Remedies Directive holds back public sector buyers

11 January 2011

11 January 2011 | Angeline Albert   

Changes to European Union (EU) procurement rules have raised costs and hampered effective purchasing, according to a survey of public sector buyers published this week.

A total of 141 procurement officers from councils in England and Wales responded to an online survey by the Local Government Association.

Only 36 per cent said the EU’s Remedies Directive has led to more efficient and effective procurement practice.

The directive highlights steps suppliers can take to challenge the award of a public contract. A key change is the remedy of “ineffectiveness”, which gives courts the power to scrap a contract if it has not been advertised, the standstill period has been ignored or if the rules governing a framework agreement have been broken.

Two thirds of buyers said procurement costs and administrative burdens had increased as a result of the directive, while 54 per cent felt the purchasing process had become more complicated.

And 69 per cent of buyers said dealing with challenges from unsuccessful bidders – following the directive’s introduction in December 2009 – hindered councils’ procurement activities.

The new directive had also scuppered councils’ attempts to overcome cuts in funding by procuring and delivering services in more innovative ways.    

Seventeen per cent of purchasers said their local authority had been legally challenged by an unsuccessful bidder in the 12 months prior to November 2010.

Buyers also felt they were entering a legal minefield, with 65 per cent expressing uncertainty over whether competition to tender is required when sharing services with other public bodies.

Most buyers wanted clearer, more easily accessible guidance and support from the EU.

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