EU regulation plan 'would not work'

31 January 2002
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31 January 2002 | Robin Parker

A European Union plan to give public bodies the right to dictate terms to private-sector subcontractors has come under fire from the UK government's procurement advisers.

A senior figure at the Office of Government Commerce (OGC) said trying to regulate the whole of the private sector through public spending would not work.

The European Parliament has initially approved a proposal that would allow existing powers for public-sector bodies to put demands on contractors to be extended to subcontractors.

John Colling, director of procurement policy at the OGC, said public-sector purchasers should leave the vetting of subcontractors to contractors.

"Relations with subcontractors are not the authorities' problem. In any case, subcontractors don't need to be as financially strong. We need to make sure small firms are not denied the chance to bid for contracts."

But Tony Wiltshire, head of procurement at Leeds City Council, said the proposal fitted in with his authority's ethos of vetting suppliers and developing relationships.

"You should have a reasonable idea of who you're using as subcontractors, and this should provide a focus for purchasers to make informed decisions."

In current practice, contractors take responsibility for their subcontractors in most cases, but there are exceptions in specialised construction projects, Wiltshire added.

The proposal is one of 108 amendments to the European Commission's EC public-sector procurement directive to receive initial approval in a plenary session earlier this month.

The amendments cover a wide range of aspects of public-sector procurement, including framework agreements, environmental responsibility, employment protection and consortia buying.

Colling said that aside from the issue of regulating subcontractors, there were signs of "increased flexibility" in addressing the needs of public-sector organisations and their suppliers.

The proposals would allow exclusive dialogue with the winning bidder prior to the award of contracts for public-private partnership projects, and require member states to ensure that tenders by public bodies do not distort competition.

The European Parliament is expected to reach a common position in May. It could be up to two years before the amended directive takes effect.

SMjan2002

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