New EU public procurement rules: Less bureaucracy, higher efficiency Published on: 20/11/2015, Last update: 25/05/2016
Since 18 April 2016, three directives on public procurement and concessions adopted in 2014 have profoundly changed the way Member States and public authorities spend a large part of the €1.9 trillion used on European public procurement every year.
Thanks to the new directives, public procurement in Europe will be made more efficient with smarter rules and digitalisation. Authorities that have already made the transition to eProcurement report savings between 5% and 20%. Given the size of the total procurement market in the EU, each 5% saved could return around €100 billion to the public purse.
But the success of the new legislation also depends on its effective enforcement in Member States and the readiness of the 250 000 public buyers in the EU to capitalise on the benefits of the digital revolution, cut red tape and make procurement processes more efficient and more business-friendly to the benefit of all citizens.
The reform of public procurement has introduced new elements in four main areas:
1. Higher efficiency, more eProcurement and easier participation for SMEs
- The new rules, including a new electronic self-declaration for bidders, pave the way for the digitalisation of public procurement, which will considerably increase the efficiency of the public procurement system and lead to billions in public savings.
- By limiting the turnover requirements and introducing the option of dividing tenders into lots, it is now easier for small and medium-sized enterprises (SMEs) to bid on public contracts. Moreover, the new electronic self-declarations will primarily benefit SMEs.
2. Modernising public services and slashing administrative burden
- Simpler procedures for contracting authorities will open up the EU's public procurement market, prevent ‘buy national‘ policies and promote the free movement of goods and services. As a result, contracting authorities will obtain better value for money.
- Greater flexibility of the new legislation includes also the possibility of choosing the best quality-price ratio (value for money) because Member States are free to eliminate price as the sole award criterion
- To encourage innovation in public administration, contracting authorities can cooperate with a company (selected in a competitive tender procedure) to develop an innovative product, which does not exist on the market.
- New rules on concessions will increase competition allowing Member States to achieve better value for money when mobilising private capital and know-how to complement public resources and enable new investment in public infrastructure.
3. Addressing societal challenges through public procurement
- By using their purchasing power to choose socially responsible goods, public authorities can set a positive example and encourage enterprises to make wider use of social standards in the management, production and provision of services.
- Fresh opportunities have also been opened up for public authorities to spur eco-innovation by using new award criteria in contract notices that place more emphasis on environmental considerations.
4. Preventing corruption: Creating a culture of integrity and fair play
The new directives set the proper framework for the prior publication of tenders, clear and unbiased technical specifications, equal treatment of bidders in all stages of the process, and objective evaluation of tenders.
The new directives contribute to the Juncker Commission’s priorities of ‘A deeper and fairer single market’ and ‘A new boost for jobs, growth and investment’. Specifically:
- The new rules will facilitate cross-border procurement and foster the free movement of goods and services. More transparency and simplified procedures will slash administrative burden and favour fair play and legal certainty. This will help promote a business and consumer-friendly environment and a deeper and fairer single market.
- More transparent, fair and competitive rules will lead to increased business opportunities, greater competition, make it easier for SMEs to access public procurement markets, and boost jobs, growth and investment.
The public procurement package also contributes to the Commission´s #REFIT Better Regulation agenda. Existing rules have been made simpler, increasing the efficiency of the Europe public procurement system.