Social Economy Intergroup of the European Parliament
Introducing balance into procurement
Seven years since the last reform, a thoroughgoing review of the rules for public procurement is under way. The most significant outcome could be the abolition of the system of accepting the cheapest offer. This would oblige public authorities to assess the broad economic costs and benefits. A question mark still hangs over how social and environmental factors should be taken into account.
The main item discussed at the Social Economy Intergroup on 12 April 2011, chaired by Marie-Christine Vergiat, was the reform of public procurement rules, which affect a sixth of Europe’s purchasing.
Esther Schmidt from the internal Market DG explained that the Commission will be making a legislative proposal by early 2012, as one of the priorities of the Single Market Act. Consultation on January’s green paper closes on 18 April, and the results will be presented at a major conference on 30 June.
The main issues raised are:
- the procedures are too complex, slow and expensive
- SMEs find it hard to access contracts
- the better use of public procurement to assist EU policies: for instance environmental, social or innovation policies
Responding to questions, Ms Schmidt agreed that impact measurement was an important issue, and said that DG MARKT would be thinking about what indicators and methods could be used. She pointed out that many issues are two-edged: measures such as breaking contracts into small lots or imposing impact measurement also make procedures more complicated.
See DG MARKT's 'roadmap' of the modernisation: http://ec.europa.eu/governance/impact/planned_ia/docs/2011_markt_017_public_procurement_en.pdf
Abolishing the cheapest offer
The rapporteur on this issue, German Green MEP Heide Rühle, announced her intentions as regards the review of public procurement law. The timetable will be that following a hearing on 24 May, the Internal Market and Consumer Protection Committee (IMCO) will debate the directive on 11-12 July. The deadline for amendments will be 19 July, the vote in committee on 19 September and the plenary vote on 2 October.
The 24 May hearing will focus on innovative methods. Many procurers have learnt that the safest option is to choose the cheapest offer – but this type of cost-cutting often conflicts with achieving policy goals. Therefore her first priority is to get rid of the “cheapest offer” option, thus insisting that all buying decisions should be made on the basis of the “most economically advantageous offer” (MEAT). This idea was amplified by a speaker from the floor, whose response to the consultation proposes that “most economically advantageous” be expanded to “most economically, socially and environmentally advantageous”.
The second priority is to achieve parity between environmental and social considerations in the specifications of a call for tender. At the moment, the specifications have to be linked to the product which is being bought. The Commission’s view is that it is permissible to take the production process into account in the case of environmental factors such as energy use – but not in the case of social factors such as working conditions. Yet people as well as things are factors of production.
Thirdly, quotas for sheltered workshops: should these be imposed at EU level, or decided locally? An issue here is that most authorities only procure above the quota once a year.
A fourth issue is legal security. On one hand, the scope of public procurement is undefined. For instance the ECJ says that procurement rules don’t apply to town planning – yet there have been infringement cases. On the other hand, what is a public authority? Do consortia count? The ECJ says forming a consortium does NOT fall under PP rules – but we need clarity.
We need to introduce innovations in procurement, such as:
- negotiated procedure
- pre-commercial procurement
- tender for quality, instead of price
Finally there is the crucial issue of favouring local producers. It is illegal to discriminate – yet we need to take sustainability into account, especially in fields such as catering.
Ms Rühle concluded by noting that the last revision of the procurement directives in 2004 had failed to achieve its objective of combining simplification with flexibility – but that maybe this time it would succeed.
Heide Rühle: http://www.heide-ruehle.de
TIME: 12.30pm to 2.30pm
PLACE: Room ASP 5E2 - EUROPEAN PARLIAMENT – BRUSSELS
- Introduction and presentation of the activities of the social economy intergroup (co-chair of the intergroup)
- Guest speaker: M. Staffan NILSSON - President of the European Economic and Social Committee
Second part: The modernisation of EU public procurement policy
- European Parliament (vice-president of the intergroup)
- European Commission - DG Internal Market and Services
- Stakeholder (tbc)
- Conclusions: co-chair of the intergroup
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Karine Pflüger - SOCIAL ECONOMY EUROPE
On behalf of the secretariat of the social economy intergroup