THE EUROPEAN PUBLIC PROCUREMENT POLICY NEW PROCEDURES AND INSTRUMENTS

1
THE EUROPEAN PUBLIC PROCUREMENT POLICYNEW
PROCEDURES AND INSTRUMENTS

• Christian SERVENAY
• and Olivier MOREAU

2
Overall Presentation of the two New Directives

• Directive 2004/18 Public sector
• Directive 2004/17 Utilities
• (water, energy, transport, postal services)

3
Some historical references

• A lengthy development from the 70s to the 90s
  from individual and specific directives to broad
  consolidated texts
• A new impulse from 1995 to 2000 Single
  Market Review, Green Paper,Communication,
  Proposals

4
The Aim of the Public Procurement Directives

• to ensure the application of basic principles
• - free movement of persons, goods and capital,
• - freedom of establishment and to provide
  services
• - non-discrimination on grounds of nationality,
• - equality of treatment.

5
The main features of the Directives

• Some important limits
• - a specific scope,
• - key provisions aiming only at coordination,
• - need of national implementing measures.

6
Objectives of the changes introduced by the New
Directives

• - to simplify the existing legislation,
• - to modernise traditional rules,
• - to provide for more flexible solutions.

7
Main changes introduced by both directives

• Simplification measures
• - only two directives
• public sector 1 instead of 4.
• utilities 1 instead of 2.
• - less thresholds, expressed in euros
• - a new structure with a logical presentation.

8
Main changes introduced by both directives

• Modernisation through the use of electronic
  means
• - Main advantages reduction of time, of
  transaction costs, of bureaucracy less risk of
  corruption.
• - Key problem to ensure non discrimination and
  respect equality of treatment.

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USE OF ELECTRONIC MEANS

• Binding provisions to regulate the use of
  electronic means
• - similar level of acceptance of paper
  documentation and electronic data,
• - detailed requirements for the presentation and
  reception of applications and bids,
• - specific conditions to develop market places
  (under the responsibility of purchasers).

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USE OF ELECTRONIC MEANS

• Provisions relating to means of communication
• - contracting authorities choice,
• - generally available and interoperable,
• - not restrictive of access,
• - ensure integrity of data and confidentiality of
  tenders (and requests).

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USE OF ELECTRONIC MEANS

• Five progressive steps in the use of electronic
  means
• - transmission of notices
• - delivery of tender documents,
• - reception of applications and bids,
• - electronic auctions,
• - dynamic purchasing systems.

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First Step

• TO TRANSMIT THE CONTRACT NOTICES TO THE OJEU
• CONDITIONS THE MEANS MUST BE GENERALLY
  AVAILABLE AND INTEROPERABLE WITH THE
  COMMUNICATION TECHNOLOGY PRODUCTS IN GENERAL USE
• ADVANTAGE POSSIBILITY TO REDUCE THE TIME-LIMITS
  FOR RECEIPT OF TENDERS AND REQUESTS TO
  PARTICIPATE

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Second Step

• TO TRANSMIT THE TENDER DOCUMENTATION (AS WELL ANY
  ADDITIONAL DOCUMENT)
• CONDITIONS UNRESTRICTED AND FULL ACCESS TO THE
  CONTRACT DOCUMENT FROM THE DATE OF PUBLICATION OF
  THE NOTICE BY GENERALLY AVAILABLE AND
  INTEROPERABLE MEANS OF COMMUNICATION (SEE
  TRANSMISSION OF NOTICES)
• ADVANTAGE POSSIBILITY TO REDUCE THE TIME-LIMIT
  FOR RECEIPT OF TENDERS

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Third Step

• TO ALLOW ELECTRONIC TRANSMISSION AND RECEIPT OF
  REQUESTS TO PARTICIPATE AND TENDERS
• CONDITIONS INTEGRITY OF DATA,
• CONFIDENTIALITY OF
  REQUESTS AND
• TENDERS,
• AVAILABILITY OF
  TECHNICAL INFORMATION REGARDING OF
  ELECTRONIC CONNECTION.
• ADVANTAGE POSSIBILITY TO REDUCE THE
  TIME-LIMITS
• FOR
  RECEIPT OF TENDERS.

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Fourth Step

• TO ORGANIZE ELECTRONIC REVERSE AUCTIONS (ERA)
• ERAs are possible only if contract specifications
  can be established with precision,
• ERAs must be announced in the contract notice,
• ERAs must be based on price or features that are
  quantifiable and can be expressed in figures or
  percentages,
• Any relevant information concerning the technical
  specifications of connection and the electronic
  auction process must be available.

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Fifth Step

• TO SET UP A DYNAMIC PURCHASING SYSTEM
• A completely electronic process
• For commonly used purchases
• For a limited duration
• Open throughout its validity to any economic
• operator
• Which satisfies the selection criteria And
  has submitted an indicative tender that
• complies with the specifications.

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Main changes introduced by Directive 2004/18

• Flexibility
• Central Purchasing Bodies
• Framework Agreements
• Competitive Dialogue
• Environmental and social issues

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CENTRAL PURCHASING BODIES

• Two possibilities
• - the body acquires supplies or services
  intended for contracting authorities
• -or it awards contracts and framework
  contracts to which contracting authorities refer.

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CENTRAL PURCHASING BODIES

• Advantages just one procedure (less time and
  cost) transfer of administrative burden
  competition at higher level (larger choice, best
  quality) greater quantity (better price) bigger
  contracts (security of supply).
• Problems centralisation, lack of experience of
  public authorities, limited autonomy in choice,
  reduced access of SMEs.

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FRAMEWORK AGREEMENTS

• Agreements
• - between one or more contracting authorities
  and one or more economic operators
• - aiming at establishing the main terms, but not
  all,
• - of contracts to be awarded during a given
  period,
• - in particular with regard to price and, when
  appropriate, the quantity envisaged.

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FRAMEWORK AGREEMENTS

• Advantages just one procedure (less time and
  cost) competition at higher level (larger
  choice, best quality) greater quantity (better
  price) bigger contracts and and share of risks
  (security of supply) flexibility (adaptation to
  markets technical and financial evolution)
  possibility to buy products as the need appears
  and possibility to re-open competition in order
  to award orders or contracts
• Problems bigger contracts, some centralisation,
  risk of captive contracts, more complicated for
  contracting authorities, reduced access of SMEs.

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FRAMEWORK AGREEMENTS WITH SEVERAL OPERATORS

• MINIMUM 3 ECONOMIC OPERATORS
• IF ALL THE TERMS ARE LAID DOWN IN THE FRAMEWORK
  AGREEMENT, CONTRACTS MAY BE AWARDED BY
  APPLICATION OF THESE TERMS WITHOUT REOPENING
  COMPETITION
• IF NOT,
• OBLIGATION FOR EACH CONTRACT TO CONSULT THE
  ECONOMIC OPERATORS CAPABLE TO PERFORM THE
  CONTRACT
• TIME-LIMIT LONG ENOUGH TO ALLOW TENDERS TO
  BE SUBMITTED
• CONFIDENTIALITY OF THESE TENDERS UNTIL THE
  TIME-LIMIT HAS EXPIRED
• CONTRACT AWARDED TO THE TENDERER WHO HAS
  SUBMITTED THE BEST TENDER ON THE BASIS OF THE
  CRITERIA SET OUT IN THE FRAMEWORK AGREEMENT.

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COMPETITIVE DIALOGUE

• For complex projects, contracting authorities may
  need to carry out something more flexible than
  the restricted procedure and more transparent
  than the negotiated one, in order to identify
  and define the means best suited to satisfy their
  needs.
• Competitive dialogues apply when contracting
  authorities do not know what the market can offer
  as technical and/or financial or legal solutions.

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HOW TO MANAGE A COMPETITIVE DIALOGUE ?

• 1st Step Selection of candidates
• (at least 3)
• - publication of a notice in the OJEU,
• - definition of the needs and requirements to be
  met in the notice or in a descriptive document,
• - select candidates after their suitability has
  been checked.

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HOW TO MANAGE A COMPETITIVE DIALOGUE ?

• 2nd Step Dialogue with selected candidates
• - candidates present their first proposals on
  the basis of the descriptive document,
• - dialogue with each candidate on all aspects of
  its proposal and the solution proposed in order
  to allow the contracting authority to clarify,
• - possibility to organize successive stages in
  order to reduce the number of solutions,
• - when the solution or various solutions have
  been identified, participants are invited to
  present their final tenders.

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HOW TO MANAGE A COMPETITIVE DIALOGUE ?

• 3rd Step Award of the contract
• The contracting authority chooses the most
  economically advantageous tender in accordance
  with the criteria mentioned in the notice,
• Possibility of fine-tuning but no substantial
  change of the tender or the notice is allowed.

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ENVIRONMENTAL AND SOCIAL ISSUES

• Problem May contracting authorities combine
  environmental or social requirements with public
  procurement rules (equal access of bidders and
  objectivity of procedures)?
• For instance, are they allowed to buy  green
  buses  (less polluting) even if they are more
  expensive?

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ENVIRONMENTAL ISSUES

• ART. 23 Possibility to include environmental
  characteristics into tender documents.
• Technical specifications may be defined
• by reference to national standards implementing
  EU standards
• or in terms of performance or functional
  requirements if they are sufficiently precise to
  determine the subject of the contract
• or partly by reference to one and the other.

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ENVIRONMENTAL ISSUES

• Art 53 Environmental award criteria are allowed
  only if those criteria
• - Are linked to the subject of the contract,
• - Do not confer unrestricted freedom of choice
  on the contracting authority,
• - Are expressely mentioned in the contract
  notice and tender documents,
• - Comply with the fundamental principles of EU
  Law

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SOCIAL ISSUES

• Contracting authorities are allowed to lay down
  special conditions relating to the performance of
  the contract,
• They may reserve the right to participate in
  award procedures to sheltered workshops whose
  more than 50 emplyees are people with
  disabilities.

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CHANGES WHICH ARE SPECIFIC TO DIR. 2004/17

• SCOPE OF APPLICATION OF DIR. 93/38
• CONTRACTS AWARDED BY CONTRACTING AUTHORITIES OR
  PUBLIC COMPANIES WHICH PURSUE THEIR ACTIVITY IN
  THE DRINKING WATER, ENERGY, TRANSPORT OR
  TELECOMMUNICATION SECTORS,
• OR BY OTHER ENTITIES (PRIVATE ENTITIES) HAVING
  ONE OF THESE ACTIVITIES AND OPERATING ON THE
  BASIS OF SPECIAL OR EXCLUSIVE RIGHTS GRANTED BY A
  PUBLIC AUTHORITY

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CHANGES WHICH ARE SPECIFIC TO DIR. 2004/17

• 1. EXCLUSION OF THE TELECOMMUNICATION SECTOR
• Economic operators in this sector are now in
  competition and take their all decisions on an
  economical basis. No reason to submit them any
  longer to public procurement directives.
• 2. INCLUSION OF POSTAL OPERATORS
• Their activities are progressively submitted to
  competition and become commercial since 2000. As
  a result these operators are will enter into the
  scope of DIR. 2004/17 before 31-12-2008
  (depending on each member State).

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CHANGES WHICH ARE SPECIFIC TO DIR. 2004/17

• 3. A NEW DEFINITION OF SPECIAL OR EXCLUSIVE
  RIGHTS
•  Special or exclusive rights  mean rights
  granted by a competent authority by way of any
  legislative, regulatory or administrative
  provision the effect of which is to limit the
  exercise of activities defined in Art. 3 to 7 to
  one or more entities, and which substantially
  affect the ability of other entities to carry out
  such activity.
• 4. POSSIBILITY TO EXCLUDE AN ACTIVITY MENTIONED
  IN ART. 3 TO 7 IF IT IS DIRECTLY EXPOSED TO
  COMPETITION
• Exclusion of contracts intended to enable an
  activity mentioned in Art. 3 to 7 if, in the
  member State concerned, the activity is directly
  exposed to competition on markets to which access
  is not restricted (Art 30-1)
• Decision to be taken by the Commission according
  to a specific procedure.

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A short reminder of the remedies provisions

• Directive 89/665 remedies for contracting
  authorities (contracts covered by directive
  2004/18,
• Directive 92/13 remedies in the utilities
  sectors (contracts covered by directive 2004/17).
  
• Directive 2007/66 amending both previous
  directives

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Main provisions of the remedies directives

• The principle
• Member States must ensure that decisions taken by
  contracting entities may be reviewed as quickly
  as possible on the grounds that such decisions
  have infringed the public procurement legislation

36
Main traditional provisions of the remedies
directives

• Three possible measures
• Interim measures including suspension of the
  procedure,
• Setting aside of decisions taken unlawfully,
• Damages granted to the person harmed by the
  infringement.

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Main improvements of the new directive

• Introduce and regulate a standstill period (cf.
  Alcatel case law (C-81/98)) 10/15 days period,
  some derogations.
• Several legal clarifications availability,
  information of contracting authorities,
  suspension, time limits, ineffectiveness of
  contracts, ex ante transparency, alternative
  penalties.

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Recent and future evolution

• - some new legislative initiatives,
• - several non binding documents,
• - many studies and documents for reflection.

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Future legislative initiatives

• Three factors
• - GPA revision,
• - completion of the present scope of the
  directives (defence)
• - adoption of specific implementing measures
  (list of entities, new CPV, new standard forms).

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Adoption of non binding documents

• Commission services will prepare
• - a communication on Institutionalised Public
  Procurement (IPP),
• - a Small Business Act in favour of SMEs.

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Studies and documents for reflection

• Commission services are developing
• - several projects listed in the Action plan on
  e-procurement (development on e-catalogues,
  e-signatures, compliance verification,)
• - evaluation studies of the Action plan,

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Member States responsibility

• Member States shall
• - adopt full primary and secondary legislation
  implementing European texts, on time,
• - prepare guidelines and operational tools,
• - develop the capacity to manage an efficient and
  safe system of Public Procurement.

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Candidate countries responsibility

• Candidate countries are required to progressively
  align their legislation and set up a relevant
  administrative capacity.

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Purchasers responsibility

• Public Purchasers shall make use of all legal
  opportunities
• - implement national regulations with the aim to
  get best value for money,
• - use the allowed flexibility (reduction of
  deadlines, specific types of procedures,),
• - take advantage of the new varied solutions
  offered (e-procurement facilities).

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Purchasers responsibility

• Public Purchasers have a specific role to play
• - in providing and dissiminating some
  knowledge of legal provisions,
• - in advising on best practices,
• - in providing confidence among operators
  and institutions.

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Economic operators role

• All economic operators should contribute to the
  completion of the Internal Market
• - to a fair and sound competition,
• - to the reduction of public expenditures,
• - to the quality of public services,
• - to the improvement of productivity and the
  development of cross border trade.

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Conclusions

• What Commission services expect from you?
• What Commission services could do for you?