e-procurement would have a greater positive impact on public procurement tenders, including those below the threshold. On the same issue, Mr de Almeida stated that there is still a lot of potential to improve transparency in the share of public procurement which falls under the competence of member states, although there is no sign of any intention to circumvent the public procurement directive within Europe.

Another matter of debate was the issue of transparency, concerning which Ms Rühle stressed the importance of the link between the issue of transparency and public procurement as a current and future priority for both the internal market and European institutions, while Mr Almeida stated that he firmly believed that the issue of transparency and the fight against corruption are highly important phenomena as public procurement tenders can be affected by bad practice or even by organised crime. Mr de Almeida also said that member states still play a great role in tackling these issues, especially through national surveillance authorities and he added that they will communicate the evolution of the state of play on these matters to the Commission through periodical reports. In Mr Almeida’s opinion, this setting should enhance the effort to develop better tools to spot the appearance of these phenomena and to address them effectively.

The final part of the debate and the Q&A session covered the issues of: interoperability and the use of open standards in public procurement; e-invoicing; e-procurement; EU labels; the “most economic advantageous tender” principle; SMEs competitiveness issue and innovation; the way of awarding social and/or environmental standards; the relations between public procurement and the energy sector; the issue of services covered by a light regime; the importance of innovation partnerships and the flexibility of contracting authorities.

Do you want to go deeper into the issues discussed in our debate? Check our list of selected sources which we have provided for you

Public Procurement, European Commission

New EU rules on public procurement, European Parliament

New rules a gain for local authorities and small enterprises, The Greens/EFA

EU brings innovation into public procurement rules, Euractiv

General Procurement Guidance, Irish Office of Government Procurement

Public procurement law: the basics, Out-law.com