Ministry of Economy, Finance and Industry: regulatory and supervising authority. Other Ministries. Decentralised /independent procurements

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1 6. Country: France Major organisation of procurement at the national level Ministry of Economy, Finance and Industry: regulatory and supervising authority Central Government: decentralised procedures with independent procuring agencies per ministry bound to follow the Public Procurement Code Regional/Local Authorities decentralised procedures and rules Ministry of Defense Ministry of Transport, Equipment, Tourism and Sea Other Ministries Procurement of military and space equipment Procurement of equipment Decentralised /independent procurements Public procurement in France is organized under the supervision of the Ministry of the Economy, Finance and Industry. The selection of suppliers, however, remains the responsibility of individual public organisations provided that they comply with the new national Public Procurement Code, which defines in detail the procurement procedures in accordance with the national and European law. The purpose of the code currently in force is to simplify procedures by merging the rules applicable to the State with those applicable to the local and regional authorities, but it is binding only for central government agencies and supervised agencies. The organizational option for management is to place the responsibility for awarding and monitoring a contract at the level nearest to the need that this contract sets out to satisfy, e.g. central or local administrations, independent administrative authorities, public establishments, local or regional authorities, public enterprises and enterprises with special or exclusive rights. Another option is the one applied by certain public industrial and commercial establishments that have chosen to statutorily follow the Public Procurement Code principles and rules. The Public Procurement Code provides for the possibility of forming purchasing groups to allow economies of scale and the pooling of procurement procedures, especially for small buyers whose procurement activities constitute only a minor part 1

2 of their activity and hence they do not have the suitable human and material resources to develop a truly professional purchasing function. Major responsible institution(s) for procurement on the national level and their function: 1. Ministry of Economy, Finance and Industry (MINEFI) [ The MINEFI is responsible for the establishment of the framework conditions governing the public procurement system. The MINEFI executes also its own procurement programme that reaches 1.9 billion Euros per annum covering 5 main domains: real estate, IT, Postal expenditure, provision of services, general supply. 2. Ministry of Transports, Equipment, Tourism and the Sea [ The Ministry is responsible for the implementation of public works projects and procurements in the areas of transports, equipment, tourism and maritime systems, which has a special division on R&D but does not systematically apply innovative procurement 3. Ministry of Defence [ The Ministry of Defence accounts for the greatest amount of public procurement budget, including technology and innovation intensive equipments and goods. It is the only ministry that makes extensive use of innovation related criteria in its procurements and systematically invests on research. Procurement takes place though the General Delegation of Armaments (Délégation Générale pour l Armement, DGA) that manages an annual budget of about 10 billion Euros for the purchasing of military equipment. DGA has established a portal, the IXARM [ in order to better inform interested parties on the main developments in the national and international defence sector. IXARM offers a list of targeted announcements and links to the Ministry s electronic market place [ 4. Local authorities Local authorities follow independent procuring codes. Their role is significant in the total public procuring activity, since they award the two thirds of the public purchasing contracts. 2

3 Major documents: are there guidelines, toolkits etc. that have an impact on the role of innovation in procurement? (please provide http-link if possible) The key legal documents for the French Public Procurement system are the following: Decree No of the January 7, 2004 (Décret n / ) Circular of the January 7th, 2004 Guidelines for the application of the Code (Circulaire du 7 janvier 2004 portant manuel d application du code des marchés publics) Circular of the December 16th, 2004 Modification of the Communication of the January 7th, 2004 (Circulaire du 16 décembre 2004 modifiant la circulaire du 7 janvier 2004 portant manuel d application du code des marchés publics) This circulation only binds the State purchasing entities and their associated public establishments. All the public procurement regulation, specific guidelines, schemes, forms and FAQ are available on the website L espace des marches publics : [in French] Does innovation play a role somehow in the documents? The New Public Procurement Code explicitly refers to innovation in the organisation of the procurement systems in the country and the introduction of electronic applications in all levels of the procurement processes. The Ministry of Defence makes extensive use of innovative procurement. The implementation manual (see above) explains that purchasers have to make the balance in the award criteria between innovation and cost because a new product can be expensive at the first sight but finally be cheaper if its durability is taken into account. Thus the new code allows some degrees of freedom on the criteria imposed for the selection of the most economic advantageous tender (MEAT) and offers the possibility to authorize tenderers to submit variants (i.e. alternative technology or product for the same use). The extent and whether these provisions are applied depends remains at the discretion of the procuring agency. Any principles of procurement as they relate to innovation? Only the Ministry of Defence has explicitly incorporated innovation favouring criteria in its procurement system. In 2004 the Ministry decided to promote the participation of innovative SMEs, provided they can prove they are in the eve of an innovative technology. In this context innovating SMEs can directly conclude an R&D contract with the Ministry of Defence without having to face the usual procedures and rules even if it is at the expense of competition. 3

4 Two organisations are involved recently in an effort to monitor, analyze and facilitate access of SMEs to public procurement: APASP (Association pour l achat dans les services publics) represents 2000 procurers and suppliers. The association is active on the information and training of all actors involved in Public Procurement. A main target is the exchange of direct information among potential stakeholders by seminars and workshop but also via its website, where there is a module Needs and offers ( which allows procurers to publish their needs and to suppliers (in particular SMEs and micro enterprises) who in that case get early information. They can react directly to procurers and propose best offers for offers lower than Euro (VAT excluded). This is a less formalized market and does not need bureaucracy. Experience shows that the responses are many and pertinent and offer new solutions and ideas adapted to the needs. The Public Procurement Observatory is an organization recently established by the Ministry of Economy and Finance to collect and analyze data and establish a dialogue, which may end up in more innovation promotion. However, this is very recent and its activities cannot be evaluated yet. Any recent structural changes? The French government recently proceeded with the reform of the Public Procurement Code, which entered into force in January 10th, The aims of the reform are summarised as follows: 1. Raising the thresholds, 2. Requesting publicity as a proof for transparency and guarantee for real competition, 3. Incorporating the European Legislation on Public Procurement into the national provisions, 4. Simplifying the evaluation rules, 5. Giving priority to dialogue and negotiation in order to better match the offer to the demand, 6. Research of the most beneficial offer as guarantee for efficacy, 7. Research of mutualisation of needs and centralization of purchases, 8. Simplification in favour of enterprises. The new code was further amended in the 26 th November 2004, through the implementation manual of the 16 th December Source: [in France] 4

5 Any reactions to the EU directive (does it make a difference)? All of the Community Directives on public procurement enacted up to 2004 are now incorporated into French law. The scope of the Community Directives is broader than the scope of the French Public Procurement Code. Hence, on incorporation, France not only amended the Public Procurement Code (which is regulatory), but also had to make provisions (legislative) to cover the entities referred to in the Community Directives that are not within the framework of the Code. The Code is expected to be further amended soon, in order to incorporate the provisions of the new Directives on public procurement 2004/18 and 2004/17. According to the representative of the public procurement regulation department of the French Ministry of Finance this change will promote innovative procurement mainly because of the fact that the technical specifications can be formulated in terms of performance or functional requirements, rather than by reference to international, European or national standards and the introduction of the competitive dialogue procedure. Further comments SMEs are also organized in a group (Richelieu Committee) lobbying for the introduction of the US SBIR model and philosophy in the French Public Procurement System. The French innovation policy is famous for adopting a mission-oriented R&D policy, which strongly facilitates technology procurement. Big mission-oriented public organisations, such as the Commissariat a l Energie Atomique, include special provisions on innovation in their procurement codes. 5