How to buy, what to buy

Transcription

1 the voice of the NHS in Europe consultation March 2011 How to buy, what to buy Revising the EU public procurement rules Key points The European Commission Green Paper investigates ways in which the current EU public procurement rules could be revised, to reduce current complexities, increase crossborder contracting, improve access for SMEs and achieve environmental objectives. Recent changes under the Health and Social Care Bill make the procurement rules increasingly important to NHS organisations. The NHS European Office invites views from procurement managers and NHS commissioners on a number of key questions, by Monday 4 April Recent changes under the Health and Social Care Bill place increasing importance on the Any Willing Provider model and greater competition between providers. In light of these changes, EU competition and public procurement rules are becoming ever more important to NHS organisations. In addition, the NHS has been mandated to make significant cost savings, and effective public procurement has been identified as a key means of achieving this. The European Commission s Green Paper consultation to investigate ways in which the current EU public procurement rules could be revised is therefore particularly timely and important. The NHS European Office invites views from NHS procurement managers and commissioners on those aspects of the paper which most closely relate to their work. Given the length and complexity of this consultation, more general views and comments on the issue are also very much encouraged. Revising the rules The European Commission Green Paper acknowledges a number of challenges in relation to the current public procurement rules, for example, with regards to administrative burden and the inflexibility and complexity of existing procedures. It suggests possible measures to overcome these challenges while simultaneously seeking views on how to increase cross-border contracting, better access to public procurement for SMEs, and ways in which public procurement legislation can be shaped to achieve environmental and social policy objectives. The revision also presents an opportunity to reflect recent European Court of Justice (ECJ) Part of

2 The European Commission has responded to calls for a leaner, more flexible set of public procurement procedures decisions which refine the definition of public procurement and clarify the responsibilities of public authorities within it. Part A and Part B services The Green Paper addresses the current distinction within public procurement rules between Part A and Part B services. The European Commission casts doubt on whether it is still appropriate, in view of the economic and legal development of the EU internal market, to maintain a distinction between services which should be subject to the full provisions of the Directives (Part A services) and services which only need comply with the minimal requirements (Part B services). It argues that the distinction between Part A and Part B services was originally introduced because Part B services were far less likely to attract cross-border interest. However, it suggests that this is no longer the case. Furthermore, it is suggested that eliminating the distinction between Part A and Part B services, and applying a standard but lighter regime to all service contracts, would simplify the existing rules. 1. Do you think the distinction between Part A and Part B services should be reviewed? 2. Should the public procurement Directives apply to all services, possibly on the basis of a more flexible standard regime? If not, which services should continue to follow the regime currently in place for Part B services, and why? 3. What impact do you think removing the distinction between Part A and Part B services would have on public procurement and contracting authorities? Thresholds At present, any goods and services contract with a value of less than 101,323 is not subject to public procurement law. The administrative burden involved in tendering for a contract awarded within another EU country is so onerous that the value of the contract needs to be of a high enough value to make it worthwhile. There is a suggestion that in order to attract interest from cross-border bidders, the thresholds should be increased to a much higher value. It should be noted, however, that exempting more contracts from the public procurement rules by raising thresholds would remove the obligation to publish an EUwide contract notice, thereby reducing cross-border business opportunities. 4. Would you advocate that the thresholds for the application of the EU Directives be raised? If so, what should a new threshold be raised to Key questions Should the distinction between Part A and Part B services be renewed? Should thresholds for the application of the public procurement rules be raised? Is the current approach in defining public procurers appropriate? How could public procurement procedures be improved to reduce administrative burden, transaction costs and duration of procedures? Would you support a more flexible approach to the organisation and sequence of the selection and award criteria? Would EU-level rules regarding the scope and criteria for cooperation between public authorites be useful? Should the public procurement rules oblige contracting authorities to take environmental or social policy objectives into account when awarding contracts? How could pre-commercial procurement opportunities be addressed to stimulate innovation? 02

3 5. and what do you think the impact would be? If not, why not? What impact could a removal of the distinction between Part A and Part B services and a significant raising of the thresholds have on public procurement/contracting authorities? The current EU public procurement rules The EU public procurement rules govern the way in which public bodies procure goods, services and works. They apply whenever a purchase by a public body exceeds the minimum financial thresholds set by the legislation. The rules are applied to ensure that public sector contracts are not simply awarded to a chosen provider, but are open to competition in line with the EU s principles of free movement of goods and services across the European Union. Definition of public procurers Public procurement rules apply to bodies governed by public law. This includes legally independent organisations which have close links with the state and fundamentally act like state bodies. The current reforms in the NHS raise questions regarding which bodies would be covered by this definition. According to recent ECJ judgements, bodies governed by public law: EU public procurement legislation currently draws a distinction between Part A and Part B services. Part A services, or priority services, are those which are subject to the full requirements of the EU public procurement Directives. These include, for example, the advertisement of the tender in the Official Journal of the European Union (OJEU). Part B services, or residual services, do not have to be advertised in the OJEU, but they do need to comply with EU provisions on technical specifications. A notice must be placed in the OJEU once a contract has been awarded. Health and social care are classified as Part B services. Procurers and commissioners should, however, take into account that when purchasing Part B services the key principles of the EU Treaty, such as transparency, non-discrimination and equality, have always to be complied with. have the specific purpose of meeting needs in the general interest not having an industrial or commercial character have their own legal personality (under private or public law) depend closely, for their financing, management or supervision, on the state, regional or local authorities or other bodies governed by public law. 6. Is the current approach to defining public procurers appropriate? Should the concept of a body governed by public law be clarified? If so, how? Improving the tools available to public authorities The European Commission has responded to calls for a leaner, more flexible set of public procurement procedures by inviting views on the current level of detail within the rules and asking whether a single set of basic rules, possibly in the form of a Regulation, would help to achieve this. 7. Is the current level of detail in the EU public procurement rules appropriate? If not, are they too detailed or not detailed enough? 8. a. b. What kind of legislative instrument would be preferable? A Regulation? This would comprise a single set of core public procurement procedures directly applicable in member states. A Regulation would leave EU countries free to legislate in areas not covered by the Regulation. A Directive (currently the case)? This would require member states to implement a more detailed set of rules, but they would have more freedom in terms of how to do this. 03

4 Modernising procedures There are currently a number of different procedures in place which procurers may use under various conditions. These include, among others: the open, restricted, and negotiated procedures; competitive dialogue; accelerated procedure; and the award of framework agreements. The Green Paper reflects concerns that the Directives need updating in order to reduce administrative burden and to offer contracting authorities the best possible toolkit for efficient procurement. Furthermore, the Commission acknowledges a need to revise the existing procedures in light of the increasing importance of publicprivate partnerships. 9. How could procedures be improved in order to alleviate administrative burdens, reduce transaction costs and duration of procedures, while ensuring best value for money? 10. What other types of procedures could increase the cost-effectiveness of public procurement procedures? 11. Should existing tools and procedures, provided to address specific needs and to facilitate private participation in public investment through public-private partnerships, be maintained in their current forms*, modified (if so, how?) or abolished? * for example, dynamic purchasing system, competitive dialogue, electronic auctions, design contests 12. Do you have experience of using the accelerated procedure? If so, would you support a generalisation of this possibility of shortening deadlines under certain conditions? Could this be done without jeopardising the quality of offers? More negotiation In order to address calls for more flexibility within procurement procedures, the following questions invite stakeholders to comment on the possible advantages and risks of allowing more negotiation within the procurement process. 13. Would you support more negotiation in public procurement procedures and/ or generalising the use of the negotiated procedure with prior publication? 14. Should the negotiated procedure be allowed for all types of contracts and contracting authorities, or only under certain conditions? 15. Would a generalised use of the negotiated procedure engender certain risks of abuse or discrimination? If so, what kind of safeguards should be in place? Selection and award In order to streamline the selection and award procedure, the Green Paper suggests revising the organisation and sequence of the examination of selection and award criteria within the procedural framework. 16. Would you support a more flexible approach to the A potential solution is a lighter procedural framework for the award of contracts above the thresholds of the Directives organisation and sequence of the examination of selection and award criteria? Do you think it should be possible to examine the award criteria before the selection criteria? 17. In exceptional cases, would it be justified to allow contracting authorities to take into account criteria pertaining to the tenderer themselves (for example, experience and qualifications) in the award phase? What safeguards should be in place to guarantee fairness? 18. Should contracting authorities be allowed to take previous experience with bidders into account when awarding contracts? Specific instruments for small contracting authorities Small contracting authorities claim that applying the necessary procedural rules for the award of relatively small contracts requires a disproportionate amount of time and effort. They also claim that for small contracts below the thresholds of the Directives, there is legal uncertainty regarding the necessity to comply, or not, with certain requirements of the EU Treaty (such as antidiscrimination, transparency and equality). The European Commission suggests a potential solution is 04

5 a lighter procedural framework for local and regional contracting authorities for the award of contracts above the thresholds of the Directives. This would allow small authorities more freedom in their procurement business and reduce administrative burden. Another possibility could be to allow greater use of the negotiated procedure with prior publication of a contract notice. 19. Would you be in favour of a simplified procurement regime for relatively small contract awards by local and regional authorities? What should the characteristics of a simplified regime be? Many of the contracts awarded by small local and regional contracting authorities have values below the thresholds of the Directives. However, the award of such contracts must still respect the basic principles of EU law, such as non-discrimination and transparency, if they present a cross-border interest. Contracting authorities have expressed a need for clarification in this area, particularly when it comes to determining whether there is a cross-border interest or not. 20. Is there a need for additional guidance on the indications of a possible cross-border interest? Public-public cooperation This section explores the extent to which public procurement rules should apply to contracts concluded between public authorities. Although the application of An overriding principle is to increase the efficiency of public spending in order to encourage economic growth EU public procurement rules is not appropriate for many forms of cooperation between public authorities, the principle of fair and open competition prevents such contracts from automatically being excluded from the provisions of the Directives. Furthermore, ECJ rulings since the public procurement rules were introduced have resulted in a complex landscape of possible exceptions for public-public cooperation, and as a result contracting authorities are not always clear whether they need to abide by the public procurement rules or not. 21. Would it be useful to establish legislative rules at EU level regarding the scope and criteria for public-public cooperation? 22. Should a concept with certain common criteria for exempted forms of publicpublic cooperation from public procurement rules be developed? What would this look like? 23. Should EU rules also cover cases where competences for a particular public task are transferred from one authority to another? Addressing concerns relating to contract execution The current EU public procurement rules do not govern the way contracts are carried out. The Green Paper raises the issue of whether a revision of the rules should incorporate provisions to address problems which arise during the contract execution phase. It invites views on how formal and how detailed these rules should be. 24. Should certain aspects of the contract execution be regulated at EU level? If so, which? Or should this be left to member states? For example: a. Should the EU public procurement Directives contain rules regarding substantial modifications to a contract while the contract is still in force? If so, what could such rules include or help to clarify? b. Would the application of a more flexible procedure be justified in cases where a new competitive tender procedure has to take place? c. Should there be EU-level rules obliging or allowing contracting authorities to change the supplier or terminate the contract in certain circumstances? If so, in which circumstances, and should the EU dictate specific procedures on how the new supplier must be chosen? d. Should EU countries be required to provide in their national law for a right to cancel contracts that have been awarded in breach of public procurement law? 25. Should contracting authorities have more power to exert influence over sub-contracting by the successful tenderer? 05

6 It may be useful to apply weighting criteria that relate to the environment, energy efficiency, accessibility or innovation Ensuring fair and effective competition An overriding principle behind the revision of the public procurement rules is to increase the efficiency of public spending in order to encourage economic growth. Fair and effective competition is crucial to this objective, and consequently the European Commission intends to use the revision as an opportunity to encourage contracting authorities knowledge of market structures and to facilitate competition within procurement procedures. 26. Should stronger safeguards against anti-competitive behaviours be introduced into EU procurement rules? If so, what should these be? 27. Should EU public procurement rules provide instruments to encourage pro-competitive procurement strategies? If so, what? 28. Are specific instruments needed to encourage crossborder procurement? If so, what? 29. Should contracting authorities be obliged to draw up tender specifications for highvalue contracts in a second language, or to accept tenders in foreign languages? 30. What instruments could prevent the development of dominant suppliers? Achieving other policy objectives through public procurement Public procurement can make an important contribution to achieving key policy objectives such as: developing an economy based on knowledge and innovation; promoting a low carbon, resource-efficient and competitive economy; fostering a high-employment economy delivering social and territorial cohesion. The European Commission seeks views on how the revision of the public procurement rules could contribute to achieving these priorities. The Green Paper suggests two possible approaches: provide public authorities with the tools to take into account green, low carbon, innovative, socially responsible goods and services using procedural public procurement rules impose mandatory requirements on contracting authorities, or provide incentives to steer their decisions as to which goods and services should be procured. The questions below relate to the two possible approaches outlined above. Subject matter of the contract and technical specifications 31. Should it be possible to define technical specifications in terms of performance or functional requirement, rather than in terms of strict, detailed technical requirements? Should this be mandatory under certain conditions? 32. Should changes be made to the procedures provided under the current Directives to ensure consideration is given to other policy objectives? If so, what changes could be made? 33. Could there be situations where a restriction to local or regional suppliers could be justified by legitimate and objective reasons that are not based on purely economic reasons? Using the most appropriate award criteria The Green Paper suggests that it may be useful to apply weighting criteria that relate to the environment, energy efficiency, accessibility or innovation in the award phase of a contract. 34. Would you support proposals to: a. eliminate the criterion of the lowest price only? b. limit the use of the price criterion or the weight which contracting authorities can give to the price? c. introduce a third criterion in addition to the lowest price and economically most advantageous offer? If so, what? 35. Should the score attributed to environmental, social or innovative criteria be limited to a set maximum? 36. Should it be mandatory to take life-cycle costs into account when determining the most economically advantageous offer? Would it be necessary/appropriate for the Commission to develop a methodology for life-cycle costing? 06

7 Imposing proper contract performance clauses Views are sought on whether the rules should incorporate contract performance clauses which impose obligations on a tenderer to achieve specific policy objectives. For example: 37. Should contract performance clauses be used to impose certain obligations on a tenderer which relate to environmental and social objectives? 38. Should certain general contract performance clauses, in particular those relating to employment and labour conditions of the workers involved in the execution of the contract, be specified at EU level? 39. Should it be possible for the contracting authority to impose requirements which are not linked to the subject matter of the contract? This could make it possible, for instance, to require tenderers to have a gender-equal opportunity policy in place or to employ a quota of specific categories of people, for example, jobseekers or people with disabilities. 40. When defining technical specifications, should it be possible to introduce rules relating to the process and production methods of a product, such as when buying coffee requesting the supplier to pay the producer a premium to be invested in activities promoting socio-economic development? What to buy This section considers the introduction of mandatory requirements on contracting authorities on what to buy in order to contribute to other policy objectives. While this could be seen as an effective means of achieving certain policy goals, there are concerns that obligations on what to buy may restrict contracting authorities capacity to procure goods and services that best meet their needs, may increase administrative burden, and may restrict competition in procurement markets. 41. Do you support national and/or EU-level obligations on what to buy? Should they be imposed in public procurement legislation or enshrined in policy-specific (environmental, social, energy) legislation instead? 42. If you support obligations on what to buy, should they set a minimum level, only to allow contracting authorities room to set more ambitious requirements if desired? 43. What impact do you think what to buy obligations could have on competition in procurement markets and administrative burden? 44. What alternative instruments to what to buy would be appropriate? Innovation Current EU procurement rules already aim to promote innovation through a flexible approach which allows contracting authorities to take up innovation-orientated tendering. However, concerns have been raised regarding There are concerns that obligations on what to buy may increase administrative burden and restrict competition the protection of intellectual property rights, as tenderers may be required to disclose unique features of an innovative solution, which may then become known to other candidates. The European Commission aims to offer sufficient protection of intellectual property rights in the revised public procurement rules. In addition, it intends to use the revision to address ways of optimising pre-commercial procurement opportunities. 45. Do current procedures sufficiently protect intellectual property rights and ensure that tenderers are not deprived of the benefits from their ideas? 46. Is the current approach to pre-commercial procurement suited to stimulating innovation? In what other ways could contracting authorities request the development of products or services not yet on the market? How could contracting authorities encourage SMEs to participate in pre-commercial procurement? Other issues 47. Are there any other issues which should be addressed in a future reform of the EU public procurement Directives? 07

8 Help shape our response on your behalf The NHS European Office relies on your expertise to let the European Commission know how a revision of the existing public procurement rules could impact on the NHS. This is your chance to influence the future content of revised EU legislation in the field of public procurement. The full European Commission consultation paper can be found at: How you can input The NHS European Office would welcome responses by Monday 4 April Please send your comments to jenny-lee.spencer@nhsconfed.org The NHS European Office The NHS European Office has been established to represent NHS organisations in England to EU decision-makers. The office is funded by the strategic health authorities and is part of the NHS Confederation. EU policy and legislation have an increasing impact on the NHS as a provider and commissioner of healthcare, as a business and as a major employer in the EU. Our work includes: monitoring EU developments which have an impact on the NHS informing NHS organisations of EU affairs promoting the priorities and interests of the NHS to European institutions advising NHS organisations of EU funding opportunities. To find out more about us, and how you can engage in our work to represent the NHS in Europe, visit or contact european.office@nhsconfed.org This publication was produced by NHS Confederation Events & Publishing. Engage more effectively with your audience, tel Further copies or alternative formats can be requested from: Tel publications@nhsconfed.org or visit The NHS European Office You may copy or distribute this work, but you must give the author credit, you may not use it for commercial purposes, and you may not alter, transform or build upon this work. Rue Marie Thérèse, 21 B-1000 Brussels Tel 0032 (0) Fax 0032 (0) european.office@nhsconfed.org Registered Charity no: Stock code: EUR01201