experiences with procurement policy in the eu
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Experiences with procurement policy in the EU. Procurement Seminar Delhi, 11-12 May 2006 Georg Roebling DG TRADE European Commission. Overview. Introduction Objectives Principles EU procurement framework International dimension Current topics Conclusions. Introduction - 1. - PowerPoint PPT PresentationTRANSCRIPT
Experiences with procurement policy in the EU
Procurement Seminar Delhi, 11-12 May 2006Georg RoeblingDG TRADEEuropean Commission
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Overview
Introduction Objectives Principles EU procurement framework International dimension Current topics Conclusions
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Introduction - 1
EU – internal market of 25 Member States, 21 official languages
Accession of Romania, Bulgaria in 2007-08 At the heart of European integration since
1957: Internal Market in procurement: markets were fragmented ensure that any company in the EU can effectively compete for any public contract.
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Introduction - 2
Federalism vs. Uniformity Striking a reasonable balance:
- EU Framework laws (“Directives”) = need transposition in all EU MS to fit into national/regional/local legal systems
- Only above the thresholds
1 procurement market KEY: Central electronic gateway – TED
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Introduction - 3
Some figures Volume of EU-25 procurement market: 1,600
billion Euros (16% GDP) >200,000 procuring entities 33% cross border procurement In terms of success rate, domestic and firms
from other EU MS compete on a par Cost Savings: 30% (substantially more?)
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Objectives – 1
Economic / Fiscal Companies can tap into larger market, reap
economies of scale and can specialise efficiency gains to be passed on to public (if competitive tendering environment!)
Enormous savings potential from transparent, open and competitive tendering more resources available for education, health, infrastructure…
Access to finance, expertise, technologies and managerial know how of private sector, incl. public-private partnerships (PPPs)
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Objectives – 2
Competitiveness Public service gets access to best products Businesses: learn to compete to become
competitive which in turn drives innovation and efficiency and thus generates welfare gains for society
Protect efficient markets Anti-cartel (bid-rigging) inflated prices
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Objectives - 3
Non-discrimination Base for EU action Market, not State, should pick the winner: no
cosy relationship with favourite suppliers
Accountability Anti-corruption – opaque practices more
difficult in transparent, competitive environment
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Principles - 1
Transparency Throughout the tendering procedure, i.e.
from tender notice via qualification and award criteria to information on award decision
Effective review mechanisms, including interim measures and compensation
Getting the incentives right for stakeholders
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Principles - 2
Open and competitive tendering Non-discrimination – actionable fundamental right Structuring the process to facilitate market entry – no
unnecessary barriers to entry¿¿ heavy-handed (pre-) qualification procedures
¿¿ Focusing too early on selected bidders
¿¿ Uncertainty as to the rules of the game
Excessive red tape tends to facilitate collusive practices (bid rigging)
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework - 1
Rules 2 substantive Directives, on classic and
‘special’ sectors (= utilities), revised in 2004, implementation by Member States: Jan 2006
2 Remedies Directives (1989 / 1992), currently being reviewed
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework - 2
Entities Public authorities at EU, national, regional
and local level, incl. utilities Public undertakings, incl. utilities Undertakings over which public authorities
still exercise decisive influence
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework – 3
Thresholds Goods and Services:
SDR 130,000 – central entitiesSDR 200,000 – sub central entitiesSDR 400,000 - utilities
Public Works ContractsSDR 5 million
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework – 4
Types of contracts Public supply / services / works contracts Works Concessions Framework Agreements (periodical supplies) Dynamic Purchasing Systems (completely
electronic process; open to any supplier meeting the selection criteria)
Electronic auctions
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework - 5
Procurement methods (procedures) Open tendering, Restricted tendering – all
suppliers invited to express interest Negotiated procedure (usually with prior
contract notice) only in well-defined exceptional circumstances
New: Competitive Dialogue for part. complex contracts – conduct transparent dialogue
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework – 6
Qualification and specification issues “permanent lists of qualified suppliers” – no
encouraging experiences - increasingly abandoned – too high administrative costs, out of date, not specific enough; potential barrier to entry esp. for SMEs
Tender specifications on international standards, performance-related criteria; use “or equivalent” (pro innovation)
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework – 7
Review Mechanisms Empowerment of suppliers to look after their
own rights – “private agents in the public interest to foster compliance with rules”
Key: info on award results – platform for action
Including interim measures and right to compensation if supplier’s rights infringed
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
EU procurement framework – 8
Review Mechanisms - continued No reason for alarm – surprising (or not…?) absence
of much propensity to litigate in procurement BUT: mere threat of action already induces
compliance (“risk of sanctions sharpens the mind”) In parallel: complaints to European Commission
which can take Member States to the European Court of Justice for violations of EU rules
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
International dimension - 1
EU is Member of the GPA Coverage in the GPA is subject to (bilateral)
negotiations; in practice, coverage varies depending on market access offered
Generally, EU has wide-ranging coverage commitments
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
International dimension - 2
Now standard policy to include comprehensive procurement chapter in FTAs
Increased recognition of links between trade and development
Bilateral procurement deals allow for more flexibility, i.e. less stringent procedural rules
Bilateral procurement deal can be “GPA-plus” if reciprocal level of ambition
Model character of EU-Chile FTA
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
International dimension – 3
EU is prepared to consider extensive requests from Developing Countries for differential treatment if – well-justified– objective– digressive and – verifiable
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Current topics - 1
Electronic procurement Potentially large savings, esp. on transaction
costs, but technically complex – no new barriers to entry!
In 2004 in EU, still 90% of tender notices received on paper
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Current topics - 2
Public Private Partnerships (PPPs) Key tool to attract private sector finance and
expertise, esp. for infrastructure projects (transport, public health, public safety, waste management, water distribution)
Complex technical, legal and financial arrangements sometimes call for negotiation to identify and develop best solutions
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Current topics - 3
Public Private Partnerships (PPPs) Can be concessions (risk/benefit of
exploitation), can be institutionalised PPPs (i.e. public service undertaking jointly held by a private and a public partner)
Flexibility vs. procedural straightjacket (to ensure transparency and non-discrimination)
12 May 2006Georg Roebling, DG Trade
Delhi Seminar on Gov. Procurement
Conclusions
Benefits of transparent, open and competitive tendering
Costs of introducing such a system (administrative, political)
Not incompatible with social policy objectives Getting the balance right - using the tools
offered by procurement policy carefully and skilfully