EU outlines reform of public procurement rules

20 December 2011

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20 December 2011 | Paul Snell

The opportunity to negotiate more with suppliers and a “drastic cut” in paperwork are among proposed changes contained in the European Commission’s (EC) major reform of public procurement rules.

Other amendments put forward by the EC in proposals published today include reducing the number of tender notices that local and regional authorities need to publish, shorter deadlines to complete tenders and the full use of e-procurement within two years.

The ideas follow almost 12 months of work by the EC, incorporating the views and suggestions of buyers, suppliers, and politicians.

"This reform is necessary, ambitious and realistic,” said Michel Barnier, the commissioner for internal market and services. “The current directives have proven their worth, but directives must move with the times. I would like to make sure that the public procurement directives become simpler and more effective and that they make life easier for those whose daily work involves public procurement.”

If these reforms are accepted by member states, the new rules should be in force by the 30 June 2014.

When it comes to increased negotiation, the EC recognised this is more “risky” in terms of fairness, but said increased flexibility would allow products and services to better meet the needs and budgets of buyers. But there are several caveats – award criteria and minimum requirements set out at the start cannot be altered and any amendments must be communicated to all potential bidders.

Admin will be reduced by allowing suppliers to self-certify, swearing that they meet the necessary requirements to bid. Only winning bidders will be required to prove it. But buyers will also be prohibited from asking for documents suppliers have submitted in the past four years that are still valid. The EC claims reducing admin will save around €169 million a year collectively.

However, the Commission has decided not to raise the value of thresholds – a change the UK government had been campaigning for. The EC said as well as reducing the level of transparency, increasing threshold values would put it in breach of international agreements for open markets – and could cost the EU €30 billion (£25 billion) if the values were doubled.

“We welcome the draft proposal – it highlights the importance of straightforward, flexible rules and demonstrates how this can be a catalyst for growth,” said cabinet office minister Francis Maude. “It also recognises that we need to look at ways we can remove unnecessary, disproportionate costs on lower value procurements – an area that is very important for smaller firms.

“We will now continue to work with other countries across Europe and seek to influence the final proposal so that it works for British business of all types, including vital new business models such as mutuals.”

The proposals also essentially scrap (with a few exceptions) the classification of ‘part B’ services – such as health and education services – that previously benefitted from a less onerous regulatory regime. The EC said this is “no longer justified” given increases in cross-border trade.

The European public procurement market is estimated to be worth around €420 billion (£351.6 billion) a year.

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