EU procurement revision provides 'simplified and more flexible' rules

New public procurement rules are an 'important step' towards providing better quality public services for Europe's citizens, argues Sirpa Pietikäinen.

By Sirpa Pietikäinen

Sirpa Pietikäinen (FI, EPP) is a member of Parliament’s Special Committee on the Protection of Animals during Transport, and a substitute member of Parliament’s Committee on the Environment, Public Health and Food Safety

27 Aug 2014

The reformed directive on public procurement, voted in the parliament at the beginning of this year and becoming applicable in the member states in 2016, marks a sea change in the provision of public services. The rules will be clarified in a way that no longer deems the cheapest price as the only factor in competitive bidding. The directive acknowledges the specificities of social services as general interest services, provides simplified and more flexible rules and procedures and substitutes the lowest price criteria with the 'most advantageous economic tender'. The revision of public procurement rules is an important step to pave the way for one of the EU priorities: how to sustainably produce quality services that are affordable and adequate for the European citizens?

"Strict state aid rules threaten to destroy the means of action for various third sector providers of social services in situations where no viable market based alternatives exist"

First, the role of end-users should be enhanced. This was not very well reflected in the revised directive but will hopefully be taken into account at national levels when national laws are revised accordingly. Also non-governmental organisations, many of which represent end-users and/or provide public services, should be taken more into consideration when designing public services. Second, there needs to be flexibility when it comes to decisions on which public services the procurement rules apply to. The revised directive reinforced the competence of member states to decide which public services it opens to bidding. This is an important provision to maintain as there are several 'services of general interest' where procurement rules do not necessarily help to achieve sustainable and better quality services. In my view, in all levels of public administration, competitive bidding must be preceded by an investigation of the market structure for the demand and supply of the service in question. This means that the public services are opened for bidding only if it has been tested that true market demand for certain services exist. For example, maintaining a shelter for stray cats or providing assistant dogs for visually impaired people do not usually have true market demand and thus should be left outside the procurement rules. In my native Finland, strict state aid rules threaten to destroy the means of action for various third sector providers of social services in situations where no viable market-based alternatives exist.

Problems and inconsistencies related to procurement practices occur in all EU countries, and with joint rule framework we have the possibility to achieve better public services and strengthen the internal market at the same time. These rules need to be revised and applied in firm cooperation between EU legislators, member states and organisations. I am feeling optimistic about the possibilities of the reformed directive to promote various societal goals that the European Union has been looking to achieve through its Europe 2020 strategy. Public procurement investments constitute approximately 20 per cent of the EU's GDP. Questions related to resource efficiency, employment and social justice have to be taken into account in all levels of public administration responsible for procurement decisions.

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