Procurement in the waste management sector
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1 Procurement in the waste management sector Presentation to ACR+ PPI4Waste 12 September 2017 Thomas Spoormans, DG GROW.G1 European Commission 1
2 Sectorial analysis of procurement Objective: Improve public procurement conduct by analysing practice and shortcomings in specific sectors and identifying issues that deserve policy attention. Scope: Currently, 4 sectors are being investigated: ICT, Health, Waste management, Energy (electricity)
3 Methodology: Market definition & description of the sectors (Understand who buys what from whom and how) Fact finding and identification of possible malfunctioning (both sector and country specific) Define policy actions & recommendations Expected outcome: Strengthen evidence base for procurement policy, EU Semester and other policy instruments Sharing best practices, solutions to common problems Input into Country strategies and dialogues
4 Waste management - intro Focus on municipal solid waste (MSW) management, not water, not commercial 2 main tasks: waste collection and waste treatment (including sorting) Local authorities can perform each task either in-house or through procurement Sector is highly regulated 4
5 Waste management - economics Size of the EU market: ~40 bn (not only procurement) Size of EU procurement market (above EU thresholds, from TED): ~4.7 bn in enterprises, jobs Some multinationals, many smaller private or public entities 5
6 Waste management - analysis Internal desk research in 2015 Study contracted with Ramboll (Dec 2015 until Sept 2016) Final report available on website: Annexes with Country Report available 6
7 Study outcome 7 countries covered: Germany, Italy, Poland, Romania, Spain, Sweden, and the United Kingdom 1st phase based on desk research and literature review 2 nd phase based on interviews with authorities and stakeholders 7
8 Study outcome main findings Low direct cross-border procurement Indirect cross-border procurement Requiring a location within a specific area Favouring incumbent companies Non-compliance with EU procurement rules Small and medium-sized enterprises felt at a disadvantage 8
9 Study outcome - irregularities cross-subsidisation between their activities cases of direct contract awards to inhouse companies irregularities related to the abuse of a dominant market position Irregularities with concession contracts 9
10 Why is the EU supporting PPI? Get better value for money through cooperation Address issues of common interest together Create growth and jobs in Europe Achieving policy goals (e.g. in health, green etc.) 10
11 Why is the EU supporting PPI some results 20% cheaper products and higher product quality: evidence from the US defense multi competitor, multi phase PCP-PPI procurements Removal of supplier lock-in 20% cost reduction outcome of benchmarking of CHARM PCP on new traffic management centres thanks to move towards open architecture via PCP Benefits for the local economy: Estonia PPI buying Mitsubishi electric vehicles increased local Estonian economic activity in related sectors Opening route-to-market for new players/smes 11
12 Indirect innovation tools: 1. Contract award criteria Most Economically Advantageous Tender (MEAT) Price Cost Legal innovation tools under Directives 2014 Best Price Quality Ratio (BPQR) 2. Technical specifications & Labels Direct innovation tools: Pre-commercial Procurement Innovation Partnership 12
13 Contract Award criteria as innovation tools lifecycle costing Example: if you care about your car s emissions E.g.: Operational lifetime cost CO2 emission of passenger car (Alfa Romeo 147 CO2 emission 155g/km): km x 0,155 kg/km x 0,04 Eur/kg = ,04 imputed operational lifetime cost for CO2 The method used has to be objective and easily accessible 13
14 What can COM do for you in the area of PP of innovation? Coordination and Support Actions (100% funding rate): o Support only coordination activities e.g. preparation of a PCP or PPI by a group of procurers. PCP Actions (90% funding rate): o Provide EU co-financing for an actual PCP procurement (one joint PCP procurement per action) + for related coordination and networking activities (e.g. to prepare, manage and follow-up the PCP call for tender) PPI Actions (35% funding rate): o Provide EU co-financing for an actual PPI procurement (one joint PPI procurement per action) + for related coordination and networking activities (e.g. to prepare, manage and follow-up the PPI call for tender) 14
15 Current developments Brokers for innovation procurement call COSME Guidance for procurement of innovation Public Procurement package 15
16 Contacts Thomas Spoormans Thank you for your attention! 16
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