Tuesday, 10 February 2009

EU procurement law: Priority services (Annex II A)

A functioning internal market is the mobilising idea behind the evolving EU rules for public procurement. Even if our economies have become increasingly based on services, cross-border trade in services has been lagging behind.

The Procurement Directive 2004/18/EC marks a step on the way, with coordinated procurement procedures for larger contracts of a nature adapted to competition more than locally.

In this post we look at these so called priority services, listed in Annex II A.


Article 20

The European Community (European Union) Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114), replaced the old Services Procurement Directive, Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 24.7.1992 L 209/1).

Article 20 of the Procurement Directive 2004/18/EC distinguishes the so called priority services, which are subject to the detailed provisions of the Directive:

Arrangements for public service contracts

Article 20
Service contracts listed in Annex II A

Contracts which have as their object services listed in Annex II A shall be awarded in accordance with Articles 23 to 55.


Definition of service contract

Public service contracts are defined in Article 1(2)(d) of the Procurement Directive 2004/18/EC:

(d) ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.

A public contract having as its object both products and services within the meaning of Annex II shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.

A public contract having as its object services within the meaning of Annex II and including activities within the meaning of Annex I that are only incidental to the principal object of the contract shall be considered to be a public service contract.


Priority services

Recital 19 of the Procurement Directive explains the Upstairs ─ Downstairs solution concerning public service contracts.

The detailed provisions of the Procurement Directive do not encompass all services. For the time being the contracts with most potential for cross-border trade in the internal market were made subject to the application of the detailed award procedures.

The distinctions have been made on two grounds. Contract value means that the largest contracts are included (thresholds). The type or nature of service determines the applicable rules.

The current situation is not the final word on the matter. The Commission monitors developments in the internal market, which may lead to legislative proposals in the future:

(19) As regards public service contracts, full application of this Directive should be limited, for a transitional period, to contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised. Contracts for other services need to be monitored during this transitional period before a decision is taken on the full application of this Directive. In this respect, the mechanism for such monitoring needs to be defined. This mechanism should, at the same time, enable interested parties to have access to the relevant information.


Applicable provisions

The priority services are listed in Annex II A. These public service contracts are awarded in accordance with Articles 23 to 55 of the Procurement Directive.

Here is an overview of the applicable provisions relating to priority services:

Specific rules governing specifications and contract documents

Article 23 — Technical specifications
Article 24 — Variants
Article 25 — Subcontracting
Article 26 — Conditions for performance of contracts
Article 27 — Obligations relating to taxes, environmental protection, employment protection provisions and working conditions


Article 28 — Use of open, restricted and negotiated procedures and of competitive dialogue
Article 29 — Competitive dialogue
Article 30 — Cases justifying use of the negotiated procedure with prior publication of a contract notice
Article 31 — Cases justifying use of the negotiated procedure without publication of a contract notice
Article 32 — Framework agreements
Article 33 — Dynamic purchasing systems
Article 34 — Public works contracts: particular rules on subsidized housing schemes

Rules on advertising and transparency

Section 1 — Publication of notices

Article 35 — Notices
Article 36 — Form and manner of publication of notices
Article 37 — Non-mandatory publication

Section 2 — Time limits

Article 38 — Time limits for receipt of requests to participate and for receipt of tenders
Article 39 — Open procedures: Specifications, additional documents and information

Section 3 — Information content and means of transmission

Article 40 — Invitations to submit a tender, participate in the dialogue or negotiate
Article 41 — Informing candidates and tenderers

Section 4 — Communication

Article 42 — Rules applicable to communication

Section 5 — Reports

Article 43 — Content of reports

Conduct of the procedure

S e c t i o n 1 — G e n e r a l p r o v i s i o n s

Article 44 — Verification of the suitability and choice of participants and award of contracts

S e c t i o n 2 — C r i t e r i a f o r q u a l i t a t i v e s e l e c t i o n

Article 45 — Personal situation of the candidate or tenderer
Article 46 — Suitability to pursue the professional activity
Article 47 — Economic and financial standing
Article 48 — Technical and/or professional ability
Article 49 — Quality assurance standards
Article 50 — Environmental management standards
Article 51 — Additional documentation and information
Article 52 — Official lists of approved economic operators and certification by bodies established under public or private law

S e c t i o n 3 — A w a r d o f t h e c o n t r a c t

Article 53 — Contract award criteria
Article 54 — Use of electronic auctions
Article 55 — Abnormally low tenders


Annex II A priority services

Annex II concerning public service contracts is divided into two parts, Annex II A for priority services and Annex II B for non-priority services.

The priority services mentioned in Annex II A are (as amended by Commission Regulation (EC) No 213/2008 of 28 November 2007, OJEU 15.3.2008 L 74/1). In this overview they are given without the applicable CPC nomenclature (or the helpful CPV, Common Procurement Vocabulary references):

1 Maintenance and repair services

2 Land transport services (except for rail transport services covered by category 18), including armoured car services, and courier services, except transport of mail

3 Air transport services of passengers and freight, except transport of mail

4 Transport of mail by land (except for rail transport services covered by category 18) and by air

5 Telecommunications services

6 Financial services:

(a) Insurance services

(b) Banking and investment services (except financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments, and central bank services, or excluded: services involving the acquisition or rental, by whatever financial procedures, of land, existing buildings, or other immovable property or concerning rights thereon; nevertheless, financial services supplied at the same time as, before or after the contract of acquisition or rental, in whatever form, are subject to the Directive).

7 Computer and related services

8 Research and development services (except research and development services other than those where the benefits accrue exclusively to the contracting authority and/or contracting entity for its use in the conduct of its own affairs on condition that the service provided is wholly remunerated by the contracting authority and/or contracting entity).

9 Accounting, auditing and bookkeeping services

10 Market research and public opinion polling services

11 Management consulting services (except arbitration and conciliation services) and related services

12 Architectural services; engineering services and integrated engineering services; urban planning and landscape engineering services; related scientific and technical consulting services; technical testing and analysis services

13 Advertising services

14 Building-cleaning services and property management services

15 Publishing and printing services on a fee or contract basis

16 Sewage and refuse disposal services; sanitation and similar services


The next procurement post on this blog is going to take a look at non-priority services (Annex II B).

Ralf Grahn