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EU public procurement changes come into force

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EU public procurement changes come into force

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(BRUSSELS)- New rules designed to open up the EU's public procurement market to competition and prevent 'buy national' policies by public authorities came into force on Monday.

On 18 April all EU Member States and their public authorities were required to have in place legislation which implements three Directives on public procurement and concessions which were adopted in 2014.

The new rules will make it easier and cheaper for small and medium-sized enterprises (SMEs) to bid for public contracts. The Commission says they will ensure the best value for money for public purchases and will respect the EU's principle of transparency and competition.

They also allow for environmental and social considerations, as well as innovation aspects to be taken into account when awarding public contracts, so that public procurement encourages progress towards particular public policy objectives.

The revised rules cover over 250,000 public contracting authorities, and are designed promote the free movement of goods and services.

Internal market Commissioner Elzbieta Bienkowska said the new rules would help ensure that taxpayers' money that goes into the public purchase of goods, works and services is well spent. They will "further simplify public tender procedures and render them more flexible to the benefit of SMEs in particular. They also encourage the shift towards an energy and resource efficient economy alongside the well-established objective of achieving the best quality-price ratio."

Simplifying the participation of SMEs

Contracting authorities will be encouraged to divide large contracts into smaller parts, allowing smaller companies to participate in large tenders. Rules which excluded smaller companies from tenders on the basis of their annual turnover figures have been relaxed. The new rules limit possible turnover requirements to just twice the contract value, which should remove barriers to SME participation.

The European Single Procurement Document (ESPD) considerably reduces the administrative burden for businesses by enabling them to electronically self-declare that they fulfill the required conditions to participate in a public procurement procedure. Only the successful tenderer will need to provide full documentary evidence, but in the future, even this obligation could be lifted once evidence can be linked electronically to national databases.

Promoting a more responsible economy

The rules allow public bodies to promote social inclusion, innovation, and ensure the compliance of tender awards with all relevant rules and obligations (be they at national, EU or international level). Public authorities can now provide incentives to companies to develop socially responsible products and services. The awarding of a contract will no longer depend on price alone; a company committed  to helping integrate disadvantaged persons, for example, might increase their chances of success.

Contracting authorities can now restrict some tendering procedures to social enterprises of all types where at least 30% of  the employees are disadvantaged. This means that 'sheltered workshops' or social enterprises whose main aim is to integrate disadvantaged people in the workplace can have a better chance to obtain contracts they might not be able to secure under normal conditions of competition.. However, contracting authorities will not be obliged to use the new possibilities to promote socially responsible goods, services and works, nor are they obliged to externalise the provision of services that they wish to organise themselves.

Public authorities can also encourage eco-innovation by using new criteria in contract notices which place more emphasis on environmental considerations. They can require bidders not only to comply with environmental obligations, but also to deliver goods fulfilling the requirements of environmental labels. In this way, companies can make an important contribution to sustainable consumption and production.

Preventing corruption

The new rules will ensure that taxpayers' money is not lost by introducing stronger guarantees for sound procedures preventing corruption. More efficiency will free up billions in public money – just a 1 % increase in efficiency will lead to savings of €20 bn! The measures include:

  • an EU-level definition of 'conflicts of interest' making it easier to identify and manage fraud and conflict of interest cases
  • a requirement for public purchasers to share any information given to a company involved in a previous tender with all other participating companies
  • excluding companies if they are found to have unduly influenced the decision-making process or made false statements
  • clarifying and simplifying the rules for modifying contracts in the post-award period to remove any doubts about possible corruption
  • increased reporting explaining decisions and violations to both national authorities and the European Commission
  • greater use of electronic tools and simpler procedures (e-procurement, dedicated legal framework for concession contracts, standard self-declaration form for bidders).

Further information

New rules on public procurement and concession contracts

Directive 2014/24/EU on public procurement

Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors

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