Member states have backed the European Commission’s proposals aiming to modernise and clarify the rules governing public procurement, but debate continues over the degree of flexibility to be introduced, with some countries advocating a more ambitious approach. During a first public debate on the matter at the Competitiveness Council, on 20 February, ministers discussed the level of softening of rules suggested by the Commission in the two texts it proposed on 20 December 2011.

Public procurement, which represents 19% of the European GDP, is the subject of a package of proposals (see box), which aim to clarify, modernise and reinforce the legal safety of the current texts (Directives 2004/18 on the coordination of procedures for the award of public works contracts and 2004/17 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors).

The Council working group chose to focus on the former directive, and the Presidency selected the two particular points in the texts which are provoking debate among member states: on the one hand, flexibility and improved dialogue between parties, and on the other hand the relaxing of rules for certain types of services.

CHOICE OF PROCEDURES

The first point refers to the softening introduced by the Commission proposal regarding the choice of procedures, or in the assessment criteria for an offer. The proposal for the general directive allows member states to choose between open or restricted procedures, or those which introduce more competitive dialogue, such as the procedure that has been negotiated for notice of publication - which has been highlighted without becoming a common regime. The proposal expands the list of cases in which member states can authorise a competitive negotiation procedure, since the Commission believes that improved dialogue between contractors and providers can contribute to improving public purchases and to making them innovative, as well as reducing costs on both sides.

«The majority of member states are in favour of allowing greater access to the negotiation procedure,» concluded Ole Sohn, Danish minister for enterprise and growth, who chaired the meeting. Some member states, such as Poland, France, Belgium, the United Kingdom and Sweden, wanted unrestricted access, while others took a more moderate approach, such as Germany, the Czech Republic, Lithuania or Portugal, which want more flexibility but with clear rules to prevent the violation of the principles of non-discrimination and equal treatment. Spain, Malta and Estonia, however, did not believe that expansion would be useful, and supported the Commission’s proposal.

MORE FLEXIBLE RULES

The second issue discussed by ministers concerned the establishment of more flexible rules for certain services, which are currently grouped together as ‘list B’, with others classed as ‘list A’. The Commission has proposed the removal of this distinction, which was created in the 1990s and was only supposed to be a temporary measure. It has also proposed the application of uniform rules to all services except social, cultural, education and health services, which if they are worth less than €500,000 have the advantage of being exempt from any procedural demands, or if their value is greater than this threshold, benefit from a simplified procurement regime. On this question, opinion among member states was also markedly divided: Germany, Austria, Belgium, France and Italy were categorically opposed to deleting the distinction between ‘list A’ and ‘list B’, while a second group, which included Hungary, the Netherlands, Lithuania and Estonia, said it was important to re-integrate certain services that were previously exonerated from general rules, such as legal services, and restaurants and hotels - considering their limited impact on competitiveness within the EU. A third group composed of Cyprus, Spain, Latvia, Malta and Portugal agreed with the Commission.

This first debate has paved the way for the working group on public markets to continue its evaluation in order to come up with political conclusions between now and the next Council, which should take place in May.

«We will continue to work to find the right balance, by integrating the comments of member states and the Parliament,» emphasised Michel Barnier, the commissioner in charge of the internal market, adding that «a greater flexibility should accompany better governance at the national level, including the setting up of supervising authorities, as proposed in the text under discussion».

Background

The revision of the directives relating to public procurement will maintain the structure whereby general markets are distinguished from specific ones within the two texts, and includes a new proposal on concessions, which groups together markets relating to public works and those concerning services that have not yet been the subject of a legislative text.

Thresholds: Markets worth more than five million euro for public works contracts, 200,000 euro for services and 500,000 euro for certain specific sectors

Flexibility: Member states will benefit from more flexibility in the choice of procedures, and a more flexibile regime is proposed for social, cultural, education and health services. To simplify calls for tender, the Commission has proposed a systematic return to solemn declarations and to set up a ‘passport for public markets’.

Social objectives: The revision establishes the mandatory division of contracts into categories of above and below 500,000 euro in order to promote the participation of SMEs. It also introduces a special procedure to enable the development of innovative solutions, and emphasises social objectives, such as creating decent jobs, and the integration of vulnerable people. Concerning the classification of markets, the cost of the life-cycle of the product, goods or services concerned, the cost of transport and the possibility of recycling are all taken into account.