THE PUBLIC PROCUREMENT DIRECTIVE AN ANALYSIS OF PROVISIONS FOR PEARLE MEMBERS Ref/ _SL/P6644

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1 THE PUBLIC PROCUREMENT DIRECTIVE AN ANALYSIS OF PROVISIONS FOR PEARLE MEMBERS Ref/ _SL/P6644 In December 2011 the Commission launched a proposal on the revision of public procurement rules. After a long procedure the final compromise text was adopted on 11 February The new has to be transposed into national law by 18 April The aim of the new [2014/24/EU] is to increase the efficiency of public spending, to simplify the rules (which are still complex) and open up markets for small and medium sized companies. What is the impact on the live performance sector? Certain service contracts in the cultural field fall under public procurement rules provided that they are commissioned by public institutions. Experience of Pearle* members shows that these rules can vary considerably throughout European countries. We therefore advise members to closely follow the implementation of the public procurement to ensure it doesn t interfere with business activities. The analysis works with Q&A s and refers to relevant provisions in the new. It is structured in three parts as follows: 1. Contracts in the live performance sector falling under public procurement rules 2. The simplified procedure for cultural services 3. The negotiated procedure for highly complex works

2 1. Contracts in the live performance sector falling under public procurement rules Relevant information for employers in the live performance sector 1. Which institutions in the live performance sector have to follow rules on public procurement? Quick answer Public institutions, i.e. bodies governed by public law Provisions of the new Art. 2 (4) bodies governed by public law means bodies that have all of the following characteristics: (a) they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character; Further explanations Reference new Art. 2 (4) (b) they have legal personality; and 2. Which types of contracts fall under the rules? The differentiates between 3 types of contracts: public works contract, public supply contract and (c) they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law; or are subject to management supervision by those authorities or bodies; or have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law; Threshold for public works contracts: EUR 5,186,000 Thresholds for public supply and service contracts: EUR 207,000 Art. 2 (5)-(9) Chapter 1, Section 2,

3 3. What is a public works contract? public services contract. They fall under the scope of the if they exceed certain thresholds (see further explanations) In general, it means contracts covering all works related to a building: the construction of a building, renovation, building installations, design Art. 2 (6) public works contracts means public contracts having as their object one of the following: (a) the execution, or both the design and execution, of works related to one of the activities within the meaning of Annex II; (b) the execution, or both the design and execution, of a work; Threshold for public service contract for cultural services: EUR 750,000 Example in the live performance sector: The renovation of a theatre or the installation of electronic wiring or a new insulation Art. 4 Art. 2 (6) 4. What is a public supply contract? 5. What is a public service contract? Supply contracts are linked to the purchase or the renting of a product Service contracts include all services other than those linked to buildings (c) the realisation, by whatever means, of a work corresponding to the requirements specified by the contracting authority exercising a decisive influence on the type or design of the work; Art. 2 (8) public supply contracts means public contracts having as their object the purchase, lease, rental or hire-purchase, with or without an option to buy, of products. A public supply contract may include, as an incidental matter, siting and installation operations; Art. 2 (9) public service contracts means public contracts having as their object the provision of services other than those referred to in point 6; Example in the live performance sector: renting of musical instruments (probably this does not fall under the scope of the as the amount for renting the instruments wouldn t exceed the threshold) Example in the live performance sector: a public theatre commissions an artistic service (a theatre play) to a theatre Art. 2 (8) Art. 2 (9)

4 6. Is there an exemption for contracts in the cultural field? 7. How to define a cultural service? It is not a full exemption from the rules; however, for cultural services a simplified procedure and a higher threshold apply (EUR 750,000), under the category social and other specific services in Art The includes cultural services in their definition of other specific services. Beneficiaries of the text are listed in annex XIV, using the so called CPV code. 8. What is the CPV code? The CPV (Common procurement vocabulary) establishes a single classification system for public procurement aimed at standardising the references used by contracting authorities and entities to describe the subject of Art. 74 Public contracts for social and other specific services listed in Annex XIV shall be awarded in accordance with this Chapter, where the value of the contracts is equal to or greater than the threshold indicated in point (d) of Article 4. company Annex XIV includes all artistic services, arts facility operation services, dance and performance entertainment services and archive services. The CPV consists of a main vocabulary for defining the subject of a contract, and a supplementary vocabulary for adding further qualitative information. The main vocabulary is based on a tree structure comprising codes of up to 9 digits associated with a wording that describes the type of supplies, Chapter III, Art Annex XIV The CPV code can be found here And in the following EU law: Regulation EC/213/2008

5 9. Does my theatre/opera house/orchestra/venue need to use the CPV code? 10. In case the value of a cultural service contract is less than does it fall under public procurement rules? 11. In case the value of a public works or supply contract is less than does it fall under public procurement rules? procurement contracts. Contracting authorities have to use it to find the code that suits their envisaged purchase as accurately as possible when filling the notice of calls for competition. In that case it doesn t fall under European rules. ATTENTION: Thresholds in Member States can differ from the framework directive In that case it doesn t fall under European rules. ATTENTION: Thresholds in Member States can differ from the framework directive works or services forming the subject of the contract. The use of the CPV is mandatory in the European Union as from 1 February The simplified procedure for cultural services contracts Relevant information for employers in the live performance sector 13. What does simplified procedure mean exactly? Quick answer It means that a cultural institution awarding a Provisions of the new Further explanations The publication of notice and a contract award notice is needed. Reference new Chapter III,

6 14. For which contracts does the simplified procedure apply? contract under these rules doesn t have to follow all the information and publication requirements of a normal public procurement procedure It applies for public services contracts in the cultural field. Member States can define the principles of awarding contracts. For example, they may provide that one has to choose the service provider with the best pricequality ratio. (Art.76(2)) See question 6 and 7 for more information Art Chapter III, Art Is a publication of notices necessary? At EU level, all contracts below the EUR 750,000 threshold are exempted from public procurement rules In general, a publication of notices is necessary. However, where a negotiated procedure without prior publication (see point 3) can be used, the publication rule doesn t apply (even if the contract falls under the simplified procedure). Art. 75 (1) Contracting authorities intending to award a public contract for the services referred to in Article 74 shall make known their intention by any of the following means: (a)by means of a contract notice, which shall contain the information referred to in Annex V Part H, in accordance with the standard forms referred to in Article 51; or (b)by means of a prior information notice, which shall be published continuously and contain the information set out in Annex V Part I. [ ] See under point 3 on the negotiated procedure Title III, Art. 75 (1)

7 The first subparagraph shall, however, not apply where a negotiated procedure without prior publication could have been used in conformity with Article 32 for the award of a public service contract. 3. The negotiated procedure for highly complex works Relevant questions for employers in the live performance sector 16. What can I do if the work/service can only be done by specialised workers/ companies, such as an artistic performance? Answer In this case the foresees procedures with prior negotiations and in specific cases without prior publication, depending on the kind of works and the circumstances. Provisions of the new Art. 26 (4) Member States shall provide that contracting authorities may apply a competitive procedure with negotiation or a competitive dialogue in the following situations: (a)with regard to works, supplies or services fulfilling one or more of the following criteria: (i)the needs of the contracting authority cannot be met without adaptation of readily available solutions; Further explanations In procedures with negotiations the contracting authority has to invite selected candidates to submit their tenders. Reference new Title II, Chapter 1, Art. 26 (4), (6) Chapter III, Section 2, Art. 54 (ii)they include design or innovative solutions; (iii)the contract cannot be awarded without prior negotiations because of specific circumstances related to the nature, the complexity or the

8 legal and financial make-up or because of the risks attaching to them; (iv)the technical specifications cannot be established with sufficient precision by the contracting authority with reference to a standard, European Technical Assessment, common technical specification or technical reference within the meaning of points 2 to 5 of Annex VII; 17. When may a negotiated procedure without prior publication be applied in the cultural sector? It may be applied when a work or service can only be supplied by a particular economic operator. The refers to artistic works as one case where this kind of procedure might be needed as it is too specific to be supplied by any operator. It can also be applied: Art. 26 (6) In the specific cases and circumstances referred to expressly in Article 32, Member States may provide that contracting authorities may apply a negotiated procedure without prior publication of a call for competition. [..] Art. 32 (2) The negotiated procedure without prior publication may be used for public works contracts, public supply contracts and public service contracts in any of the following cases: (a) where no tenders or no suitable tenders or no requests to participate or no suitable requests to participate have been submitted in response to an open procedure or a restricted procedure, provided that the initial conditions of the contract are not substantially altered and that a report is sent to the Commission where it so requests. ATTENTION: The implementation of this provision is not compulsory for Member States. Please follow the implementation process in your country. Title II, Chapter 1, Art. 26 (6) and Art. 32 (2); (5)

9 18. Which threshold is valid for a contract to be published under the negotiated procedure without prior publication? - when no suitable tender has been found with an open procedure. - for new works or services consisting in the repetition of similar works or services entrusted to the operator before There can be overlaps between the grounds for negotiated procedure and the simplified procedure for social and other services (such as cultural services). If a certain public contract falls (b) where the works, supplies or services can be supplied only by a particular economic operator for any of the following reasons: (i)the aim of the procurement is the creation or acquisition of a unique work of art or artistic performance; Art. 32 (5) The negotiated procedure without prior publication may be used for new works or services consisting in the repetition of similar works or services entrusted to the economic operator to which the same contracting authorities awarded an original contract, provided that such works or services are in conformity with a basic project for which the original contract was awarded pursuant to a procedure in accordance with Article 26(1). The basic project shall indicate the extent of possible additional works or services and the conditions under which they will be awarded. Article 75 on publication of notices for social and other services refers to the negotiated procedure without prior publication stating that the first subparagraph shall not apply to such procedures. See: Title III,

10 under the special rules for social or other services and its value is below the threshold of EUR 750,000, then the will not apply to this contract, irrespective of whether this contract would also fit into one of the categories of the negotiated procedure without publication of a notice. If the value of the same contract is above EUR 750,000, it is for the contracting authority to decide which procedure type it will use. chapter I, Art. 75 (1)