New Directives on Public Procurement. Dr. Manfred Kraff, Deputy Director-General DG Budget, European Commission Portorož - Slovenia, 23rd April 2015

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1 New Directives on Public Procurement Dr. Manfred Kraff, Deputy Director-General DG Budget, European Commission Portorož - Slovenia, 23rd April 2015

2 AGENDA Ø Background Ø Legal Framework in Public Procurement Ø Procurement Errors in EU Projects Ø Main Changes in the Directives Ø Decrease Overall Error Rate through Transposition

3 Background Ø Definition for public procurement: Process by which public authorities purchase work, goods or services from companies which they have selected for this purpose Ø EU Directives: Implementation of principles and freedoms established by EU Treaties Ø Procurement under EU Directives: EUR 425 billion or 3.4 % of EU GDP (2011 figures)

4 Legal Framework in Public Procurement (1) Ø Initial Directives were adopted in /17/EC: Procurement in the water, energy, transport and postal services sectors 2004/18/EC: Public works, supply and service contracts Ø Need for reforms due to budgetary constraints and economic, social and political developments Simpler and more efficient rules for public purchasers and companies Best value for money for public purchases Respect of principles of transparency and competition

5 Legal Framework in Public Procurement (2) Ø Proposed revision by the Commission: December 2011 Ø Vote by the European Parliament: 15 January 2014 Ø Adoption by the Council: 11 February 2014 Ø Transposition by the Member States in national law Deadline: April 2016 Exception e-procurement: September 2018

6 Legal Framework in Public Procurement (3) Ø Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement Ø Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors Ø Information on public procurement: ec.europa.eu/growth/single-market/public-procurement/index_en.

7 Procurement Errors in EU Projects (1) Ø Main types of irregularities identified by European Court of Auditors Non-respect of publication thresholds Unauthorised negotiation during award procedure Substantial modification of contracts Restrictive selection / award criteria Disproportionate selection / award criteria Lack of transparency and equal treatment Ø leading to lack or distortion of competition

8 Procurement Errors in EU Projects (2) DAS 2013: Contribution to overall error rate by type

9 EU Discharge/Budgetary Authorities' concerns European Parliament, Report on Discharge 2013: 144. ' points out that Directive 2014/24/EU of the European Parliament and of the Council is to be implemented by Member States until 18 April 2016; considers that it will bring considerable changes in procurement procedures and might necessitate further methodological changes;' Council, Recommendation for Discharge 2013: 8. ' The Council stresses that any simplification of the national public procurement rules should aim at limiting errors, whilst fully ensuring the protection of the Union's financial interests. Finally, in the light of the newly revised public procurement rules and procedures, the Council invites the Commission to ensure through its technical assistance that the recently updated guidelines on public procurement are disseminated and understood by all relevant actors.'

10 Main Changes in the Directives (1) Ø Simplified and more flexible public procurement procedures for both public purchasers and businesses Possibility to negotiate terms of contracts that better suit needs Competitive dialogue procedure for particularly complex projects Reduced publicity obligations for regional and local authorities Self-declarations of bidders and full documentation of winning bidder Better access of SMEs by splitting contracts into lots and reduction of required turnover Ø Frame for flexibility in the modification of existing contracts No change of the nature or economic balance of the contract Value does not exceed certain thresholds (application of Directives; 10 % for goods and services; 15 % for work) Unforeseen events or technical reasons, if increase does not exceed 50 % Ø New simplified arrangements for social, cultural and health services and certain others (e.g. hospitality, catering,

11 Main Changes in the Directives (2) Ø Incentive to develop e-procurement Electronic submission of tenders (by 2017 or 2018) European Single Procurement Document to alleviate administrative burden of companies (by 2018) Compulsory use of ecertis Ø Easier bundling of purchases Joint procurement procedures Central purchasing body Ø Procurement as policy instrument Environmental objectives (e.g. life cycle cost and CO2 footprint) Social objectives (e.g. integration of vulnerable or disadvantaged workers) Pro-innovation (e.g. new procedure for purchase of innovative products) Ø National organisation of public services is not affected

12 Decrease Overall Error Rate through Transposition (1) Ø Flexibility on contract modifications Ø Strict interpretation when using exceptions (e.g. negotiated procedure without publication) Ø Professionalisation of procurement through Central Purchasing Bodies to be envisaged Ø E-procurement roll-out (simplification of process, harmonised procedures, easier transparency)

13 Decrease Overall Error Rate through Transposition (2) Ø Avoid 'national gold-plating': Keep open flexibilities of the Directive No extra / unnecessary obligations Transpose objectives and principles in law Provide the 'how to' in soft law

14 Thank you for your attention!

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