The EC (EU) Procurement Directive 2004/18/EC, also known as the Classic Directive, defines a central purchasing body (CPB) in Article 1.10:
10. A ‘central purchasing body’ is a contracting authority which:
— acquires supplies and/or services intended for contracting authorities, or
— awards public contracts or concludes framework agreements for works, supplies or services intended for contracting authorities.
***
Contracting authority
The definition of a central purchasing body builds on the concept of a contracting authority.
You can turn to the blog post EU procurement: Contracting authority, at:
http://grahnlaw.blogspot.com/2008/12/eu-procurement-contracting-authority.html
***
Reasons given
The Recitals of the Procurement Directive present reasons for the consolidated legislation and for novelties. Recital 15 describes the central purchasing body (CPB):
(15) Certain centralised purchasing techniques have been developed in Member States. Several contracting authorities are responsible for making acquisitions or awarding public contracts/framework agreements for other contracting authorities. In view of the large volumes purchased, those techniques help increase competition and streamline public purchasing. Provision should therefore be made for a Community definition of central purchasing bodies dedicated to contracting authorities. A definition should also be given of the conditions under which, in accordance with the principles of non-discrimination and equal treatment, contracting authorities purchasing works, supplies and/or services through a central purchasing body may be deemed to have complied with this Directive.
***
Article 11
Procurement Directive Article 11 sets out the optional nature of central purchasing bodies, but complying with the procurement rules is mandatory:
Article 11
Public contracts and framework agreements awarded by central purchasing bodies
1. Member States may stipulate that contracting authorities may purchase works, supplies and/or services from or through a central purchasing body.
2. Contracting authorities which purchase works, supplies and/or services from or through a central purchasing body in the cases set out in Article 1(10) shall be deemed to have complied with this Directive insofar as the central purchasing body has complied with it.
***
UK OGC
The United Kingdom Office of Government Commerce has published OGC Guidance on Central Purchasing Bodies (March 2008):
http://www.ogc.gov.uk/documents/OGC_Guidance_on_Central_Purchasing_Bodies.pdf
The updated six page brochure (pdf) gives advice to contracting authorities entering into agreements with central purchasing bodies.
Ralf Grahn
Showing posts with label contracting authority. Show all posts
Showing posts with label contracting authority. Show all posts
Saturday, 20 December 2008
Friday, 19 December 2008
EU procurement: Contracting authority
Contracting authority is one of the key concepts of the EC (EU) Procurement Directive 2004/18/EC, popping up in almost every provision. With the position as a contracting authority goes the responsibility to follow the right procedures.
Even if state, regional and local authorities are normally easy to recognise, the role of other bodies or associations can be tricky.
Here is the definition of a contracting authority in Article 1.9 of the Procurement Directive, also known as the Classic Directive:
9. ‘Contracting authorities’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law.
A ‘body governed by public law’ means any body:
(a) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) having legal personality; and
(c) financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
Non-exhaustive lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in (a), (b) and (c) of the second subparagraph are set out in Annex III. Member States shall periodically notify the Commission of any changes to their lists of bodies and categories of bodies.
***
Annex III
The quick route to check if a body is a contracting authority, is in principle, to look at the relevant country list in Annex III List of bodies and categories of bodies governed by public law as referred to in the second subparagraph of Article 1(9).
Notice that the Commission has updated its country lists 15 December 2008. They are available on the web page Contracting authorities bound by EU public procurement rules:
http://ec.europa.eu/internal_market/publicprocurement/authorities_en.htm
For an overview of the changes, you can read the press release Public procurement: updated lists of Contracting Authorities give better access to public contracts for businesses (IP/08/1971, Brussels, 15 December 2008). The press release paints a broad picture of EU public procurement, potential savings to taxpayers and it contains the current contract thresholds, in force since 1 January 2008:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1971&format=HTML&aged=0&language=EN&guiLanguage=en
But even if updated, the list does not exclude other organisations from the responsibilities of a contracting authority. The interpretation is functional.
***
Commission Guide
To mention one example, the Commission’s Guide to Community rules on public works contracts (based on the old Directive 93/37/EEC) explains the contracting authority in the following way (page 9 to 11):
1.3 The contracting authority
The Directive defines contracting authorities as the State, regional or local authorities, bodies governed by public law, or associations formed by one or more such authorities or bodies governed by public law.
The State
It is worth stressing that for the purposes of applying the Directive, the concept of the State is not confined to the administration as such, but also covers bodies which, albeit not formally part of the traditional structures of the administration, have no legal personality of their own and carry out tasks that are normally the responsibility of the State administration, which they merely represent in different ways. This point was clarified by the Court of Justice in Beentjes v Netherlands State, in which it had to rule whether Directive 71/305/EEC applied to the award of public works contracts by the Waterland Local Land Consolidation Committee, a body with no legal personality of its own. To that end, the Court stressed that “the objective of Directive 71/305/EEC is to coordinate national procedures for the award of public works contracts concluded in Member States on behalf of the State, regional or local authorities or other legal persons governed by public law” and that the term “the State” within the meaning of Article 1(b) Directive 71/305/EEC defining contracting authorities “must be interpreted in functional terms. The aim of the Directive, which is to ensure the effective attainment of freedom of establishment and freedom to provide services in respect of public works contracts, would be jeopardized if the provisions of the Directive were to be held to be inapplicable solely because a public works contract is awarded by a body which, although it was set up to carry out tasks entrusted to it by legislation, is not formally a part of the State administration.
Consequently, a body such as that in question here, whose composition and functions are laid down by legislation and which depends on the authorities for the appointment of its members, the observance of the obligations arising out of its measures and the financing of the public works contracts which it is its task to award, must be regarded as falling within the notion of the State for the purpose of the abovementioned provision, even though it is not part of the State administration in formal terms.”
Bodies governed by public law
The Directive defines bodies governed by public law on the basis of three cumulative criteria. A body governed by public law thus means any body:
(1) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and
(2) having legal personality, and
(3) * either financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law,
* or subject to management supervision by those bodies,
* or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law.
The Directive thus applies to any body with legal personality under public or private law, established in the general interest, whose operational choices and activities are or may be influenced by a contracting authority as a result of the links between them by virtue of one or more of the conditions that go to make up the third criterion.
The only bodies which are established in the general interest and fulfil the other criteria but are not regarded as contracting authorities by the Directive are those set up for the specific purpose of meeting needs of an industrial or commercial nature, i.e. needs which they satisfy by carrying on economic activities in the industrial or commercial field that involve supplying goods or services on markets which are open to other public or private operators under fully competitive conditions. These are therefore bodies which carry on a business equivalent to that of a private operator.
It should be emphasized that the exemption provided for by the Directive applies only to bodies which carry on such economic activities since they were set up in order specifically to do so. Consequently, the exemption does not apply to bodies which, while carrying on commercial or industrial activities, were in fact set up to satisfy a different general interest: e.g. a body set up specifically to carry out administrative tasks so as to meet general–interest needs of a social nature, which, to ensure that its books balance, also carries on a profitable commercial activity.
Nevertheless, each individual case must be analysed to determine whether the body governed by public law is subject to the Directive.
In the interests of greater transparency in application, the Directive sets out, in Annex I, a list19 of bodies and categories of bodies fulfilling the criteria for bodies governed by public law and lays down a procedure for updating the list to ensure that it is as exhaustive as possible.
The obligation on a body governed by public law to comply with the Directive does not, however, depend on its prior inclusion in the list: it is under such an obligation as soon as it fulfils the criteria. Similarly, although a body may be on the list, it could be exempted from complying with the Directive if it were no longer to meet one or more of the cumulative criteria.
***
Procurement Guidelines
Once you have established that you are a contracting authority or aim to do business with one, the procedures become important.
Because the procedures are mandatory for contracting authorities and valuable to know for contractors, suppliers and service providers, step by step guides have been published.
Although the implementing national legislation differs from jurisdiction to jurisdiction, the legal background (EC/EU) and the basic challenges remain the same. Here is one example in English:
The Irish Government has published Public Procurement Guidelines – Competitive Process, which apply to supplies and services (39 pages) as well as other guides for public purchasers:
http://www.e-tenders.gov.ie/guides/guides_list.aspx?Type=2
Ralf Grahn
Even if state, regional and local authorities are normally easy to recognise, the role of other bodies or associations can be tricky.
Here is the definition of a contracting authority in Article 1.9 of the Procurement Directive, also known as the Classic Directive:
9. ‘Contracting authorities’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law.
A ‘body governed by public law’ means any body:
(a) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) having legal personality; and
(c) financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
Non-exhaustive lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in (a), (b) and (c) of the second subparagraph are set out in Annex III. Member States shall periodically notify the Commission of any changes to their lists of bodies and categories of bodies.
***
Annex III
The quick route to check if a body is a contracting authority, is in principle, to look at the relevant country list in Annex III List of bodies and categories of bodies governed by public law as referred to in the second subparagraph of Article 1(9).
Notice that the Commission has updated its country lists 15 December 2008. They are available on the web page Contracting authorities bound by EU public procurement rules:
http://ec.europa.eu/internal_market/publicprocurement/authorities_en.htm
For an overview of the changes, you can read the press release Public procurement: updated lists of Contracting Authorities give better access to public contracts for businesses (IP/08/1971, Brussels, 15 December 2008). The press release paints a broad picture of EU public procurement, potential savings to taxpayers and it contains the current contract thresholds, in force since 1 January 2008:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1971&format=HTML&aged=0&language=EN&guiLanguage=en
But even if updated, the list does not exclude other organisations from the responsibilities of a contracting authority. The interpretation is functional.
***
Commission Guide
To mention one example, the Commission’s Guide to Community rules on public works contracts (based on the old Directive 93/37/EEC) explains the contracting authority in the following way (page 9 to 11):
1.3 The contracting authority
The Directive defines contracting authorities as the State, regional or local authorities, bodies governed by public law, or associations formed by one or more such authorities or bodies governed by public law.
The State
It is worth stressing that for the purposes of applying the Directive, the concept of the State is not confined to the administration as such, but also covers bodies which, albeit not formally part of the traditional structures of the administration, have no legal personality of their own and carry out tasks that are normally the responsibility of the State administration, which they merely represent in different ways. This point was clarified by the Court of Justice in Beentjes v Netherlands State, in which it had to rule whether Directive 71/305/EEC applied to the award of public works contracts by the Waterland Local Land Consolidation Committee, a body with no legal personality of its own. To that end, the Court stressed that “the objective of Directive 71/305/EEC is to coordinate national procedures for the award of public works contracts concluded in Member States on behalf of the State, regional or local authorities or other legal persons governed by public law” and that the term “the State” within the meaning of Article 1(b) Directive 71/305/EEC defining contracting authorities “must be interpreted in functional terms. The aim of the Directive, which is to ensure the effective attainment of freedom of establishment and freedom to provide services in respect of public works contracts, would be jeopardized if the provisions of the Directive were to be held to be inapplicable solely because a public works contract is awarded by a body which, although it was set up to carry out tasks entrusted to it by legislation, is not formally a part of the State administration.
Consequently, a body such as that in question here, whose composition and functions are laid down by legislation and which depends on the authorities for the appointment of its members, the observance of the obligations arising out of its measures and the financing of the public works contracts which it is its task to award, must be regarded as falling within the notion of the State for the purpose of the abovementioned provision, even though it is not part of the State administration in formal terms.”
Bodies governed by public law
The Directive defines bodies governed by public law on the basis of three cumulative criteria. A body governed by public law thus means any body:
(1) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and
(2) having legal personality, and
(3) * either financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law,
* or subject to management supervision by those bodies,
* or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law.
The Directive thus applies to any body with legal personality under public or private law, established in the general interest, whose operational choices and activities are or may be influenced by a contracting authority as a result of the links between them by virtue of one or more of the conditions that go to make up the third criterion.
The only bodies which are established in the general interest and fulfil the other criteria but are not regarded as contracting authorities by the Directive are those set up for the specific purpose of meeting needs of an industrial or commercial nature, i.e. needs which they satisfy by carrying on economic activities in the industrial or commercial field that involve supplying goods or services on markets which are open to other public or private operators under fully competitive conditions. These are therefore bodies which carry on a business equivalent to that of a private operator.
It should be emphasized that the exemption provided for by the Directive applies only to bodies which carry on such economic activities since they were set up in order specifically to do so. Consequently, the exemption does not apply to bodies which, while carrying on commercial or industrial activities, were in fact set up to satisfy a different general interest: e.g. a body set up specifically to carry out administrative tasks so as to meet general–interest needs of a social nature, which, to ensure that its books balance, also carries on a profitable commercial activity.
Nevertheless, each individual case must be analysed to determine whether the body governed by public law is subject to the Directive.
In the interests of greater transparency in application, the Directive sets out, in Annex I, a list19 of bodies and categories of bodies fulfilling the criteria for bodies governed by public law and lays down a procedure for updating the list to ensure that it is as exhaustive as possible.
The obligation on a body governed by public law to comply with the Directive does not, however, depend on its prior inclusion in the list: it is under such an obligation as soon as it fulfils the criteria. Similarly, although a body may be on the list, it could be exempted from complying with the Directive if it were no longer to meet one or more of the cumulative criteria.
***
Procurement Guidelines
Once you have established that you are a contracting authority or aim to do business with one, the procedures become important.
Because the procedures are mandatory for contracting authorities and valuable to know for contractors, suppliers and service providers, step by step guides have been published.
Although the implementing national legislation differs from jurisdiction to jurisdiction, the legal background (EC/EU) and the basic challenges remain the same. Here is one example in English:
The Irish Government has published Public Procurement Guidelines – Competitive Process, which apply to supplies and services (39 pages) as well as other guides for public purchasers:
http://www.e-tenders.gov.ie/guides/guides_list.aspx?Type=2
Ralf Grahn
Friday, 12 December 2008
European Union: Public contracts
Public contracts are such stuff as public procurement is made on. Hence, we look at some of the key terms employed in defining public contracts in Article 1.2(a) of the Procurement Directive 2004/18/EC.
In writing, economic operator and contracting authority are among the concepts given definitions.
***
Definition: Public contracts
Article 1.2(a)
‘Public contracts’ are contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services within the meaning of this Directive.
***
In writing
After taking note of contracts and a pecuniary interest, we turn to the meaning of ‘in writing’. This leads us to a broad definition in Article 1.12:
12. ‘Written’ or ‘in writing’ means any expression consisting of words or figures which can be read, reproduced and subsequently communicated. It may include information which is transmitted and stored by electronic means.
Electronic means are further explained in the following paragraph, 1.13:
13. ‘Electronic means’ means using electronic equipment for the processing (including digital compression) and storage of data which is transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means.
***
Economic operator
Economic operator is a convenient term to cover the concepts of contractor, supplier and service provider, as described in Article 1.8:
8. The terms ‘contractor’, ‘supplier’ and ‘service provider’ mean any natural or legal person or public entity or group of such persons and/or bodies which offers on the market, respectively, the execution of works and/or a work, products or services.
The term ‘economic operator’ shall cover equally the concepts of contractor, supplier and service provider. It is used merely in the interest of simplification.
An economic operator who has submitted a tender shall be designated a ‘tenderer’. One which has sought an invitation to take part in a restricted or negotiated procedure or a competitive dialogue shall be designated a ‘candidate’.
***
Contracting authority
What makes procurement public is the existence of a contracting party subject to public law, laid out broadly enough to cover many organisations established under the rules of private law, as elaborated in more detail in Article 1.9:
9. ‘Contracting authorities’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law.
A ‘body governed by public law’ means any body:
(a) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) having legal personality; and
(c) financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
Non-exhaustive lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in (a), (b) and (c) of the second subparagraph are set out in Annex III. Member States shall periodically notify the Commission of any changes to their lists of bodies and categories of bodies.
*
An indicative list of contracting authorities is contained in Annex III List of bodies and categories of bodies governed by public law as referred to in the second subparagraph of Article 1(9).
***
Object
The object of the public contract is the execution of works, the supply of products or the provision of services.
Works
For the definition of public works contracts we turn to the definition in Article 1.2(b):
(b) ‘Public works contracts’ are public contracts having as their object either the execution, or both the design and execution, of works related to one of the activities within the meaning of Annex I or a work, or the realisation, by whatever means, of a work corresponding to the requirements specified by the contracting authority. A ‘work’ means the outcome of building or civil engineering works taken as a whole which is sufficient of itself to fulfil an economic or technical function.
*
Typically, the outcome is a building or a road.
***.
Products
Article 1.2(c) of the Procurement Directive 2004/18/EC places products at the centre of a public supply contract:
(c) ‘Public supply contracts’ are public contracts other than those referred to in (b) having as their object the purchase, lease, rental or hire purchase, with or without option to buy, of products.
A public contract having as its object the supply of products and which also covers, as an incidental matter, siting and installation operations shall be considered to be a ‘public supply contract’
*
Buying office paper or leasing a new car fleet could be thought of as examples.
***
Services
After excluding works and products, Article 1.2(d) refers to the services mentioned in Annex II Services referred to in Article 1(2)(d).
d) ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.
A public contract having as its object both products and services within the meaning of Annex II shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.
A public contract having as its object services within the meaning of Annex II and including activities within the meaning of Annex I that are only incidental to the principal object of the contract shall be considered to be a public service contract.
*
Maintenance and repair services happen to be the ones first mentioned among the many categories included in Annex II.
***
Procurement Directive
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 (published OJ 30.4.2004 L 134/114).
The consolidated version of 1 January 2008 of the Procurement Directive 2004/18/EC is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
In writing, economic operator and contracting authority are among the concepts given definitions.
***
Definition: Public contracts
Article 1.2(a)
‘Public contracts’ are contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services within the meaning of this Directive.
***
In writing
After taking note of contracts and a pecuniary interest, we turn to the meaning of ‘in writing’. This leads us to a broad definition in Article 1.12:
12. ‘Written’ or ‘in writing’ means any expression consisting of words or figures which can be read, reproduced and subsequently communicated. It may include information which is transmitted and stored by electronic means.
Electronic means are further explained in the following paragraph, 1.13:
13. ‘Electronic means’ means using electronic equipment for the processing (including digital compression) and storage of data which is transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means.
***
Economic operator
Economic operator is a convenient term to cover the concepts of contractor, supplier and service provider, as described in Article 1.8:
8. The terms ‘contractor’, ‘supplier’ and ‘service provider’ mean any natural or legal person or public entity or group of such persons and/or bodies which offers on the market, respectively, the execution of works and/or a work, products or services.
The term ‘economic operator’ shall cover equally the concepts of contractor, supplier and service provider. It is used merely in the interest of simplification.
An economic operator who has submitted a tender shall be designated a ‘tenderer’. One which has sought an invitation to take part in a restricted or negotiated procedure or a competitive dialogue shall be designated a ‘candidate’.
***
Contracting authority
What makes procurement public is the existence of a contracting party subject to public law, laid out broadly enough to cover many organisations established under the rules of private law, as elaborated in more detail in Article 1.9:
9. ‘Contracting authorities’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law.
A ‘body governed by public law’ means any body:
(a) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) having legal personality; and
(c) financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
Non-exhaustive lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in (a), (b) and (c) of the second subparagraph are set out in Annex III. Member States shall periodically notify the Commission of any changes to their lists of bodies and categories of bodies.
*
An indicative list of contracting authorities is contained in Annex III List of bodies and categories of bodies governed by public law as referred to in the second subparagraph of Article 1(9).
***
Object
The object of the public contract is the execution of works, the supply of products or the provision of services.
Works
For the definition of public works contracts we turn to the definition in Article 1.2(b):
(b) ‘Public works contracts’ are public contracts having as their object either the execution, or both the design and execution, of works related to one of the activities within the meaning of Annex I or a work, or the realisation, by whatever means, of a work corresponding to the requirements specified by the contracting authority. A ‘work’ means the outcome of building or civil engineering works taken as a whole which is sufficient of itself to fulfil an economic or technical function.
*
Typically, the outcome is a building or a road.
***.
Products
Article 1.2(c) of the Procurement Directive 2004/18/EC places products at the centre of a public supply contract:
(c) ‘Public supply contracts’ are public contracts other than those referred to in (b) having as their object the purchase, lease, rental or hire purchase, with or without option to buy, of products.
A public contract having as its object the supply of products and which also covers, as an incidental matter, siting and installation operations shall be considered to be a ‘public supply contract’
*
Buying office paper or leasing a new car fleet could be thought of as examples.
***
Services
After excluding works and products, Article 1.2(d) refers to the services mentioned in Annex II Services referred to in Article 1(2)(d).
d) ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.
A public contract having as its object both products and services within the meaning of Annex II shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.
A public contract having as its object services within the meaning of Annex II and including activities within the meaning of Annex I that are only incidental to the principal object of the contract shall be considered to be a public service contract.
*
Maintenance and repair services happen to be the ones first mentioned among the many categories included in Annex II.
***
Procurement Directive
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 (published OJ 30.4.2004 L 134/114).
The consolidated version of 1 January 2008 of the Procurement Directive 2004/18/EC is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
Ralf Grahn
Saturday, 1 November 2008
EU public procurement: Best practices for small business I
What can the European Union and the national administrations do to open up public procurement to small businesses?
Improved possibilities for small and medium sized enterprises (SMEs) would offer them growth potential, and more vigorous competition would lead to better use of taxpayers’ money when contracting for works, supplies and services.
***
Against the backdrop of the Small Business Act for Europe (see earlier post), the European Commission presents its suggestions in the Commission staff working document ‘European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts’, Brussels, 25.6.2008 SEC(2008) 2193 (22 pages):
http://ec.europa.eu/internal_market/publicprocurement/docs/sme_code_of_best_practices_en.pdf
***
Purposes
According to the Commission, the overall objective of the ‘European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts’ is to allow Member States and their contracting authorities to fully exploit the potential of the Public Procurement Directives in order to ensure a level playing field for all economic operators wishing to participate in public tendering.
In other words, the Code of Best Practices sets out to answer what can be done within the boundaries of EU procurement legislation, by improving contracting authorities’ procurement culture.
Two purposes follow from this:
1) Guidance on how member states and their contracting authorities can apply the EC legal framework in a way which facilitates SMEs' participation in contract award procedures.
2) Positive national rules and practices that enhance SMEs' access to public contracts are highlighted.
The Code of Best Practices deals with a number of problem areas. The problems and solutions offer a good point of departure for ministerial guidance and improved practices among procurement entities.
At the same time, for small businesses intent on expansion into public contracts the document contains useful information on many aspects of public, as well as references to additional sources.
***
Contract size
Contracts are often too big for small and medium sized companies.
Contracts can be divided into lots, which take the capacity and the niche of small businesses into account.
Small enterprises may bid as a group, and contract authorities can draw attention to this possibility.
Framework agreements can be concluded with several economic operators, instead of just one big supplier.
Sub-contracting offers an alternative for small and medium sized enterprises, if the conditions are fair.
***
Information on business opportunities
E-procurement is one possibility to ensure quick, cheap and easy information on business opportunities to SMEs, but in some countries their features could be improved and central portals launched. Information in other Community languages would bring taxpayers added single market benefits.
SMEs can get advice and support from the Enterprise Europe Network (EEN).
The contract authorities have an obligation to give bidders feedback, which gives the companies the opportunity to improve their future bids.
***
Clear information
Training and guidance for contracting authorities should take account of the needs of small businesses for clear information.
There is a need to improve conferences, seminars, training sessions and helpdesk services, especially for SMEs.
***
We will look at the rest of the suggestions in a future blawg post.
Ralf Grahn
Improved possibilities for small and medium sized enterprises (SMEs) would offer them growth potential, and more vigorous competition would lead to better use of taxpayers’ money when contracting for works, supplies and services.
***
Against the backdrop of the Small Business Act for Europe (see earlier post), the European Commission presents its suggestions in the Commission staff working document ‘European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts’, Brussels, 25.6.2008 SEC(2008) 2193 (22 pages):
http://ec.europa.eu/internal_market/publicprocurement/docs/sme_code_of_best_practices_en.pdf
***
Purposes
According to the Commission, the overall objective of the ‘European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts’ is to allow Member States and their contracting authorities to fully exploit the potential of the Public Procurement Directives in order to ensure a level playing field for all economic operators wishing to participate in public tendering.
In other words, the Code of Best Practices sets out to answer what can be done within the boundaries of EU procurement legislation, by improving contracting authorities’ procurement culture.
Two purposes follow from this:
1) Guidance on how member states and their contracting authorities can apply the EC legal framework in a way which facilitates SMEs' participation in contract award procedures.
2) Positive national rules and practices that enhance SMEs' access to public contracts are highlighted.
The Code of Best Practices deals with a number of problem areas. The problems and solutions offer a good point of departure for ministerial guidance and improved practices among procurement entities.
At the same time, for small businesses intent on expansion into public contracts the document contains useful information on many aspects of public, as well as references to additional sources.
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Contract size
Contracts are often too big for small and medium sized companies.
Contracts can be divided into lots, which take the capacity and the niche of small businesses into account.
Small enterprises may bid as a group, and contract authorities can draw attention to this possibility.
Framework agreements can be concluded with several economic operators, instead of just one big supplier.
Sub-contracting offers an alternative for small and medium sized enterprises, if the conditions are fair.
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Information on business opportunities
E-procurement is one possibility to ensure quick, cheap and easy information on business opportunities to SMEs, but in some countries their features could be improved and central portals launched. Information in other Community languages would bring taxpayers added single market benefits.
SMEs can get advice and support from the Enterprise Europe Network (EEN).
The contract authorities have an obligation to give bidders feedback, which gives the companies the opportunity to improve their future bids.
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Clear information
Training and guidance for contracting authorities should take account of the needs of small businesses for clear information.
There is a need to improve conferences, seminars, training sessions and helpdesk services, especially for SMEs.
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We will look at the rest of the suggestions in a future blawg post.
Ralf Grahn
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