European Commission plans to curb foreign access to public contracts

Paul Snell is managing editor at Supply Management
posted by Paul Snell
in Law
19 February 2016

The European Commission says countries found to be blocking European suppliers from its own deals will face “price adjustment measures” to their tenders when bidding for contracts.

This could add up to 20% extra to the cost of a bid. The supplier can still be awarded the deal if the offer is competitive. This will only apply to contracts worth more than €5m.

In an attempt to ease administration for smaller authorities, individual member states will choose which contracting authorities can apply it.

There are a number of caveats – for example, the supplier will not face a penalty if they can demonstrate half of the value of their tender is made up of non-covered goods and services and it will now be up to the supplier, not the buyer, to prove this.

Elzbieta Bienkowska, commissioner for internal market, said: “Global government procurement represents a huge market. We want EU companies to be able to tap into this market outside the EU just as companies from outside the EU are able to benefit from our market.”

The reluctance of certain nations, particularly emerging markets such as China and India, has been a thorn in the side of the Commission and European businesses for years. Even mature markets are essentially off limits to European firms. Just €178bn of US public contracts and €27bn of Japanese deals are accessible to EU companies.

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