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Statement by the European Commission on Bombardier/Siemens and the role of EU public procurement rules
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Chantal Hughes, European Commission Spokeswoman for the Internal market said today:

    It's too easy to say that the job losses in Derby are "the EU's fault" and that "it's because of EU rules that Bombardier lost out".

    And it would be the wrong answer to conclude that in public contracts, domestic suppliers should always be chosen.

    European public procurement rules exist to ensure that taxpayers get the best value for money. They ensure open and competitive procedure and no discrimination.

    Transparent and competitive procurement procedures deliver savings of 4-5% (or £18b  on the £380b  that is tendered at EU level) as well as better quality procurement outcomes (from an evaluation published on 24 June 2011).
    They exist to eliminate favouritism and backhand deals where the taxpayer and citizens stand to lose out because the services provided are more expensive and of less good quality than you would have got with an open and competitive procedure.

    The UK has benefitted enormously from these rules – allowing its companies to offer their services across Europe on an equal playing field.

    Analysis of cross-border procurement trade reveals that UK companies are very successful in competing in cross-border procurement markets.

    Of all public procurement contracts that are awarded to companies from other Member States, UK companies win 17% of them (only German companies win more - 26%).

    Of course, the system only works if all countries play by the rules.

    But it's too easy to say that the French choose French suppliers, the Germans choose German suppliers and only the UK are naïve enough to choose non-UK suppliers thus putting themselves at a disadvantage.

    When the rules are not being respected, the Commission intervenes. Just see the number of infringement cases on public procurement, taking to task – and ultimately to court - countries that don't administer the rules properly : it’s proof that we don’t allow those who act by favouring one company over the other to win.

    See the recent very public Eurostar case and its choice to award a contract to Siemens rather than Alstom – the company chosen was neither French or British.

    And more importantly, look at the figures:

    In terms of openness to cross-border suppliers, the UK market is not markedly more open that other large Member States such as France and Germany.

    Only 1.5% of the public contracts that the UK publishes at EU level end up being awarded to suppliers from other Member States (compared to 0.9% for France and 1.5% for Germany).

    We all stand to gain from mutually open procurement markets. The answer is not to start creating new barriers within the EU which would have detrimental impacts across the board: EU companies would lose out on opportunities, and taxpayers could end up paying more for less good quality services.

    Whereas we are ensuring a level playing field at EU level, it does not exist at a global level. That's why the Commission will be coming forward with a proposal in that sense in the coming months.

    This proposal will aim at ensuring that EU companies have a greater opportunity to offer their services outside the EU (for example in China, the USA and Japan), in the same way we allow companies based outside the EU to offer their services in the EU."


    For more information, please contact the London press office on 020 7973 1971.
    Please note: all amounts expressed in sterling are for information purposes only.

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    Last update: 06/07/2011  |Top