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Simplifying the rules for contracting authorities to ensure better quality and value for money

Simplifying the rules for contracting authorities to ensure better quality and value for money
Published on: 21/03/2016
European legislation for over 250 000 public contracting authorities is designed to open up the EU's public procurement market to competition, prevent "buy national" policies and promote the free movement of goods and services. These rules and procedures will be simplified under the new public procurement directives.

European Commission initiatives for simplifying public procurement procedures include:

New types of selection procedures enabling more choice, easier access and better results 

The new Directives give contracting authorities more flexibility, greater options and new ways to procure goods and services. Contracting authorities will have much greater freedom to choose the type and design of the procedure best suited to their needs. In particular, they can utilise negotiation procedures, which are often used for complex contracts such as large infrastructure projects (where the technical specifications cannot be defined at the outset) and which have been broadened and made more flexible:

  1. The new competitive procedure with negotiation (inviting at least 3 candidates to a dialogue) replaces the current negotiated procedure with prior publication of a contract notice on the condition that the authorities can justify its use on one of the following grounds:
  •  when a product or service cannot be purchased ready-made from off the shelf
  •  where the requirements include design or innovative solutions
  • where the contract cannot be awarded without prior negotiation
  • specific circumstances relating to the nature, the complexity or the legal and financial make-up, or because of the risks attached to them or to technical standards
  • where only irregular or unacceptable tenders have been received.

This new procedure provides contracting authorities with effective instruments to obtain the best possible procurement outcome in the negotiations to ensure fairness, transparency and efficiency.

  1. The competitive dialogue can also be used in the same cases as the new competitive procedure with negotiation.
  2. The new innovation partnerships are meant to address societal challenges and allow contracting authorities to procure highly innovative solutions by offering a smart combination of research activities and purchase elements.

These new elements enable contracting authorities to find the best solutions for their needs. At the same time, the strengthened competitive elements of the revised procurement rules will bring savings and contribute to the smooth functioning of the internal market. Moreover, the new rules will help to modernise public administrations in Europe, enabling them to provide better services for EU citizens. 

More flexible and efficient proceedings

The rigid structure of the current procurement rules makes the achievement of flexible solutions difficult. In the future, contracting authorities will have more freedom to organise contract award procedures in a more flexible and efficient way. For example:

  • the new rules speed up procedures due to shorter minimum time-limits for participation and submission of tenders, which will prevent long delays in the delivery of goods and services.
  • contracting authorities can choose the best quality-price ratio (‘value for money’),  because EU countries are free to eliminate price as the sole award criterion.
  • a new standard electronic European Single Procurement Document allows for self-certification, replacing the submission of documentation at the qualification stage. Contracting authorities will only have to check the actual documentation of the winning tenderer at the end of the procedure, prior to the award decision. For this purpose, a structured data exchange model is available for public buyers.
  • contracting authorities can require that goods, services and works comply with the social standards or environmental standards they have set for procurement with the help of environmental or fair-trade labels.
  • contracting authorities can exclude a bidder from the procedure if they have previously shown  significant or persistent deficiencies during the execution of a public contract.
  • in assessing tenders, contracting authorities may take into account the qualification and experience of the staff assigned to perform the contract where this can significantly impact the level of performance, in particular in the provision of service contracts.

Additional flexibility for local and regional authorities

The new Directive 2014/24/EU gives Member States the ability to opt for a simplified publication system for so-called sub-central contracting authorities, i.e. all contracting authorities below the central government level such as municipalities, regional authorities or bodies governed by public law. Instead of publishing a full EU-wide contract notice for each contract above the threshold, these authorities can advertise their contracts through less burdensome prior-information notices with an indication that:

  • the contract will be awarded without further publication of a contract notice
  • interested companies must ask to be kept directly informed about the procedure.

Cooperation projects between public entities may take two distinct forms:

 1) with controlled entities (e.g. a local administration with a controlled local public transport agency)

In this case, the controlled entity has to perform 80% of its works for the controlling contracting authority or authorities and only a limited part (20%) for private bodies and no direct private capital participation is permitted in the controlled entity.

2) cooperation between independent contracting authorities (e.g. local administration with regional administration)

All the participants in the cooperation project must be contracting authorities and only a limited part (20%) of the goods, works or services covered by the cooperation may be performed for others than the involved authorities on the open market.

Cross-border joint procurement

Cross-border joint procurement can lead to savings and better results by taking full advantage of the EU's single market. The new public procurement rules facilitate the bundling of purchases by contracting authorities by:

  • using cross-border and joint procurement procedures or
  • purchasing through a central purchasing body.

In cooperation projects between public entities, the activities that may be performed by private operators without tendering procedures will be limited to 20%, and direct private capital participation in the public entities cooperating is excluded.

Cross-border check of procurement information by public administrations

Public procurement authorities in the EU can also use the Internal Market Information System (IMI) to verify the information and documentation they receive from companies in other EU countries. Once registered in the system and depending on the national organisation of the use of IMI, national public authorities can:

  • remove doubts surrounding the authenticity of a document or certificate provided by a tenderer
  • check that a company has the required technical specifications (fulfils national standards, labels, conformity assessments, etc.) or is suitable for carrying out the contract in question
  • verify that a company does not fall under any grounds for exclusion such as having been convicted for fraud
  • confirm the information from a previously submitted European standardised self-declaration of a tender.

For more information, please visit the IMI website and/or contact your national IMI coordinator

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The new rules send a strong signal in favour of reinforcing the internal market. They help set up a healthy economic environment for the benefit of all economic actors, including public authorities.

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Find out more on public procurement reform: Slashing administrative burden, improving access for SMEs, preventing corruption and allowing for social and environmental considerations