Policies & Issues

Public Procurement

What is it?

Public procurement law regulates the purchasing by public sector bodies and certain utility sector bodies of contracts for goods, works or services. In December 2011, the European Commission presented a package of three proposals introducing changes in the area of public procurement: a Directive on public procurement, a Directive on procurement by entities operating in the water, energy, transport and postal services sectors, and a Directive on the award of concession contracts. Directive 2014/24/EU on public procurement entered into force in April 2014. The Directive simplifies procedures, shortens limits for participation and submission of offers and reduces the documentation required. Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors and Directive 2014/23/EU on the award of concession contracts also entered into force in April 2014.

Moreover, in March 2012 the Commission presented a draft Regulation that establishes rules for access to companies from non-EU countries to the European public procurement deals as well as related negotiation procedures. The aim of this instrument is to ensure a level playing field for European companies interested in bidding on external public contracts, and to increase the EU’s influence in negotiations on access to the government contracts of other trading partners. 

 

Why is it important?

Public procurement plays a vital role in the EU economy. About 18% of the EU’s gross domestic product comes from authorities spending money on supplies, works and services via public procurement (2012 figures). This covers nearly everything, from public infrastructure to equipment, to all kinds of services provided by the state. EU rules should ensure a level playing field for all companies participating in tenders, including companies from the engineering industry.

 

Our viewpoint

Today’s public procurement rules tend to make tendering for contracts cumbersome and costly. The EU rules on public procurement contracts should therefore be reformed to make it easier for companies to bid. The enabling authorities should be allowed to award contracts not just to the lowest bidder, but to the most innovative firms. Cost-effectiveness, and not only the lowest price criterion, should be a determining factor in awarding contracts. At the same time, Orgalime advocates for only a necessary overhaul of the current legislative framework, arguing that any revision must safeguard transparency, market openness and competitive tendering. The main goal of public procurement rules must be to achieve efficiency in public spending and ensure the best economic value for taxpayers’ money while opening up the internal market.

 

How we’ve been engaged

Orgalime advocates for a balanced reform of the Public Procurement legal framework, making our views known to the European institutions while continuing to monitor the dossier – including in the context of conflict minerals and TTIP discussions.

 

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