A number of public service contracts belonging to these general groups are excluded from the application of the European Community (European Union) Procurement Directive: purchase or rental of real estate, broadcasting programmes and time, arbitration and conciliation services, securities, employment contracts as well as contracts on research and technological development.
Article 16 of Directive 2004/18/EC indicates the more exact scope of these specific exclusions.
Contracting authorities have to be careful on two grounds with regard to exclusions. First, they have to be justified. Second, exceptions are generally interpreted narrowly.
***
Article 16
The EC (EU) 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), continues its Section 3 treatment of excluded contracts with Article 16 Specific exclusions:
Article 16
Specific exclusions
This Directive shall not apply to public service contracts for:
(a) the acquisition or rental, by whatever financial means, of land, existing buildings or other immovable property or concerning rights thereon; nevertheless, financial service contracts concluded at the same time as, before or after the contract of acquisition or rental, in whatever form, shall be subject to this Directive;
(b) the acquisition, development, production or co-production of programme material intended for broadcasting by broadcasters and contracts for broadcasting time;
(c) arbitration and conciliation services;
(d) financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments, in particular transactions by the contracting authorities to raise money or capital, and central bank services;
(e) employment contracts;
(f) research and development services other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting authority.
***
Purchase or rental of land or buildings
The recitals put the legal act into context and offer brief explanations of the choices made. Recital 24 of the Procurement Directive 2004/18/EC tells us that certain contracts relating to immovable property have particular characteristics which make them less suitable for public procurement rules.
The need for an existing building or a site is local. It has to be rented or bought locally, and it does not affect intra-Community trade.
Thus, in the context of services, contracts for the acquisition and rental of immovable property and rights to such property are to be excluded from the application of the Procurement Directive.
Public works contracts (building contracts) do not fall under the exclusion. Financial contracts related to the acquisition of real estate do not form part of the exception:
(24) In the context of services, contracts for the acquisition or rental of immovable property or rights to such property have particular characteristics which make the application of public procurement rules inappropriate.
***
Public service broadcasting
Recital 25 of the Procurement Directive excludes public service contracts concerning broadcasting programmes and times. The exclusion does not extend to the supply of technical equipment:
(25) The awarding of public contracts for certain audiovisual services in the field of broadcasting should allow aspects of cultural or social significance to be taken into account which render application of procurement rules inappropriate. For these reasons, an exception must therefore be made for public service contracts for the purchase, development, production or co-production of off-the-shelf programmes and other preparatory services, such as those relating to scripts or artistic performances necessary for the production of the programme and contracts concerning broadcasting times. However, this exclusion should not apply to the supply of technical equipment necessary for the production, coproduction and broadcasting of such programmes. A broadcast should be defined as transmission and distribution using any form of electronic network.
***
Arbitration and conciliation
Recital 26 of the Procurement Directive 2004/18/EC explains that arbitration and conciliation services are ill adapted to procurement rules:
(26) Arbitration and conciliation services are usually provided by bodies or individuals designated or selected in a manner which cannot be governed by procurement rules.
***
Financial services
Recital 27 of the Procurement Directive 2004/18/EC excludes securities and debt transactions of contracting authorities as well as central banks:
(27) In accordance with the Agreement, the financial services covered by this Directive do not include instruments of monetary policy, exchange rates, public debt, reserve management or other policies involving transactions in securities or other financial instruments, in particular transactions by the contracting authorities to raise money or capital. Accordingly, contracts relating to the issue, purchase, sale or transfer of securities or other financial instruments are not covered. Central bank services are also excluded.
***
Employment contracts
Employment contracts are ruled by collective agreements or individual contracts, excluding the application of the procurement regime.
***
Research and technological development
Recital 23 of the Procurement Directive 2004/18/EC explains the exclusion of research and technological development contracts when some benefits accrue beyond the contracting authority:
(23) Pursuant to Article 163 of the Treaty, the encouragement of research and technological development is a means of strengthening the scientific and technological basis of Community industry, and the opening-up of public service contracts contributes to this end. This Directive should not cover the cofinancing of research and development programmes: research and development contracts other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting authority, are not therefore covered by this Directive.
Ralf Grahn
Showing posts with label contract. Show all posts
Showing posts with label contract. Show all posts
Monday, 2 February 2009
Sunday, 11 January 2009
EU procurement: Contracts excluded from both Directives
Public procurement is an important area of internal market law, but some contracts are excluded from the Directives on procurement. We continue our presentation of the relevant provisions to public officials and interested businesses.
The general European Community (European Union) Procurement Directive 2004/18/EC, also known as the Classic Directive, does not apply to public contracts in the special sectors covered by the Utilities Directive 2004/17/EC.
But when a contract in the special sectors is excluded from the Utilities Directive on certain grounds, it would fall within the default Procurement Directive if not specifically excluded from reverting.
We look at these cases of double exclusion.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services.
In this blawg post we follow the thread of non-application ‘to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof’:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
[However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.]
(Although not relevant for today’s blog post, the second paragraph is obsolete since 1 January 2009.)
***
Exclusion of utilities explained
First, a few words on the general scheme of things. Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Double exclusion
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is applied to public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
In earlier blog posts we have looked at Articles 3 to 7 of the Utilities Directive, which applies to the following activities:
Article 3 Gas, heat and electricity
Article 4 Water
Article 5 Transport services
Article 6 Postal services
Article 7 Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports
The special exclusions from the scope of the Utilities Directive under Article 5(2) and Articles 19, 26 and 30 thereof do not lead to the application of the fall-back Procurement Directive.
Next, we look at the instances excluded from both Directives.
***
Bus transport services excluded
Article 5(2) Utilities Directive
2. This Directive shall not apply to entities providing bus transport services to the public which were excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Old Utilities Directive: Excluded bus transport services
Article 2(4) of the old Utilities Directive 93/38/EEC excluded the following bus transport services where effective competition existed. This exclusion still applies:
4. The provision of bus transport services to the public shall not be considered to be a relevant activity within the meaning of paragraph 2(c) where other entities are free to provide those services, either in general or in a particular geographical area, under the same condition as the contracting entities.
***
Bus transport exclusion explained
Recital 19 of the current Utilities Directive explains the scope of excluded bus transport services:
(27) Certain entities providing bus transport services to the public were already excluded from the scope of Directive 93/38/EEC. Such entities should also be excluded from the scope of this Directive. In order to forestall the existence of a multitude of specific arrangements applying to certain sectors only, the general procedure that permits the effects of opening up to competition to be taken into account should also apply to all entities providing bus transport services that are not excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Resale or lease to third parties
Article 19 of the Utilities Directive excludes contracts awarded for purposes of resale or lease to third parties:
SUBSECTION 2
Exclusions applicable to all contracting entities and to all types of contract
Article 19 Utilities Directive
Contracts awarded for purposes of resale or lease to third parties
1. This Directive shall not apply to contracts awarded for purposes of resale or lease to third parties, provided that the contracting entity enjoys no special or exclusive right to sell or lease the subject of such contracts, and other entities are free to sell or lease it under the same conditions as the contracting entity.
2. The contracting entities shall notify the Commission at its request of all the categories of products or activities which they regard as excluded under paragraph 1. The Commission may periodically publish in the Official Journal of the European Union, for information purposes, lists of the categories of products and activities which it considers to be covered by this exclusion. In so doing, the Commission shall respect any sensitive commercial aspects that the contracting entities may point out when forwarding information.
***
Water and energy contracts
Pursuant to Article 26 of the Utilities Directive, certain contracting entities are excluded with regard to contracts for the purchase of water and for the supply of energy or of fuels for the production of energy:
SUBSECTION 4
Exclusions applicable to certain contracting entities only
Article 26 Utilities Directive
Contracts awarded by certain contracting entities for the purchase of water and for the supply of energy or of fuels for the production of energy
This Directive shall not apply:
(a) to contracts for the purchase of water if awarded by contracting entities engaged in one or both of the activities referred to in Article 4(1).
(b) to contracts for the supply of energy or of fuels for the production of energy, if awarded by contracting entities engaged in an activity referred to in Article 3(1), Article 3(3) or Article 7(a).
***
Competitive markets
Article 30(1) of the Utilities Directive establishes the principle to exclude contracts from the application of the Directive, if the activity is directly exposed to competition on markets to which access is not restricted.
The rest of Article 30 deals with the criteria and the procedures:
Article 30 Utilities Directive
Procedure for establishing whether a given activity is directly exposed to competition
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
2. For the purposes of paragraph 1, the question of whether an activity is directly exposed to competition shall be decided on the basis of criteria that are in conformity with the Treaty provisions on competition, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices and the actual or potential presence of more than one supplier of the goods or services in question.
3. For the purposes of paragraph 1, access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
If free access to a given market cannot be presumed on the basis of the first subparagraph, it must be demonstrated that access to the market in question is free de facto and de jure.
4. When a Member State considers that, in compliance with paragraphs 2 and 3, paragraph 1 is applicable to a given activity, it shall notify the Commission and inform it of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in relation to the activity concerned.
Contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission:
— has adopted a Decision establishing the applicability of paragraph 1 in accordance with paragraph 6 and within the period it provides for, or
— has not adopted a Decision concerning such applicability within that period.
However, where free access to a given market is presumed on the basis of the first subparagraph of paragraph 3, and where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1, contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission has not established the inapplicability of paragraph 1 by a Decision adopted in conformity with paragraph 6 and within the period it provides for.
5. When the legislation of the Member State concerned provides for it, the contracting entities may ask the Commission to establish the applicability of paragraph 1 to a given activity by a Decision in conformity with paragraph 6. In such a case, the Commission shall immediately inform the Member State concerned.
That Member State shall, taking account of paragraphs 2 and 3, inform the Commission of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in the activity concerned.
The Commission may also begin the procedure for adoption of a Decision establishing the applicability of paragraph 1 to a given activity on its own initiative. In such a case, the Commission shall immediately inform the Member State concerned.
If, at the end of the period laid down in paragraph 6, the Commission has not adopted a Decision concerning the applicability of paragraph 1 to a given activity, paragraph 1 shall be deemed to be applicable.
6. For the adoption of a Decision under this Article, in accordance with the procedure under Article 68(2), the Commission shall be allowed a period of three months commencing on the first working day following the date on which it receives the notification or the request. However, this period may be extended once by a maximum of three months in duly justified cases, in particular if the information contained in the notification or the request or in the documents annexed thereto is incomplete or inexact or if the facts as reported undergo any substantive changes. This extension shall be limited to one month where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1 in the cases provided for under the third subparagraph of paragraph 4.
When an activity in a given Member State is already the subject of a procedure under this Article, further requests concerning the same activity in the same Member State before the expiry of the period opened in respect of the first request shall not be considered as new procedures and shall be treated in the context of the first request.
The Commission shall adopt detailed rules for applying paragraphs 4, 5 and 6 in accordance with the procedure under Article 68(2).
These rules shall include at least:
(a) the publication in the Official Journal, for information, of the date on which the three-month period referred to in the first subparagraph begins, and, in case this period is prolonged, the date of prolongation and the period by which it is prolonged;
(b) publication of the possible applicability of paragraph 1 in accordance with the second or third subparagraph of paragraph 4 or in accordance with the fourth subparagraph of paragraph 5; and
(c) the arrangements for forwarding positions adopted by an independent authority that is competent in the activity concerned, regarding questions relevant to paragraphs 1 and 2.
***
Exposure to competition explained
Direct exposure to competition is explained by Recitals 40 and 41 of the Utilities Directive:
(40) This Directive should apply neither to contracts intended to permit the performance of an activity referred to in Articles 3 to 7 nor to design contests organised for the pursuit of such an activity if, in the Member State in which this activity is carried out, it is directly exposed to competition on markets to which access is not limited. It is therefore appropriate to introduce a procedure, applicable to all sectors covered by this Directive, that will enable the effects of current or future opening up to competition to be taken into account. Such a procedure should provide legal certainty for the entities concerned, as well as an appropriate decision-making process, ensuring, within short time limits, uniform application of Community law in this area.
(41) Direct exposure to competition should be assessed on the basis of objective criteria, taking account of the specific characteristics of the sector concerned. The implementation and application of appropriate Community legislation opening a given sector, or a part of it, will be considered to provide sufficient grounds for assuming there is free access to the market in question. Such appropriate legislation should be identified in an annex which can be updated by the Commission. When updating, the Commission takes in particular into account the possible adoption of measures entailing a genuine opening up to competition of sectors other than those for which a legislation is already mentioned in Annex XI, such as that of railway transports. Where free access to a given market does not result from the implementation of appropriate Community legislation, it should be demonstrated that, de jure and de facto, such access is free. For this purpose, application by a Member State of a Directive, such as Directive 94/22/EC opening up a given sector to competition, to another sector, such as the coal sector, is a circumstance to be taken into account for the purposes of Article 30.
***
Annex XI Community legislation
Access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
Commission Decision 2008/963/EC of 9 December 2008 amending the Annexes to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards their lists of contracting entities and contracting authorities, published OJEU 24.12.2008 L 349/1, amended Annexes I to X of the Utilities Directive.
Annex XI was left untouched, so we should be safe in accessing this Annex from the latest consolidated version (15 September 2008) of the Utilities Directive. Here is the list of relevant internal market legislation (but look for possible amendments to the Directives mentioned):
ANNEX XI
LIST OF COMMUNITY LEGISLATION REFERRED TO IN ARTICLE 30(3)
A. TRANSPORT OR DISTRIBUTION OF GAS OR HEAT
Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for the internal market in natural gas (1)
B. PRODUCTION, TRANSMISSION OR DISTRIBUTION OF ELECTRICITY
Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (2)
C. PRODUCTION, TRANSPORT OR DISTRIBUTION OF DRINKING WATER
—
D. CONTRACTING ENTITIES IN THE FIELD OF RAIL SERVICES
—
E. CONTRACTING ENTITIES IN THE FIELD OF URBAN RAILWAY, TRAMWAY, TROLLEYBUS OR MOTOR BUS SERVICES
—
F. CONTRACTING ENTITIES IN THE FIELD OF POSTAL SERVICES
Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (3)
G. EXPLORATION FOR AND EXTRACTION OF OIL OR GAS
Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (4)
H. EXPLORATION FOR AND EXTRACTION OF COAL OR OTHER SOLID FUELS
—
I. CONTRACTING ENTITIES IN THE FIELD OF SEAPORT OR INLAND PORT OR OTHER TERMINAL EQUIPMENT
—
J. CONTRACTING ENTITIES IN THE FIELD OF AIRPORT INSTALLATIONS
—
-----
(1) OJ L 204, 21.7.1998, p. 1.
(2) OJ L 27, 30.1.1997, p. 20.
(3) OJ L 15, 21.1.1998, p. 14. Directive last amended by Directive 2002/39/EC (OJ L 176, 5.7.2002, p. 21).
(4) OJ L 164, 30.6.1994, p. 3.
(Check if the Directives have been amended.)
Ralf Grahn
The general European Community (European Union) Procurement Directive 2004/18/EC, also known as the Classic Directive, does not apply to public contracts in the special sectors covered by the Utilities Directive 2004/17/EC.
But when a contract in the special sectors is excluded from the Utilities Directive on certain grounds, it would fall within the default Procurement Directive if not specifically excluded from reverting.
We look at these cases of double exclusion.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services.
In this blawg post we follow the thread of non-application ‘to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof’:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
[However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.]
(Although not relevant for today’s blog post, the second paragraph is obsolete since 1 January 2009.)
***
Exclusion of utilities explained
First, a few words on the general scheme of things. Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Double exclusion
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is applied to public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
In earlier blog posts we have looked at Articles 3 to 7 of the Utilities Directive, which applies to the following activities:
Article 3 Gas, heat and electricity
Article 4 Water
Article 5 Transport services
Article 6 Postal services
Article 7 Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports
The special exclusions from the scope of the Utilities Directive under Article 5(2) and Articles 19, 26 and 30 thereof do not lead to the application of the fall-back Procurement Directive.
Next, we look at the instances excluded from both Directives.
***
Bus transport services excluded
Article 5(2) Utilities Directive
2. This Directive shall not apply to entities providing bus transport services to the public which were excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Old Utilities Directive: Excluded bus transport services
Article 2(4) of the old Utilities Directive 93/38/EEC excluded the following bus transport services where effective competition existed. This exclusion still applies:
4. The provision of bus transport services to the public shall not be considered to be a relevant activity within the meaning of paragraph 2(c) where other entities are free to provide those services, either in general or in a particular geographical area, under the same condition as the contracting entities.
***
Bus transport exclusion explained
Recital 19 of the current Utilities Directive explains the scope of excluded bus transport services:
(27) Certain entities providing bus transport services to the public were already excluded from the scope of Directive 93/38/EEC. Such entities should also be excluded from the scope of this Directive. In order to forestall the existence of a multitude of specific arrangements applying to certain sectors only, the general procedure that permits the effects of opening up to competition to be taken into account should also apply to all entities providing bus transport services that are not excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Resale or lease to third parties
Article 19 of the Utilities Directive excludes contracts awarded for purposes of resale or lease to third parties:
SUBSECTION 2
Exclusions applicable to all contracting entities and to all types of contract
Article 19 Utilities Directive
Contracts awarded for purposes of resale or lease to third parties
1. This Directive shall not apply to contracts awarded for purposes of resale or lease to third parties, provided that the contracting entity enjoys no special or exclusive right to sell or lease the subject of such contracts, and other entities are free to sell or lease it under the same conditions as the contracting entity.
2. The contracting entities shall notify the Commission at its request of all the categories of products or activities which they regard as excluded under paragraph 1. The Commission may periodically publish in the Official Journal of the European Union, for information purposes, lists of the categories of products and activities which it considers to be covered by this exclusion. In so doing, the Commission shall respect any sensitive commercial aspects that the contracting entities may point out when forwarding information.
***
Water and energy contracts
Pursuant to Article 26 of the Utilities Directive, certain contracting entities are excluded with regard to contracts for the purchase of water and for the supply of energy or of fuels for the production of energy:
SUBSECTION 4
Exclusions applicable to certain contracting entities only
Article 26 Utilities Directive
Contracts awarded by certain contracting entities for the purchase of water and for the supply of energy or of fuels for the production of energy
This Directive shall not apply:
(a) to contracts for the purchase of water if awarded by contracting entities engaged in one or both of the activities referred to in Article 4(1).
(b) to contracts for the supply of energy or of fuels for the production of energy, if awarded by contracting entities engaged in an activity referred to in Article 3(1), Article 3(3) or Article 7(a).
***
Competitive markets
Article 30(1) of the Utilities Directive establishes the principle to exclude contracts from the application of the Directive, if the activity is directly exposed to competition on markets to which access is not restricted.
The rest of Article 30 deals with the criteria and the procedures:
Article 30 Utilities Directive
Procedure for establishing whether a given activity is directly exposed to competition
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
2. For the purposes of paragraph 1, the question of whether an activity is directly exposed to competition shall be decided on the basis of criteria that are in conformity with the Treaty provisions on competition, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices and the actual or potential presence of more than one supplier of the goods or services in question.
3. For the purposes of paragraph 1, access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
If free access to a given market cannot be presumed on the basis of the first subparagraph, it must be demonstrated that access to the market in question is free de facto and de jure.
4. When a Member State considers that, in compliance with paragraphs 2 and 3, paragraph 1 is applicable to a given activity, it shall notify the Commission and inform it of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in relation to the activity concerned.
Contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission:
— has adopted a Decision establishing the applicability of paragraph 1 in accordance with paragraph 6 and within the period it provides for, or
— has not adopted a Decision concerning such applicability within that period.
However, where free access to a given market is presumed on the basis of the first subparagraph of paragraph 3, and where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1, contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission has not established the inapplicability of paragraph 1 by a Decision adopted in conformity with paragraph 6 and within the period it provides for.
5. When the legislation of the Member State concerned provides for it, the contracting entities may ask the Commission to establish the applicability of paragraph 1 to a given activity by a Decision in conformity with paragraph 6. In such a case, the Commission shall immediately inform the Member State concerned.
That Member State shall, taking account of paragraphs 2 and 3, inform the Commission of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in the activity concerned.
The Commission may also begin the procedure for adoption of a Decision establishing the applicability of paragraph 1 to a given activity on its own initiative. In such a case, the Commission shall immediately inform the Member State concerned.
If, at the end of the period laid down in paragraph 6, the Commission has not adopted a Decision concerning the applicability of paragraph 1 to a given activity, paragraph 1 shall be deemed to be applicable.
6. For the adoption of a Decision under this Article, in accordance with the procedure under Article 68(2), the Commission shall be allowed a period of three months commencing on the first working day following the date on which it receives the notification or the request. However, this period may be extended once by a maximum of three months in duly justified cases, in particular if the information contained in the notification or the request or in the documents annexed thereto is incomplete or inexact or if the facts as reported undergo any substantive changes. This extension shall be limited to one month where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1 in the cases provided for under the third subparagraph of paragraph 4.
When an activity in a given Member State is already the subject of a procedure under this Article, further requests concerning the same activity in the same Member State before the expiry of the period opened in respect of the first request shall not be considered as new procedures and shall be treated in the context of the first request.
The Commission shall adopt detailed rules for applying paragraphs 4, 5 and 6 in accordance with the procedure under Article 68(2).
These rules shall include at least:
(a) the publication in the Official Journal, for information, of the date on which the three-month period referred to in the first subparagraph begins, and, in case this period is prolonged, the date of prolongation and the period by which it is prolonged;
(b) publication of the possible applicability of paragraph 1 in accordance with the second or third subparagraph of paragraph 4 or in accordance with the fourth subparagraph of paragraph 5; and
(c) the arrangements for forwarding positions adopted by an independent authority that is competent in the activity concerned, regarding questions relevant to paragraphs 1 and 2.
***
Exposure to competition explained
Direct exposure to competition is explained by Recitals 40 and 41 of the Utilities Directive:
(40) This Directive should apply neither to contracts intended to permit the performance of an activity referred to in Articles 3 to 7 nor to design contests organised for the pursuit of such an activity if, in the Member State in which this activity is carried out, it is directly exposed to competition on markets to which access is not limited. It is therefore appropriate to introduce a procedure, applicable to all sectors covered by this Directive, that will enable the effects of current or future opening up to competition to be taken into account. Such a procedure should provide legal certainty for the entities concerned, as well as an appropriate decision-making process, ensuring, within short time limits, uniform application of Community law in this area.
(41) Direct exposure to competition should be assessed on the basis of objective criteria, taking account of the specific characteristics of the sector concerned. The implementation and application of appropriate Community legislation opening a given sector, or a part of it, will be considered to provide sufficient grounds for assuming there is free access to the market in question. Such appropriate legislation should be identified in an annex which can be updated by the Commission. When updating, the Commission takes in particular into account the possible adoption of measures entailing a genuine opening up to competition of sectors other than those for which a legislation is already mentioned in Annex XI, such as that of railway transports. Where free access to a given market does not result from the implementation of appropriate Community legislation, it should be demonstrated that, de jure and de facto, such access is free. For this purpose, application by a Member State of a Directive, such as Directive 94/22/EC opening up a given sector to competition, to another sector, such as the coal sector, is a circumstance to be taken into account for the purposes of Article 30.
***
Annex XI Community legislation
Access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
Commission Decision 2008/963/EC of 9 December 2008 amending the Annexes to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards their lists of contracting entities and contracting authorities, published OJEU 24.12.2008 L 349/1, amended Annexes I to X of the Utilities Directive.
Annex XI was left untouched, so we should be safe in accessing this Annex from the latest consolidated version (15 September 2008) of the Utilities Directive. Here is the list of relevant internal market legislation (but look for possible amendments to the Directives mentioned):
ANNEX XI
LIST OF COMMUNITY LEGISLATION REFERRED TO IN ARTICLE 30(3)
A. TRANSPORT OR DISTRIBUTION OF GAS OR HEAT
Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for the internal market in natural gas (1)
B. PRODUCTION, TRANSMISSION OR DISTRIBUTION OF ELECTRICITY
Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (2)
C. PRODUCTION, TRANSPORT OR DISTRIBUTION OF DRINKING WATER
—
D. CONTRACTING ENTITIES IN THE FIELD OF RAIL SERVICES
—
E. CONTRACTING ENTITIES IN THE FIELD OF URBAN RAILWAY, TRAMWAY, TROLLEYBUS OR MOTOR BUS SERVICES
—
F. CONTRACTING ENTITIES IN THE FIELD OF POSTAL SERVICES
Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (3)
G. EXPLORATION FOR AND EXTRACTION OF OIL OR GAS
Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (4)
H. EXPLORATION FOR AND EXTRACTION OF COAL OR OTHER SOLID FUELS
—
I. CONTRACTING ENTITIES IN THE FIELD OF SEAPORT OR INLAND PORT OR OTHER TERMINAL EQUIPMENT
—
J. CONTRACTING ENTITIES IN THE FIELD OF AIRPORT INSTALLATIONS
—
-----
(1) OJ L 204, 21.7.1998, p. 1.
(2) OJ L 27, 30.1.1997, p. 20.
(3) OJ L 15, 21.1.1998, p. 14. Directive last amended by Directive 2002/39/EC (OJ L 176, 5.7.2002, p. 21).
(4) OJ L 164, 30.6.1994, p. 3.
(Check if the Directives have been amended.)
Ralf Grahn
Friday, 5 December 2008
EU level social partners: Contractual relations and agreements
The social dialogue at European Community (European Union) level can lead to contractual relations, including agreements, between management and labour.
The EU level social partners are confederations of national business organisations and trade unions, so how can these agreements between be put into effect?
Are there any practical examples of implemented European level agreements by European level social partners?
***
Social policy objectives
As a reminder, the social policy objectives mentioned in Article 136 TEC (ex Article 117), in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/103, are important for management (employers, businesses) and labour (trade unions):
– promotion of employment
– improved and harmonised living and working conditions
– social protection
– dialogue between management and labour
– development of human resources
– combating exclusion.
***
Article 139 TEC
Article 139 (ex Article 118b) of the Treaty establishing the European Community (TEC) invites management and labour to establish contractual relations, including agreements at European level.
The European level organisations are free to agree how they cooperate.
Basically they cannot conclude agreements binding on third parties (labour markets in the member states).
Binding effects can be achieved in two ways:
1) Community level agreements can be transformed in accordance with the procedures and practices in each member state.
2) The Council can issue norms in matters covered by Article 137 TEC.
In the latter case, the organisations agree and request, the Commission proposes and the Council decides.
Unanimity in the Council is required concerning the fields covered in Article 137(1)(c), (d), (f) and (g) TEC. In other cases qualified majority voting applies.
Agreements concerning pay, the right of association, the right to strike or the right to impose lock-outs are excluded. Cf. Article 137(5) TEC.
The current Article 139 TEC, as published in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/109:
Article 139 TEC
1. Should management and labour so desire, the dialogue between them at Community level may lead to contractual relations, including agreements.
2. Agreements concluded at Community level shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or, in matters covered by Article 137, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission.
The Council shall act by qualified majority, except where the agreement in question contains one or more provisions relating to one of the areas for which unanimity is required pursuant to Article 137(2). In that case, it shall act unanimously.
***
Original Lisbon Treaty (ToL)
Article 2, point 118 of the original Treaty of Lisbon (ToL) amends Article 139 TEC in the following way (OJ 17.12.2007 C 306/81):
118) Article 139(2) shall be amended as follows:
(a) at the end of the first subparagraph, the following sentence shall be added: ‘The European Parliament shall be informed.’;
(b) in the second subparagraph, at the beginning of the first sentence, ‘The Council shall act by qualified majority, except where the agreement’ shall be replaced by ‘The Council shall act unanimously where the agreement’ and the second sentence shall be deleted.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that the social policy title was to be renumbered Title X and that the Article 139 TFEU (ToL) was to be renumbered Article 155 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
The exclusion of the European Parliament was mitigated by adopting the obligation to inform the EP from Article III-212(2) of the Constitutional Treaty, as proposed by the European Convention in Article 106(2) of the draft Constitution.
After the horizontal amendments and the editorial change to the second subparagraph of paragraph 2, Article 155 of the Treaty on the Functioning of the European Union (TFEU), in the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/116, appears as follows:
(TITLE X
SOCIAL POLICY)
Article 155 TFEU
(ex Article 139 TEC)
1. Should management and labour so desire, the dialogue between them at Union level may lead to contractual relations, including agreements.
2. Agreements concluded at Union level shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or, in matters covered by Article 153, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission. The European Parliament shall be informed.
The Council shall act unanimously where the agreement in question contains one or more provisions relating to one of the areas for which unanimity is required pursuant to Article 153(2).
***
Social partners
Again, Article 139 TEC and Article 155 TFEU employ the vague concept ‘management and labour’ in the English language version, but the reference to the Community (Union) level gives some guidance.
More distinctly, when I compared five other language versions of Article 155 TFEU they employ the term ‘social partners’ or something close to that, clearly evoking representative organisations of employers (businesses) and labour (trade unions) at European level.
German: Sozialpartner
French: partenaires sociaux
Spanish: interlocutores sociales
Finnish: työmarkkinaosapuolet
Swedish: arbetsmarknadens parter
For management and labour in the English language version of the current and future treaties, read social partners, because other language versions are explicit.
***
Main European level social partners: Who are they?
The membership of the main Social dialogue committee (SDC) includes the main cross-sectoral players: the European Trade Union Confederation (ETUC), the Confederation of European Business (Businesseurope), the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP), the European Associaiton of Craft, Small and Medium Sized Enterprises (UEAPME), Eurocadres and the European Confederation of Executives and Managerial Staff (CEC):
http://ec.europa.eu/employment_social/social_dialogue/interprof_en.htm
***
Social dialogue
The Commission’s DG Employment, Social Affairs and Equal Opportunities offers web pages with information about the European social dialogue. A distinction is made between bipartite dialogue involving employers and trade unions (the subject of Article 139 TEC and Article 155 TFEU) and a tripartite dialogue with the participation of public authorities (the subject of Article 138 TEC and Article 154 TFEU). Consultation takes place both generally (cross-industry social dialogue) and on a sectoral basis:
http://ec.europa.eu/employment_social/social_dialogue/index_en.htm
***
Bipartite social dialogue
The Commission’s DG Employment, Social Affairs and Equal Opportunities offers a web page Bipartite Social Dialogue at European level:
http://ec.europa.eu/employment_social/social_dialogue/bipartite_en.htm
In addition to the main social dialogue committee (SDC), there are 33 sectoral committees.
***
Social dialogue results
A web page called Typology of European social dialogue results presents practical examples:
http://ec.europa.eu/employment_social/social_dialogue/typology_en.htm
***
Eurofound
Additional information on various aspects of employment issues from a research and communication viewpoint is offered by Eurofound, the European Foundation for the Improvement of Living and Working Conditions:
http://www.eurofound.europa.eu/about/index.htm
Ralf Grahn
The EU level social partners are confederations of national business organisations and trade unions, so how can these agreements between be put into effect?
Are there any practical examples of implemented European level agreements by European level social partners?
***
Social policy objectives
As a reminder, the social policy objectives mentioned in Article 136 TEC (ex Article 117), in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/103, are important for management (employers, businesses) and labour (trade unions):
– promotion of employment
– improved and harmonised living and working conditions
– social protection
– dialogue between management and labour
– development of human resources
– combating exclusion.
***
Article 139 TEC
Article 139 (ex Article 118b) of the Treaty establishing the European Community (TEC) invites management and labour to establish contractual relations, including agreements at European level.
The European level organisations are free to agree how they cooperate.
Basically they cannot conclude agreements binding on third parties (labour markets in the member states).
Binding effects can be achieved in two ways:
1) Community level agreements can be transformed in accordance with the procedures and practices in each member state.
2) The Council can issue norms in matters covered by Article 137 TEC.
In the latter case, the organisations agree and request, the Commission proposes and the Council decides.
Unanimity in the Council is required concerning the fields covered in Article 137(1)(c), (d), (f) and (g) TEC. In other cases qualified majority voting applies.
Agreements concerning pay, the right of association, the right to strike or the right to impose lock-outs are excluded. Cf. Article 137(5) TEC.
The current Article 139 TEC, as published in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/109:
Article 139 TEC
1. Should management and labour so desire, the dialogue between them at Community level may lead to contractual relations, including agreements.
2. Agreements concluded at Community level shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or, in matters covered by Article 137, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission.
The Council shall act by qualified majority, except where the agreement in question contains one or more provisions relating to one of the areas for which unanimity is required pursuant to Article 137(2). In that case, it shall act unanimously.
***
Original Lisbon Treaty (ToL)
Article 2, point 118 of the original Treaty of Lisbon (ToL) amends Article 139 TEC in the following way (OJ 17.12.2007 C 306/81):
118) Article 139(2) shall be amended as follows:
(a) at the end of the first subparagraph, the following sentence shall be added: ‘The European Parliament shall be informed.’;
(b) in the second subparagraph, at the beginning of the first sentence, ‘The Council shall act by qualified majority, except where the agreement’ shall be replaced by ‘The Council shall act unanimously where the agreement’ and the second sentence shall be deleted.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that the social policy title was to be renumbered Title X and that the Article 139 TFEU (ToL) was to be renumbered Article 155 TFEU in the consolidated version of the amending treaties (OJ 17.12.2007 C 306/214).
***
Consolidated Lisbon Treaty
The exclusion of the European Parliament was mitigated by adopting the obligation to inform the EP from Article III-212(2) of the Constitutional Treaty, as proposed by the European Convention in Article 106(2) of the draft Constitution.
After the horizontal amendments and the editorial change to the second subparagraph of paragraph 2, Article 155 of the Treaty on the Functioning of the European Union (TFEU), in the consolidated TFEU, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/116, appears as follows:
(TITLE X
SOCIAL POLICY)
Article 155 TFEU
(ex Article 139 TEC)
1. Should management and labour so desire, the dialogue between them at Union level may lead to contractual relations, including agreements.
2. Agreements concluded at Union level shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or, in matters covered by Article 153, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission. The European Parliament shall be informed.
The Council shall act unanimously where the agreement in question contains one or more provisions relating to one of the areas for which unanimity is required pursuant to Article 153(2).
***
Social partners
Again, Article 139 TEC and Article 155 TFEU employ the vague concept ‘management and labour’ in the English language version, but the reference to the Community (Union) level gives some guidance.
More distinctly, when I compared five other language versions of Article 155 TFEU they employ the term ‘social partners’ or something close to that, clearly evoking representative organisations of employers (businesses) and labour (trade unions) at European level.
German: Sozialpartner
French: partenaires sociaux
Spanish: interlocutores sociales
Finnish: työmarkkinaosapuolet
Swedish: arbetsmarknadens parter
For management and labour in the English language version of the current and future treaties, read social partners, because other language versions are explicit.
***
Main European level social partners: Who are they?
The membership of the main Social dialogue committee (SDC) includes the main cross-sectoral players: the European Trade Union Confederation (ETUC), the Confederation of European Business (Businesseurope), the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP), the European Associaiton of Craft, Small and Medium Sized Enterprises (UEAPME), Eurocadres and the European Confederation of Executives and Managerial Staff (CEC):
http://ec.europa.eu/employment_social/social_dialogue/interprof_en.htm
***
Social dialogue
The Commission’s DG Employment, Social Affairs and Equal Opportunities offers web pages with information about the European social dialogue. A distinction is made between bipartite dialogue involving employers and trade unions (the subject of Article 139 TEC and Article 155 TFEU) and a tripartite dialogue with the participation of public authorities (the subject of Article 138 TEC and Article 154 TFEU). Consultation takes place both generally (cross-industry social dialogue) and on a sectoral basis:
http://ec.europa.eu/employment_social/social_dialogue/index_en.htm
***
Bipartite social dialogue
The Commission’s DG Employment, Social Affairs and Equal Opportunities offers a web page Bipartite Social Dialogue at European level:
http://ec.europa.eu/employment_social/social_dialogue/bipartite_en.htm
In addition to the main social dialogue committee (SDC), there are 33 sectoral committees.
***
Social dialogue results
A web page called Typology of European social dialogue results presents practical examples:
http://ec.europa.eu/employment_social/social_dialogue/typology_en.htm
***
Eurofound
Additional information on various aspects of employment issues from a research and communication viewpoint is offered by Eurofound, the European Foundation for the Improvement of Living and Working Conditions:
http://www.eurofound.europa.eu/about/index.htm
Ralf Grahn
Friday, 31 October 2008
Small business and EU public procurement
Is it impossible for small companies to win public contracts? Public procurement is generally seen at least as a daunting task for smaller enterprises.
The Small Business Act for Europe was launched by the European Commission 25 June 2008 to lower the hurdles faced by small and medium sized enterprises (SMEs). The aim was neatly put by Commission president José Manuel Barroso: Less red tape and more red carpet.
As the Commission points out, during the last years 80 per cent of the new jobs in the European Union have been created in the 23 milion SMEs (each with less than 250 employees and a turnover of less than 50 million euro).
For a quick presentation of the Small Business Act (SBA), go to the press release “Think Small First”: A Small Business Act for Europe:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1003&format=HTML&aged=0&language=EN&guiLanguage=en
***
Small Business Act
Officially, the document is the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, “Think Small First” A “Small Business Act” for Europe , Brussels, 25.6.2008 COM(2008) 394 final:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0394:FIN:EN:PDF
***
The aim was to focus the Commission’s own activities and to infuse some small business thinking into the refounded Lisbon Growth and Jobs Strategy, before the member states conclude their next round of national Lisbon strategies.
The Commission calls the term Act symbolic. It could just as well be called misleading, since the SBA is primarily a political programme, with a modicum of related legislative proposals.
This is the wider context for the proposals concerning public contracts.
***
Public procurement proposals
Section V (page 10) encourages the European Union and the member states to make use of the Code of Best Practice providing guidance to contracting authorities on how they may apply the EC public procurement framework in a way which facilitates SMEs’ participation in public procurement procedures.
The Communication acknowledged the obstacles SMEs face when participating in public procurement markets, which account for16% of the EU gross domestic product (GDP). According to the Commission, further significant efforts are needed to reduce the remaining obstacles to SMEs accessing procurement markets, especially by alleviating requirements imposed by contracting authorities in award procedures.
***
Commission actions
The Commission promised to present a voluntary Code of Best Practice for contracting authorities, to trigger further change in the purchasing culture. It would provide guidance on how to reduce bureaucracy, improve transparency and information and ensure a level playing field for SMEs.
The Commission promised to further facilitate access to information on procurement opportunities by complementing the existing EU websites dedicated to public procurement with a series of initiatives such as optional publication of contract notices for below-threshold procurement, an online tool to find business partners, and increased transparency of public procurement requirements
***
Member states’ actions
Electronic procurement portals: The member states were ‘invited to’ set up electronic portals to widen access to information on public procurement opportunities below the EU thresholds.
Smaller lots: The member states could encourage their contracting authorities to subdivide contracts into lots where it is appropriate and to make sub-contracting opportunities more visible.
Reasonable demands: The Commission wanted the member states to remind their contracting authorities of their obligation to avoid disproportionate qualification and financial requirements.
Dialogue and training: The Commission also wanted to encourage constructive dialogue and mutual understanding between SMEs and large buyers through activities such as information, training, monitoring and exchange of good practice.
***
It is important for small businesses and their organisations to keep on the lookout for good practices in Europe, and to keep a watch on the laggards among the member states.
If you have good or deplorable examples of procurement practices in Europe, your comments are most welcome.
Ralf Grahn
The Small Business Act for Europe was launched by the European Commission 25 June 2008 to lower the hurdles faced by small and medium sized enterprises (SMEs). The aim was neatly put by Commission president José Manuel Barroso: Less red tape and more red carpet.
As the Commission points out, during the last years 80 per cent of the new jobs in the European Union have been created in the 23 milion SMEs (each with less than 250 employees and a turnover of less than 50 million euro).
For a quick presentation of the Small Business Act (SBA), go to the press release “Think Small First”: A Small Business Act for Europe:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1003&format=HTML&aged=0&language=EN&guiLanguage=en
***
Small Business Act
Officially, the document is the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, “Think Small First” A “Small Business Act” for Europe , Brussels, 25.6.2008 COM(2008) 394 final:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0394:FIN:EN:PDF
***
The aim was to focus the Commission’s own activities and to infuse some small business thinking into the refounded Lisbon Growth and Jobs Strategy, before the member states conclude their next round of national Lisbon strategies.
The Commission calls the term Act symbolic. It could just as well be called misleading, since the SBA is primarily a political programme, with a modicum of related legislative proposals.
This is the wider context for the proposals concerning public contracts.
***
Public procurement proposals
Section V (page 10) encourages the European Union and the member states to make use of the Code of Best Practice providing guidance to contracting authorities on how they may apply the EC public procurement framework in a way which facilitates SMEs’ participation in public procurement procedures.
The Communication acknowledged the obstacles SMEs face when participating in public procurement markets, which account for16% of the EU gross domestic product (GDP). According to the Commission, further significant efforts are needed to reduce the remaining obstacles to SMEs accessing procurement markets, especially by alleviating requirements imposed by contracting authorities in award procedures.
***
Commission actions
The Commission promised to present a voluntary Code of Best Practice for contracting authorities, to trigger further change in the purchasing culture. It would provide guidance on how to reduce bureaucracy, improve transparency and information and ensure a level playing field for SMEs.
The Commission promised to further facilitate access to information on procurement opportunities by complementing the existing EU websites dedicated to public procurement with a series of initiatives such as optional publication of contract notices for below-threshold procurement, an online tool to find business partners, and increased transparency of public procurement requirements
***
Member states’ actions
Electronic procurement portals: The member states were ‘invited to’ set up electronic portals to widen access to information on public procurement opportunities below the EU thresholds.
Smaller lots: The member states could encourage their contracting authorities to subdivide contracts into lots where it is appropriate and to make sub-contracting opportunities more visible.
Reasonable demands: The Commission wanted the member states to remind their contracting authorities of their obligation to avoid disproportionate qualification and financial requirements.
Dialogue and training: The Commission also wanted to encourage constructive dialogue and mutual understanding between SMEs and large buyers through activities such as information, training, monitoring and exchange of good practice.
***
It is important for small businesses and their organisations to keep on the lookout for good practices in Europe, and to keep a watch on the laggards among the member states.
If you have good or deplorable examples of procurement practices in Europe, your comments are most welcome.
Ralf Grahn
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