Modernisation of the European Public Procurement Market
Posted by Tim Williams on February 1, 2011
Public procurement accounts for roughly 17% of the European Union’s GDP. In times of tight budgets and economic difficulties in many Member States, public procurement policy must ensure the most efficient use of public funds, with a view to supporting growth and job creation. This would require flexible and user-friendly tools that make transparent and competitive contract awards as easy as possible for European public authorities and their suppliers. With these objectives in mind, the European Commission has launched a consultation which will focus on the modernisation of the rules, tools and methods for public procurement. The deadline for responses to the Green Paper is 18 April 2011.
Internal Market and Services Commissioner Michel Barnier said: “We need to clarify public procurement rules to make life easier for both public authorities and companies bidding for contracts in Europe. Access of smaller companies to procurement markets, reducing red tape, or promoting European cross-border procurement will be under the spotlight during the consultation. My ambition is also to make sure that public procurement can help job creation, innovation, and protection of the environment.”
Public procurement accounts for roughly 17% of the EU’s GDP. Putting this 17% to the best possible use is essential for re-launching our economy and creating jobs, even more so in a period of crisis. Stakeholders have voiced demands for a review of the EU public procurement system to streamline its procedures and better adapt them to new challenges, e.g. the need for a more efficient use of public funds as well as taking into account social and environmental concerns.
Companies, especially SMEs (estimated to secure between 31% and 38% in terms of total contract value of public procurement), need better and easier access to public contracts throughout the EU so that they can reap the full benefits of a truly European procurement market. Similarly, procurers need simple and flexible procedures allowing them to contribute effectively to the achievement of the common objectives of the Europe 2020 strategy: fostering innovation, protecting the environment, fighting climate change and social exclusion.
What is the public consultation about?
The Green Paper identifies a number of key areas for possible reform and asks for stakeholders’ views on options for legislative changes. Some of the issues covered are the following:
- Do the current procedures need to be simplified, in particular for small local and regional authorities? How can this usefully be done without jeopardizing essential guarantees for transparency and non-discrimination amongst bidders?
- How can we reduce red tape for economic operators, notably SMEs? How can bidding across intra-European borders be facilitated?
- Under which conditions should contracts between public authorities be exempted from the application of EU public procurement rules?
- Should the EU public procurement rules be modified to allow other policy objectives such as promotion of innovation or environmental or social considerations to be better taken into account? For instance, should there be EU rules establishing obligations to buy only products respecting certain environmental conditions or to set aside a certain percentage of the budget for innovative goods and services? Are customised rules needed for the procurement of social services of general economic interest, to better match the specificities of these services?
- Do we need stricter rules or better safeguards to prevent favouritism, corruption or conflicts of interest?
- How can efficient competition in procurement markets be guaranteed? For instance, how could the development of dominant suppliers, bid rigging or market sharing between bidders be avoided?
- What should be done to improve the access of European undertakings to third country public procurement markets?
Related initiatives and further steps
In addition to the Green Paper, the Commission is currently undertaking a comprehensive evaluation to take stock of the efficiency and cost-effectiveness of the current European public procurement rules.
The results of this evaluation and of the Green Paper consultation will be discussed at a high level conference on public procurement reform, planned for 30 June 2011 in Brussels. All work streams will then feed into any appropriate legislative proposals.
The EU public procurement rules provide for contract award procedures ensuring transparency, equal access and fair competition within the European procurement market for public contracts above a certain amount. The current EU legislative framework for Public Procurement, Directives 2004/17/EC and 2004/18/EC, is the latest step in a long evolution that started in 1971. These Directives aim primarily to ensure that the economic operators enjoy the basic freedoms (free movement of goods, capital, services and people).
Responses to the Green Paper should be sent to the following address:
MARKT-CONSULT-PP-REFORM@ec.europa.eu no later than 18 April 2011.
The Green Paper can be found at:
More information on EU public procurement policy:
Frequently asked questions MEMO/11/48.