The European Commission has launched a consultation on expanding the use of electronic procurement in the internal market: European Commission acts to expand the use of e-procurement in the EU (18 October 2010, press release IP/10/1347; in English, French and German).
According to internal market and services commissioner Michel Barnier, the use of information and communication technology in public procurement increases the speed and efficiency of public purchasing while significantly cutting the costs when participating in tenders.
As often, the Commission offers background information in the form of FAQs: Frequently asked questions: e-Procurement (18 October 2010, MEMO/10/499; only in English).
The Public procurement main page of the Commission offers thematic links to various aspects of public purchasing in the internal market; also in French Marchés publics and in German Öffentliches Auftragswesen.
e-CERTIS database
The Commission is offering access to its e-CERTIS database which provides an on-line storehouse of the documents which are most frequently requested in the 27 Member States (for example, evidence of compliance with fiscal obligations or social security obligations or evidence of economic and financial standing). It allows users to identify such documents and match them with their local equivalent. The use of e-CERTIS helps business operators to reduce costs and uncertainty due to the lack of knowledge about the different certificates requested by the various national contracting authorities:
You can access the e-CERTIS webpage here. The User Guide is in English, but a brochure is available in 21 languages.
Consultation web page
The e-procurement consultation runs until 31 January 2011, and from the consultation web page you can access the Green Paper in 22 official EU languages. Here is a link to the English version:
Green Paper on expanding the use of e-Procurement in the EU; Brussels, 18.10.2010 COM(2010) 571 final (23 pages)
The consultation document is accompanied by the staff working document SEC(2010) 1214. On the consultation page it goes under the name of Evaluation Report and it can be accessed here (162 pages).
The COM and SEC documents have not yet been posted on Eur-Lex under Preparatory acts.
Target groups
Even if the consultation is open to all citizens and organisations, the Commission expects contributions particularly from member states, large procurement agencies and contracting authorities, the ICT industry, procurement specialists in the private and public sector and representatives of business trade associations.
Ralf Grahn
P.S. A Fistful of Euros describes itself as a webzine and a weblog, writing from a pan-European perspective. It is one of the best researched and most influential Euroblogs, widely read with a policy focus which engages many and affects everyone: the economy.
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Showing posts with label e-procurement. Show all posts
Showing posts with label e-procurement. Show all posts
Friday, 22 October 2010
Wednesday, 17 December 2008
EU procurement: Electronic auction
What is an electronic auction in EU procurement? What we see is typically an automated Dutch auction (reversed auction) of standard goods.
Article 1.7 of the Procurement Directive 2004/18/EC offers the following, more technical definition:
7. An ‘electronic auction’ is a repetitive process involving an electronic device for the presentation of new prices, revised downwards, and/or new values concerning certain elements of tenders, which occurs after an initial full evaluation of the tenders, enabling them to be ranked using automatic evaluation methods.
Consequently, certain service contracts and certain works contracts having as their subject-matter intellectual performances, such as the design of works, may not be the object of electronic auctions.
***
Reasons given
Recital 14 of the Procurement Directive (Classic Directive) presents the following reasons for defining and regulating electronic auctions:
(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.
***
Optional
Recital 16 of the Procurement Directive reminds us that the Community procurement legislation is harmonised, not unified. National differences and choices exist, and it is for the member states to choose if they want to employ electronic auctions:
(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.
***
Using electronic auctions
The main Procurement Directive 2004/18/EC provision concerning electronic auctions is Article 54. Having opted for electronic auctions, the transposing legislation of the member state and the procedures employed by the contracting authority must fulfil certain criteria:
Article 54
Use of electronic auctions
1. Member States may provide that contracting authorities may use electronic auctions.
2. In open, restricted or negotiated procedures in the case referred to in Article 30(1)(a), the contracting authorities may decide that the award of a public contract shall be preceded by an electronic auction when the contract specifications can be established with precision.
In the same circumstances, an electronic auction may be held on the reopening of competition among the parties to a framework agreement as provided for in the second indent of the second subparagraph of Article 32(4) and on the opening for competition of contracts to be awarded under the dynamic purchasing system referred to in Article 33.
The electronic auction shall be based:
— either solely on prices when the contract is awarded to the lowest price,
— or on prices and/or on the new values of the features of the tenders indicated in the specification when the contract is awarded to the most economically advantageous tender.
3. Contracting authorities which decide to hold an electronic auction shall state that fact in the contract notice.
The specifications shall include, inter alia, the following details:
(a) the features, the values for which will be the subject of electronic auction, provided that such features are quantifiable and can be expressed in figures or percentages;
(b) any limits on the values which may be submitted, as they result from the specifications relating to the subject of the contract;
(c) the information which will be made available to tenderers in the course of the electronic auction and, where appropriate, when it will be made available to them;
(d) the relevant information concerning the electronic auction process;
(e) the conditions under which the tenderers will be able to bid and, in particular, the minimum differences which will, where appropriate, be required when bidding;
(f) the relevant information concerning the electronic equipment used and the arrangements and technical specifications for connection.
4. Before proceeding with an electronic auction, contracting authorities shall make a full initial evaluation of the tenders in accordance with the award criterion/criteria set and with the weighting fixed for them.
All tenderers who have submitted admissible tenders shall be invited simultaneously by electronic means to submit new prices and/or new values; the invitation shall contain all relevant information concerning individual connection to the electronic equipment being used and shall state the date and time of the start of the electronic auction. The electronic auction may take place in a number of successive phases. The electronic auction may not start sooner than two working days after the date on which invitations are sent out.
5. When the contract is to be awarded on the basis of the most economically advantageous tender, the invitation shall be accompanied by the outcome of a full evaluation of the relevant tenderer, carried out in accordance with the weighting provided for in the first subparagraph of Article 53(2).
The invitation shall also state the mathematical formula to be used in the electronic auction to determine automatic rerankings on the basis of the new prices and/or new values submitted. That formula shall incorporate the weighting of all the criteria fixed to determine the most economically advantageous tender, as indicated in the contract notice or in the specifications; for that purpose, any ranges shall, however, be reduced beforehand to a specified value.
Where variants are authorised, a separate formula shall be provided for each variant.
6. Throughout each phase of an electronic auction the contracting authorities shall instantaneously communicate to all tenderers at least sufficient information to enable them to ascertain their relative rankings at any moment. They may also communicate other information concerning other prices or values submitted, provided that that is stated in the specifications. They may also at any time announce the number of participants in that phase of the auction. In no case, however, may they disclose the identities of the tenderers during any phase of an electronic auction.
7. Contracting authorities shall close an electronic auction in one or more of the following manners:
(a) in the invitation to take part in the auction they shall indicate the date and time fixed in advance;
(b) when they receive no more new prices or new values which meet the requirements concerning minimum differences. In that event, the contracting authorities shall state in the invitation to take part in the auction the time which they will allow to elapse after receiving the last submission before they close the electronic auction;
(c) when the number of phases in the auction, fixed in the invitation to take part in the auction, has been completed.
When the contracting authorities have decided to close an electronic auction in accordance with subparagraph (c), possibly in combination with the arrangements laid down in subparagraph (b), the invitation to take part in the auction shall indicate the timetable for each phase of the auction.
8. After closing an electronic auction contracting authorities shall award the contract in accordance with Article 53 on the basis of the results of the electronic auction.
Contracting authorities may not have improper recourse to electronic auctions nor may they use them in such a way as to prevent, restrict or distort competition or to change the subject-matter of the contract, as put up for tender in the published contract notice and defined in the specification.
***
Scotland
The Scottish Government’s guide on public procurement chops the contents of the provisions into readable chunks for generations accustomed to Power Point or equal presentations.
http://www.scotland.gov.uk/Publications/2006/11/16102303/euguidance#a10
***
Ireland
The Irish Government’s eProcurement network offers policy and guidance documents on a number of issues. One of these documents is the Quick Guide to eAuctions, which explains electronic auctions step by step for contracting authorities. The guide is available here:
http://www.eprocnet.gov.ie/policy-guidance-documents
***
ePractice.eu
In its own words, ePractice.eu is a portal created by the European Commission which offers a new service for the professional community of eGovernment, eInclusion and eHealth practitioners. It is an interactive initiative that empowers its users to discuss and influence open government, policy-making and the way in which public administrations operate and deliver services. ePractice.eu involves practitioners from all 27 Member States, EU-member candidate states and EFTA countries. Practitioners from other countries outside the EU are also welcome to join.
A wealth of information and search options (including ‘electronic auction’) is available at the ePractice.eu site:
http://www.epractice.eu/home
***
By the way
The European Union and the European Economic Area bring together not only politicians, but also civil servants from the different states. Through regular contacts and exchanges of experiences, the EU becomes an important learning environment.
Is it realistic to think that this diffusion of knowledge would take place to the same extent without the European Union?
Ralf Grahn
Article 1.7 of the Procurement Directive 2004/18/EC offers the following, more technical definition:
7. An ‘electronic auction’ is a repetitive process involving an electronic device for the presentation of new prices, revised downwards, and/or new values concerning certain elements of tenders, which occurs after an initial full evaluation of the tenders, enabling them to be ranked using automatic evaluation methods.
Consequently, certain service contracts and certain works contracts having as their subject-matter intellectual performances, such as the design of works, may not be the object of electronic auctions.
***
Reasons given
Recital 14 of the Procurement Directive (Classic Directive) presents the following reasons for defining and regulating electronic auctions:
(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.
***
Optional
Recital 16 of the Procurement Directive reminds us that the Community procurement legislation is harmonised, not unified. National differences and choices exist, and it is for the member states to choose if they want to employ electronic auctions:
(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.
***
Using electronic auctions
The main Procurement Directive 2004/18/EC provision concerning electronic auctions is Article 54. Having opted for electronic auctions, the transposing legislation of the member state and the procedures employed by the contracting authority must fulfil certain criteria:
Article 54
Use of electronic auctions
1. Member States may provide that contracting authorities may use electronic auctions.
2. In open, restricted or negotiated procedures in the case referred to in Article 30(1)(a), the contracting authorities may decide that the award of a public contract shall be preceded by an electronic auction when the contract specifications can be established with precision.
In the same circumstances, an electronic auction may be held on the reopening of competition among the parties to a framework agreement as provided for in the second indent of the second subparagraph of Article 32(4) and on the opening for competition of contracts to be awarded under the dynamic purchasing system referred to in Article 33.
The electronic auction shall be based:
— either solely on prices when the contract is awarded to the lowest price,
— or on prices and/or on the new values of the features of the tenders indicated in the specification when the contract is awarded to the most economically advantageous tender.
3. Contracting authorities which decide to hold an electronic auction shall state that fact in the contract notice.
The specifications shall include, inter alia, the following details:
(a) the features, the values for which will be the subject of electronic auction, provided that such features are quantifiable and can be expressed in figures or percentages;
(b) any limits on the values which may be submitted, as they result from the specifications relating to the subject of the contract;
(c) the information which will be made available to tenderers in the course of the electronic auction and, where appropriate, when it will be made available to them;
(d) the relevant information concerning the electronic auction process;
(e) the conditions under which the tenderers will be able to bid and, in particular, the minimum differences which will, where appropriate, be required when bidding;
(f) the relevant information concerning the electronic equipment used and the arrangements and technical specifications for connection.
4. Before proceeding with an electronic auction, contracting authorities shall make a full initial evaluation of the tenders in accordance with the award criterion/criteria set and with the weighting fixed for them.
All tenderers who have submitted admissible tenders shall be invited simultaneously by electronic means to submit new prices and/or new values; the invitation shall contain all relevant information concerning individual connection to the electronic equipment being used and shall state the date and time of the start of the electronic auction. The electronic auction may take place in a number of successive phases. The electronic auction may not start sooner than two working days after the date on which invitations are sent out.
5. When the contract is to be awarded on the basis of the most economically advantageous tender, the invitation shall be accompanied by the outcome of a full evaluation of the relevant tenderer, carried out in accordance with the weighting provided for in the first subparagraph of Article 53(2).
The invitation shall also state the mathematical formula to be used in the electronic auction to determine automatic rerankings on the basis of the new prices and/or new values submitted. That formula shall incorporate the weighting of all the criteria fixed to determine the most economically advantageous tender, as indicated in the contract notice or in the specifications; for that purpose, any ranges shall, however, be reduced beforehand to a specified value.
Where variants are authorised, a separate formula shall be provided for each variant.
6. Throughout each phase of an electronic auction the contracting authorities shall instantaneously communicate to all tenderers at least sufficient information to enable them to ascertain their relative rankings at any moment. They may also communicate other information concerning other prices or values submitted, provided that that is stated in the specifications. They may also at any time announce the number of participants in that phase of the auction. In no case, however, may they disclose the identities of the tenderers during any phase of an electronic auction.
7. Contracting authorities shall close an electronic auction in one or more of the following manners:
(a) in the invitation to take part in the auction they shall indicate the date and time fixed in advance;
(b) when they receive no more new prices or new values which meet the requirements concerning minimum differences. In that event, the contracting authorities shall state in the invitation to take part in the auction the time which they will allow to elapse after receiving the last submission before they close the electronic auction;
(c) when the number of phases in the auction, fixed in the invitation to take part in the auction, has been completed.
When the contracting authorities have decided to close an electronic auction in accordance with subparagraph (c), possibly in combination with the arrangements laid down in subparagraph (b), the invitation to take part in the auction shall indicate the timetable for each phase of the auction.
8. After closing an electronic auction contracting authorities shall award the contract in accordance with Article 53 on the basis of the results of the electronic auction.
Contracting authorities may not have improper recourse to electronic auctions nor may they use them in such a way as to prevent, restrict or distort competition or to change the subject-matter of the contract, as put up for tender in the published contract notice and defined in the specification.
***
Scotland
The Scottish Government’s guide on public procurement chops the contents of the provisions into readable chunks for generations accustomed to Power Point or equal presentations.
http://www.scotland.gov.uk/Publications/2006/11/16102303/euguidance#a10
***
Ireland
The Irish Government’s eProcurement network offers policy and guidance documents on a number of issues. One of these documents is the Quick Guide to eAuctions, which explains electronic auctions step by step for contracting authorities. The guide is available here:
http://www.eprocnet.gov.ie/policy-guidance-documents
***
ePractice.eu
In its own words, ePractice.eu is a portal created by the European Commission which offers a new service for the professional community of eGovernment, eInclusion and eHealth practitioners. It is an interactive initiative that empowers its users to discuss and influence open government, policy-making and the way in which public administrations operate and deliver services. ePractice.eu involves practitioners from all 27 Member States, EU-member candidate states and EFTA countries. Practitioners from other countries outside the EU are also welcome to join.
A wealth of information and search options (including ‘electronic auction’) is available at the ePractice.eu site:
http://www.epractice.eu/home
***
By the way
The European Union and the European Economic Area bring together not only politicians, but also civil servants from the different states. Through regular contacts and exchanges of experiences, the EU becomes an important learning environment.
Is it realistic to think that this diffusion of knowledge would take place to the same extent without the European Union?
Ralf Grahn
Tuesday, 16 December 2008
Dynamic purchasing system in EU procurement
A dynamic purchasing system is defined in Article 1.6 of the Procurement Directive 2004/18/EC:
6. A ‘dynamic purchasing system’ is a completely electronic process for making commonly used purchases, the characteristics of which, as generally available on the market, meet the requirements of the contracting authority, which is limited in duration and open throughout its validity to any economic operator which satisfies the selection criteria and has submitted an indicative tender that complies with the specification.
***
Recital explanations
Recitals 12 and 13 of the Procurement Directive offer the following explanation of a dynamic purchasing system:
(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.
***
(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.
***
Optional dynamics
Recital 16 of the Procurement Directive reminds us that the Community procurement legislation is harmonised, not unified. National differences and choices exist, and dynamic purchasing systems are among the options for the member states:
(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.
***
Procedure: Dynamic purchasing systems
Article 33 of the Procurement Directive or Classic Directive 2004/18/EC sets out the dynamic purchasing system procedures:
Article 33
Dynamic purchasing systems
1. Member States may provide that contracting authorities may use dynamic purchasing systems.
2. In order to set up a dynamic purchasing system, contracting authorities shall follow the rules of the open procedure in all its phases up to the award of the contracts to be concluded under this system. All the tenderers satisfying the selection criteria and having submitted an indicative tender which complies with the specification and any possible additional documents shall be admitted to the system; indicative tenders may be improved at any time provided that they continue to comply with the specification. With a view to setting up the system and to the award of contracts under that system, contracting authorities shall use solely electronic means in accordance with Article 42(2) to (5).
3. For the purposes of setting up the dynamic purchasing system, contracting authorities shall:
(a) publish a contract notice making it clear that a dynamic purchasing system is involved;
(b) indicate in the specification, amongst other matters, the nature of the purchases envisaged under that system, as well as all the necessary information concerning the purchasing system, the electronic equipment used and the technical connection arrangements and specifications;
(c) offer by electronic means, on publication of the notice and up to the expiry of the system, unrestricted, direct and full access to the specification and to any additional documents and shall indicate in the notice the internet address at which such documents may be consulted.
4. Contracting authorities shall give any economic operator, throughout the entire period of the dynamic purchasing system, the possibility of submitting an indicative tender and of being admitted to the system under the conditions referred to in paragraph 2. They shall complete evaluation within a maximum of 15 days from the date of submission of the indicative tender. However, they may extend the evaluation period provided that no invitation to tender is issued in the meantime.
The contracting authority shall inform the tenderer referred to in the first subparagraph at the earliest possible opportunity of its admittance to the dynamic purchasing system or of the rejection of its indicative tender.
5. Each specific contract must be the subject of an invitation to tender. Before issuing the invitation to tender, contracting authorities shall publish a simplified contract notice inviting all interested economic operators to submit an indicative tender, in accordance with paragraph 4, within a time limit that may not be less than 15 days from the date on which the simplified notice was sent. Contracting authorities may not proceed with tendering until they have completed evaluation of all the indicative tenders received by that deadline.
6. Contracting authorities shall invite all tenderers admitted to the system to submit a tender for each specific contract to be awarded under the system. To that end they shall set a time limit for the submission of tenders.
They shall award the contract to the tenderer which submitted the best tender on the basis of the award criteria set out in the contract notice for the establishment of the dynamic purchasing system. Those criteria may, if appropriate, be formulated more precisely in the invitation referred to in the first subparagraph.
7. A dynamic purchasing system may not last for more than four years, except in duly justified exceptional cases.
Contracting authorities may not resort to this system to prevent, restrict or distort competition.
No charges may be billed to the interested economic operators or to parties to the system.
***
Guide
The same ground is covered, but chopped into a reader friendly format by the UK Office of Government Commerce (OGC) guide Dynamic Purchasing Systems – OGC Guidance on Dynamic Purchasing Systems in the New Procurement Regulations (updated version March 2008):
http://www.ogc.gov.uk/documents/OGC_Guidance_on_Dynamic_Purchasing_Systems.pdf
***
eProcurement
From dynamic purchasing systems there is only a short step to electronic procurement. If you are interested in e-procurement in the European Union, you could start your tour by looking at the IDABC web page 2010: The e-procurement target for Europe:
http://ec.europa.eu/idabc/en/document/5467/5584
Ralf Grahn
6. A ‘dynamic purchasing system’ is a completely electronic process for making commonly used purchases, the characteristics of which, as generally available on the market, meet the requirements of the contracting authority, which is limited in duration and open throughout its validity to any economic operator which satisfies the selection criteria and has submitted an indicative tender that complies with the specification.
***
Recital explanations
Recitals 12 and 13 of the Procurement Directive offer the following explanation of a dynamic purchasing system:
(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.
***
(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.
***
Optional dynamics
Recital 16 of the Procurement Directive reminds us that the Community procurement legislation is harmonised, not unified. National differences and choices exist, and dynamic purchasing systems are among the options for the member states:
(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.
***
Procedure: Dynamic purchasing systems
Article 33 of the Procurement Directive or Classic Directive 2004/18/EC sets out the dynamic purchasing system procedures:
Article 33
Dynamic purchasing systems
1. Member States may provide that contracting authorities may use dynamic purchasing systems.
2. In order to set up a dynamic purchasing system, contracting authorities shall follow the rules of the open procedure in all its phases up to the award of the contracts to be concluded under this system. All the tenderers satisfying the selection criteria and having submitted an indicative tender which complies with the specification and any possible additional documents shall be admitted to the system; indicative tenders may be improved at any time provided that they continue to comply with the specification. With a view to setting up the system and to the award of contracts under that system, contracting authorities shall use solely electronic means in accordance with Article 42(2) to (5).
3. For the purposes of setting up the dynamic purchasing system, contracting authorities shall:
(a) publish a contract notice making it clear that a dynamic purchasing system is involved;
(b) indicate in the specification, amongst other matters, the nature of the purchases envisaged under that system, as well as all the necessary information concerning the purchasing system, the electronic equipment used and the technical connection arrangements and specifications;
(c) offer by electronic means, on publication of the notice and up to the expiry of the system, unrestricted, direct and full access to the specification and to any additional documents and shall indicate in the notice the internet address at which such documents may be consulted.
4. Contracting authorities shall give any economic operator, throughout the entire period of the dynamic purchasing system, the possibility of submitting an indicative tender and of being admitted to the system under the conditions referred to in paragraph 2. They shall complete evaluation within a maximum of 15 days from the date of submission of the indicative tender. However, they may extend the evaluation period provided that no invitation to tender is issued in the meantime.
The contracting authority shall inform the tenderer referred to in the first subparagraph at the earliest possible opportunity of its admittance to the dynamic purchasing system or of the rejection of its indicative tender.
5. Each specific contract must be the subject of an invitation to tender. Before issuing the invitation to tender, contracting authorities shall publish a simplified contract notice inviting all interested economic operators to submit an indicative tender, in accordance with paragraph 4, within a time limit that may not be less than 15 days from the date on which the simplified notice was sent. Contracting authorities may not proceed with tendering until they have completed evaluation of all the indicative tenders received by that deadline.
6. Contracting authorities shall invite all tenderers admitted to the system to submit a tender for each specific contract to be awarded under the system. To that end they shall set a time limit for the submission of tenders.
They shall award the contract to the tenderer which submitted the best tender on the basis of the award criteria set out in the contract notice for the establishment of the dynamic purchasing system. Those criteria may, if appropriate, be formulated more precisely in the invitation referred to in the first subparagraph.
7. A dynamic purchasing system may not last for more than four years, except in duly justified exceptional cases.
Contracting authorities may not resort to this system to prevent, restrict or distort competition.
No charges may be billed to the interested economic operators or to parties to the system.
***
Guide
The same ground is covered, but chopped into a reader friendly format by the UK Office of Government Commerce (OGC) guide Dynamic Purchasing Systems – OGC Guidance on Dynamic Purchasing Systems in the New Procurement Regulations (updated version March 2008):
http://www.ogc.gov.uk/documents/OGC_Guidance_on_Dynamic_Purchasing_Systems.pdf
***
eProcurement
From dynamic purchasing systems there is only a short step to electronic procurement. If you are interested in e-procurement in the European Union, you could start your tour by looking at the IDABC web page 2010: The e-procurement target for Europe:
http://ec.europa.eu/idabc/en/document/5467/5584
Ralf Grahn
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.
***
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.
***
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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