Public procurement within the European Community (European Union) has international dimensions through the plurilateral Agreement on Government Procurement (GPA), negotiated in parallel with the Uruguay Round negotiations leading to the establishment of the World Trade Organisation (WTO).
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Background on WTO GPA
General information about the Government Procurement Agreement can be found on the WTO’s web page:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The GPA entered into force on 1 January 1996. The EC and all the 27 member states of the European Community are bound by the agreement, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom (EU-15) from the beginning, the ten accession countries Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovak Republic and Slovenia since 1 May 2004 and the latest EU-entrants Bulgaria and Romania since 1 January 2007.
The other GPA states are Canada, Hong Kong (China), Iceland, Israel, Japan, Korea, Liechenstein, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland and the United States.
Although the GPA covers only a fraction of the WTO members, it includes many of the most important states in world trade terms. From an EU viewpoint it can be noted that the members of the European Economic Area (EEA), namely Iceland, Liechtenstein and Norway are parties to the GPA, as well as Switzerland surrounded by EU member states.
The WTO offers an overview of the Government Procurement Agreement on:
http://www.wto.org/english/tratop_e/gproc_e/gpa_overview_e.htm
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European Union and GPA
The European Community approved, among other things, the Government Procurement Agreement by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (published on the Official Journal 23.12.2994 L 336/1).
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Procurement Directive and GPA
The relationship between the Procurement Directive 2004/18/EC and the WTO Government Procurement Agreement is explained in Directive Recital 7. The Recital refers to the Council Decision and it states that the GPA does not have direct effect.
The Procurement Directive has been drafted with the GPA in mind. The contracting authorities applying the Procurement Directive should therefore be in conformity with the GPA.
What about the opposite? The last sentence of Recital 7 brings a lingering doubt to the fore: What if the GPA is more favourable to tenderers from third countries than the Procurement Directive?
Recital 7 wants to prevent cases of reverse discrimination, stating that the coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement:
Recital 7 (WTO GPA)
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
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Article 5 Procurement Directive
Article 5 of the Procurement Directive 2004/18/EC sets out the principle mentioned in Recital 7. The conditions between the EC (EU) member states shall be as favourable as with regard to economic operators from third countries under the GPA.
The member states shall consult (if problems occur) within the Advisory Committee for Public Contracts referred to in Article 77 on the measures to be taken:
(TITLE II
RULES ON PUBLIC CONTRACTS
CHAPTER I
General provisions)
Article 5
Conditions relating to agreements concluded within the World Trade Organisation
For the purposes of the award of contracts by contracting authorities, Member States shall apply in their relations conditions as favourable as those which they grant to economic operators of third countries in implementation of the Agreement on Government Procurement (hereinafter referred to as ‘the Agreement’), concluded in the framework of the Uruguay Round multilateral negotiations. Member States shall, to this end, consult one another within the Advisory Committee for Public Contracts referred to in Article 77 on the measures to be taken pursuant to the Agreement.
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Advisory Committee
Article 77 of the Procurement Directive is the basic provision on the Advisory Committee for Public Contracts:
Article 77
Advisory Committee
1. The Commission shall be assisted by the Advisory Committee for Public Contracts set up by Article 1 of Decision 71/306/EEC (1) (hereinafter referred to as ‘the Committee’).
2. Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC shall apply, in compliance with Article 8 thereof.
3. The Committee shall adopt its rules of procedure.
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Council Decision 71/306/EEC
The consolidated version (15 January 1977) of Council Decision 71/306/EEC of 26 July 1971 setting up an Advisory Committee for Public Works Contracts (OJ 16.8.1971 L 185/15) is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1971D0306:19770115:EN:PDF
Since 1977 the Advisory Committee for Public Works Contracts is known as the Advisory Committee for Public Contracts.
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Council Decision 1999/468/EC
The consolidated version (23 July 2006) of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (OJ 17.7.1999 L 184/23) is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1999D0468:20060723:EN:PDF
Article 3 of the Decision sets out the rules concerning the advisory procedure (advisory committee), Article 7 general rules concerning implementing committees and Article 8 refers to implementing measures potentially exceeding the powers of the Commission.
Ralf Grahn
Showing posts with label WTO. Show all posts
Showing posts with label WTO. Show all posts
Monday, 29 December 2008
Thursday, 6 November 2008
EU Public Procurement Directive principles
We continue to look at the context of and the reasons for the EU Procurement Directive 2004/18/EC in the light of the Preamble.
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WTO Agreement on Government Procurement (GPA)
The Government Procurement Agreement (GPA) was been negotiated alongside the multilateral trade negotiations within the World Trade Organization (WTO), but it is not an agreement binding on all WTO members. It is a plurilateral agreement, in force between the European Community (27 member states), Hong Kong (China), Iceland, Israel, Japan, Korea, Liechtenstein, (the Netherlands with respect to) Aruba, Norway, Singapore, Switzerland and the United States of America.
For more information on the GPA you can go to the WTO web pages, starting with:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The seventh recital of the Procurement Directive Preamble refers to the WTO GPA, binding on i. a. all members of the European Economic Area (EEA):
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994) (1), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
(1) The GPA was published in the Official Journal 23.12.1994 L 336/1.
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Technical dialogue
The eight recital of the Procurement Directive Preamble refers to a technical dialogue preceding a procedure for the award of a contract:
(8) Before launching a procedure for the award of a contract, contracting authorities may, using a technical dialogue, seek or accept advice which may be used in the preparation of the specifications provided, however, that such advice does not have the effect of precluding competition.
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Separate or joint contracts
Joint or separate contract awards are allowed on certain criteria, as mentioned in the ninth recital of the Procurement Directive Preamble. The possibility to award smaller lots and joint contracts was repeated in the June 2008 Communication, European Code of Best Practices Facilitating Access by SMEs to Public Procurement:
(9) In view of the diversity of public works contracts, contracting authorities should be able to make provision for contracts for the design and execution of work to be awarded either separately or jointly. It is not the intention of this Directive to prescribe either joint or separate contract awards. The decision to award contracts separately or jointly must be determined by qualitative and economic criteria, which may be defined by national law.
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Public works contract
Public works contracts are defined and delimited in the tenth recital of the Procurement Directive Preamble:
(10) A contract shall be deemed to be a public works contract only if its subject matter specifically covers the execution of activities listed in Annex I, even if the contract covers the provision of other services necessary for the execution of such activities. Public service contracts, in particular in the sphere of property management services, may, in certain circumstances, include works. However, insofar as such works are incidental to the principal subject-matter of the contract, and are a possible consequence thereof or a complement thereto, the fact that such works are included in the contract does not justify the qualification of the contract as a public works contract.
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Framework agreement
The eleventh recital refers to a Community definition of framework agreements. Generally, these framework agreements should not be concluded for more than four years:
(11) A Community definition of framework agreements, together with specific rules on framework agreements concluded for contracts falling within the scope of this Directive, should be provided. Under these rules, when a contracting authority enters into a framework agreement in accordance with the provisions of this Directive relating, in particular, to advertising, time limits and conditions for the submission of tenders, it may enter into contracts based on such a framework agreement during its term of validity either by applying the terms set forth in the framework agreement or, if all terms have not been fixed in advance in the framework agreement, by reopening competition between the parties to the framework agreement in relation to those terms. The reopening of competition should comply with certain rules the aim of which is to guarantee the required flexibility and to guarantee respect for the general principles, in particular the principle of equal treatment. For the same reasons, the term of the framework agreements should not exceed four years, except in cases duly justified by the contracting authorities.
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E-procurement
The twelfth recital underlines the benefits of electronic procurement:
(12) Certain new electronic purchasing techniques are continually being developed. Such techniques help to increase competition and streamline public purchasing, particularly in terms of the savings in time and money which their use will allow. Contracting authorities may make use of electronic purchasing techniques, providing such use complies with the rules drawn up under this Directive and the principles of equal treatment, non-discrimination and transparency. To that extent, a tender submitted by a tenderer, in particular where competition has been reopened under a framework agreement or where a dynamic purchasing system is being used, may take the form of that tenderer's electronic catalogue if the latter uses the means of communication chosen by the contracting authority in accordance with Article 42.
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Electronic purchasing system
The thirteenth recital of the Procurement Directive Preamble announces rules for an electronic dynamic purchasing system, open to all qualified tenderers:
(13) In view of the rapid expansion of electronic purchasing systems, appropriate rules should now be introduced to enable contracting authorities to take full advantage of the possibilities afforded by these systems. Against this background, it is necessary to define a completely electronic dynamic purchasing system for commonly used purchases, and lay down specific rules for setting up and operating such a system in order to ensure the fair treatment of any economic operator who wishes to take part therein. Any economic operator which submits an indicative tender in accordance with the specification and meets the selection criteria should be allowed to join such a system. This purchasing technique allows the contracting authority, through the establishment of a list of tenderers already selected and the opportunity given to new tenderers to take part, to have a particularly broad range of tenders as a result of the electronic facilities available, and hence to ensure optimum use of public funds through broad competition.
***
Electronic auctions
When the object of a contract is quantifiable (figures or percentages), electronic auctions may be used, as indicated in the fourteenth recital of the Procurement Directive Preamble:
(14) Since use of the technique of electronic auctions is likely to increase, such auctions should be given a Community definition and governed by specific rules in order to ensure that they operate in full accordance with the principles of equal treatment, non-discrimination and transparency. To that end, provision should be made for such electronic auctions to deal only with contracts for works, supplies or services for which the specifications can be determined with precision. Such may in particular be the case for recurring supplies, works and service contracts. With the same objective, it must also to be possible to establish the respective ranking of the tenderers at any stage of the electronic auction. Recourse to electronic auctions enables contracting authorities to ask tenderers to submit new prices, revised downwards, and when the contract is awarded to the most economically advantageous tender, also to improve elements of the tenders other than prices. In order to guarantee compliance with the principle of transparency, only the elements suitable for automatic evaluation by electronic means, without any intervention and/or appreciation by the contracting authority, may be the object of electronic auctions, that is, only the elements which are quantifiable so that they can be expressed in figures or percentages. On the other hand, those aspects of the tenders which imply an appreciation of non-quantifiable elements should not be the object of electronic auctions. Consequently, certain works contracts and certain service contracts having as their subject-matter intellectual performances, such as the design of works, should not be the object of electronic auctions.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on 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):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
***
WTO Agreement on Government Procurement (GPA)
The Government Procurement Agreement (GPA) was been negotiated alongside the multilateral trade negotiations within the World Trade Organization (WTO), but it is not an agreement binding on all WTO members. It is a plurilateral agreement, in force between the European Community (27 member states), Hong Kong (China), Iceland, Israel, Japan, Korea, Liechtenstein, (the Netherlands with respect to) Aruba, Norway, Singapore, Switzerland and the United States of America.
For more information on the GPA you can go to the WTO web pages, starting with:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The seventh recital of the Procurement Directive Preamble refers to the WTO GPA, binding on i. a. all members of the European Economic Area (EEA):
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994) (1), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
(1) The GPA was published in the Official Journal 23.12.1994 L 336/1.
***
Technical dialogue
The eight recital of the Procurement Directive Preamble refers to a technical dialogue preceding a procedure for the award of a contract:
(8) Before launching a procedure for the award of a contract, contracting authorities may, using a technical dialogue, seek or accept advice which may be used in the preparation of the specifications provided, however, that such advice does not have the effect of precluding competition.
***
Separate or joint contracts
Joint or separate contract awards are allowed on certain criteria, as mentioned in the ninth recital of the Procurement Directive Preamble. The possibility to award smaller lots and joint contracts was repeated in the June 2008 Communication, European Code of Best Practices Facilitating Access by SMEs to Public Procurement:
(9) In view of the diversity of public works contracts, contracting authorities should be able to make provision for contracts for the design and execution of work to be awarded either separately or jointly. It is not the intention of this Directive to prescribe either joint or separate contract awards. The decision to award contracts separately or jointly must be determined by qualitative and economic criteria, which may be defined by national law.
***
Public works contract
Public works contracts are defined and delimited in the tenth recital of the Procurement Directive Preamble:
(10) A contract shall be deemed to be a public works contract only if its subject matter specifically covers the execution of activities listed in Annex I, even if the contract covers the provision of other services necessary for the execution of such activities. Public service contracts, in particular in the sphere of property management services, may, in certain circumstances, include works. However, insofar as such works are incidental to the principal subject-matter of the contract, and are a possible consequence thereof or a complement thereto, the fact that such works are included in the contract does not justify the qualification of the contract as a public works contract.
***
Framework agreement
The eleventh recital refers to a Community definition of framework agreements. Generally, these framework agreements should not be concluded for more than four years:
(11) A Community definition of framework agreements, together with specific rules on framework agreements concluded for contracts falling within the scope of this Directive, should be provided. Under these rules, when a contracting authority enters into a framework agreement in accordance with the provisions of this Directive relating, in particular, to advertising, time limits and conditions for the submission of tenders, it may enter into contracts based on such a framework agreement during its term of validity either by applying the terms set forth in the framework agreement or, if all terms have not been fixed in advance in the framework agreement, by reopening competition between the parties to the framework agreement in relation to those terms. The reopening of competition should comply with certain rules the aim of which is to guarantee the required flexibility and to guarantee respect for the general principles, in particular the principle of equal treatment. For the same reasons, the term of the framework agreements should not exceed four years, except in cases duly justified by the contracting authorities.
***
E-procurement
The twelfth recital underlines the benefits of electronic procurement:
(12) Certain new electronic purchasing techniques are continually being developed. Such techniques help to increase competition and streamline public purchasing, particularly in terms of the savings in time and money which their use will allow. Contracting authorities may make use of electronic purchasing techniques, providing such use complies with the rules drawn up under this Directive and the principles of equal treatment, non-discrimination and transparency. To that extent, a tender submitted by a tenderer, in particular where competition has been reopened under a framework agreement or where a dynamic purchasing system is being used, may take the form of that tenderer's electronic catalogue if the latter uses the means of communication chosen by the contracting authority in accordance with Article 42.
***
Electronic purchasing system
The thirteenth recital of the Procurement Directive Preamble announces rules for an electronic dynamic purchasing system, open to all qualified tenderers:
(13) In view of the rapid expansion of electronic purchasing systems, appropriate rules should now be introduced to enable contracting authorities to take full advantage of the possibilities afforded by these systems. Against this background, it is necessary to define a completely electronic dynamic purchasing system for commonly used purchases, and lay down specific rules for setting up and operating such a system in order to ensure the fair treatment of any economic operator who wishes to take part therein. Any economic operator which submits an indicative tender in accordance with the specification and meets the selection criteria should be allowed to join such a system. This purchasing technique allows the contracting authority, through the establishment of a list of tenderers already selected and the opportunity given to new tenderers to take part, to have a particularly broad range of tenders as a result of the electronic facilities available, and hence to ensure optimum use of public funds through broad competition.
***
Electronic auctions
When the object of a contract is quantifiable (figures or percentages), electronic auctions may be used, as indicated in the fourteenth recital of the Procurement Directive Preamble:
(14) Since use of the technique of electronic auctions is likely to increase, such auctions should be given a Community definition and governed by specific rules in order to ensure that they operate in full accordance with the principles of equal treatment, non-discrimination and transparency. To that end, provision should be made for such electronic auctions to deal only with contracts for works, supplies or services for which the specifications can be determined with precision. Such may in particular be the case for recurring supplies, works and service contracts. With the same objective, it must also to be possible to establish the respective ranking of the tenderers at any stage of the electronic auction. Recourse to electronic auctions enables contracting authorities to ask tenderers to submit new prices, revised downwards, and when the contract is awarded to the most economically advantageous tender, also to improve elements of the tenders other than prices. In order to guarantee compliance with the principle of transparency, only the elements suitable for automatic evaluation by electronic means, without any intervention and/or appreciation by the contracting authority, may be the object of electronic auctions, that is, only the elements which are quantifiable so that they can be expressed in figures or percentages. On the other hand, those aspects of the tenders which imply an appreciation of non-quantifiable elements should not be the object of electronic auctions. Consequently, certain works contracts and certain service contracts having as their subject-matter intellectual performances, such as the design of works, should not be the object of electronic auctions.
***
Procurement Directive 2004/18/EC
A notice to those readers, who want to study the Procurement Directive.
Throughout, because of amendments, we refer to the consolidated version of 1 January 2008 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on 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):
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
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