Commission seeks revamp of public procurement rules, by Ian Wishart (europeanvoice.com)

The European Commission is considering updating rules on the awarding of public contracts to encourage the public sector to favour companies who meet goals on the environment or innovation.

 Michel Barnier, the European commissioner for the internal market, is to launch a green paper on 27 January, paving the way for a complete overhaul of public procurement rules.

 The aim of the consultation is to see whether public procurement, which has an annual turnover of about €2,000 billion, accounting for about 17% of the EU's gross national product, can become more effective, less expensive and more open to small and medium-sized companies.

 Barnier said : “ One of our objectives is to try to get the balance right between using public procurement to support other policies while simplifying, increasing efficiency and ensuring fair competition. ”

 Public procurement – the process by which the public sector awards contracts to companies for the supply of goods or services – is regulated by EU legislation for all contracts above certain levels, to encourage a culture of competition and transparency.

Critics say that the EU's rules are hampered by red tape and inflexibility, which can reduce the effectiveness of some public contracts and slow down the whole tendering procedure.

They have demanded that the system be reviewed and Barnier is giving it special attention in his internal-market portfolio.

He is known to be keen to use public procurement to support societal objectives, notably those contained in the EU 2020 strategy, such as green procurement and innovation.

But this aim is likely to run into opposition from business lobbies, which do not want public bodies to set conditions on the awarding of public contracts apart from the value-for-money criteria.

Business concerns

Businesses are concerned that binding targets could harm competition by providing public authorities with excuses to favour certain suppliers.

BusinessEurope, the employers' federation, is wary of changes to the current public procurement rules, which date from 2004.

A spokeswoman said that the current framework should be preserved, alongside efforts for a more uniform enforcement of the existing rules.

She said : “ An important aim of the Commission with this evaluation process is to enable public contracts to be put to better use in support of other policies, for example, green growth, social objectives, innovation.

Whilst we believe that public procurement can contribute to these policies, we do not believe it necessary to make amendments to the public procurement legislation. ”

The spokeswoman said that the current legal framework already allowed for a wide range of objectives to be taken into account, including environmental goals, so long as they were “linked to the specifications or to the object of the contract”. She said the Commission should be working instead to explain the possibilities in the existing legal framework to contracting authorities, and to disseminate best practice.

“ By adding more rules and more layers to the existing public procurement legal framework, the Commission risks hampering its objectives of trying to revitalise the internal market ” she said.

The green paper will also ask about how successfully public procurement rules prevent corruption and distortions of competition.

The Commission expects to propose legislative proposals at the end of this year or at the beginning of 2012.

Alongside the green paper, the Commission will look at updating rules on public procurement in the defence sector. It will also consider reciprocal arrangements in public procurement at an international level, to eliminate a perceived imbalance in which foreign companies bid for and win contracts in the EU while EU companies encounter difficulties in winning contracts outside Europe.

Source : http://www.europeanvoice.com/article/imported/commission-seeks-revamp-of-public-procurement-rules/69986.aspx