PLC Public Sector reports:
In response to the European Commission’s Green Paper on the modernisation of EU public procurement policy, the Local Government Group (LGG) has set out its wish list of reforms. In short, the LGG wants:
- The public procurement regime to apply to far less contracts.
- The regime to allow far more freedom to negotiate and generally run the process when it does apply.
- To greatly reduce the risk of legal challenge to procurement processes.
It seems unlikely that these overarching goals will be achieved, however the LGG paper makes many sound points, which we hope are not lost in light of its over ambitious general tone.
In defence of the LGG, the Green Paper did ask for wide ranging views on fundamental aspects of the public procurement regime and talked of providing “flexible and user-friendly tools that make transparent and competitive contract awards as easy as possible for European public authorities and their suppliers”. Few that have had dealings with the public procurement regime would claim that it regularly delivers against this goal at present. It is also difficult to disagree with the LGG paper’s statement that the primary objective of the public procurement regime should be:
“to ensure a basic level of fair competition in line with Treaty principles and not over-regulate or micro-manage procurement arrangements within member states.”
However the tone of the Green Paper was very much one of evolution and not revolution. While it suggested the possibility of more use of the negotiated procedure and a blurring of the Commission’s previously rigid interpretation of the rules on selection and award criteria, it did so with clearly stated views that taking such steps could lead to breaches of the principle of equal treatment and the distortion of competition. Therefore, we can expect that any such changes will only apply in limited circumstances with additional safeguards put in place to protect against abuse. Further the Green Paper highlights numerous areas where the Commission suggests that the public procurement regime could become more prescriptive, for example in delivering a green economy, rather than appearing to be the first step in a retreat from micro-management.
Therefore by making suggestions that:
- Thresholds for services and supplies contracts could be raised from little more than £150,000 to nearly £4,000,000;
- All public procedures should allow negotiation with tenderers; and
- The Remedies Directive should be rewritten to only allow limited scope for challenge to procedures;
the LGG paper is at risk of being overlooked when the Commission considers its next steps. This would be a shame as the paper does make numerous good points including:
- The need for the Teckal in-house exception to be embedded in the public procurement regime and not left as an issue solely for judicial interpretation.
- The proposal of a solution to the key issue facing any public sector spin out company – it is not guaranteed to win any work from the authority that it spins out from. The LGG suggests an exclusion for “dowry” contracts awarded to spin outs for a period of up to three years.
- Some sensible suggestions for tackling the current separation of selection and award criteria, including that pre-qualification information should be standardised and that selection and award criteria may need to be looked at alongside each other.
- A suggestion that the potential length of a framework agreement should be extended from four to six years, with a mechanism that allows new providers to join the framework during its term.
- An acknowledgment that “policy through procurement” is a worthy use of public procurement spend and not to be discouraged, but that prescriptive requirements (whether from EU or National Government) tend to over complicate matters and do not necessarily deliver tangible benefits that exceed the impact they have on the cost of the procurement.
Whatever success the LGG has in convincing the Commission to act on its suggestions, the paper highlights the key issues that face local government procurement officers and the lawyers that advise them and should be required reading for all such people.