the Experience of Consip, the National CPB
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1 1 Central Purc chasing in Italy: the Experience of Consip, the National CPB Conference on A New Framework for Public Procurement Angela Russo, International Cooperation Projects, Consip SpA Madrid, 9 April 2018
2 2 Agenda 1. A Snapshot on the Italian Public Procurement Scenario 2. Focus on Consip, the National CPB 3. Centralization: the EU Perspective and the Italian Application 4. Centralization and Use of eprocurement Tools: the Changing Role of a CPB 5. Centralized versus Decentralized Public Procurement: the Most Recent Developments in the Italian Landscape
3 3 The Italian Public Administration in a Snapshot: a Complex Scenario 91 Bln G&S spending ca 60 Mln Population 3.5 Mln PA employees 13 Ministries 32 CPB s: 1 National 20 Regional 11 Sub Regional Contracting Authorities 20 Regions Public Spending Optimization through EPROCUREMENT 110 Provinces 8101 Municipalities 94 Universities > Schools 300 Health Sector Suppliers (99% MSMEs) Contracts (90% <40k )
4 4 Agenda 1. A Snapshot on the Italian Public Procurement Scenario 2. Focus on Consip, the National CPB 3. Centralization: the EU Perspective and the Italian Application 4. Centralization and Use of eprocurement Tools: the Changing Role of a CPB 5. Centralized versus Decentralized Public Procurement: the Most Recent Developments in the Italian Landscape
5 5 Consip: Establishment, Mission and Role Establishment: Consip SpA is a public stock company set up in 1997 and entirely owned by the Italian Ministry of Economy and Finance (MEF), its sole shareholder Mission: make the use of public resources more efficient and transparent, by providing tools and skills, to public administrations, in order to allow them to perform public purchases and at the same time stimulate a competitive participation of enterprises to public tenders Role: Consip acts according to an in house model; it is a public company in house to all central state administrations and, consequently, it can act as central purchasing body for these administrations, as an essential part of its activities. The remaining part of its activities consists in providing specific services to other and specific public entities 426 Employees 44 Average age 87% Graduated 53% Women
6 6 Consip s Core Activities CENTRAL PROCUREMENT Implementation of the Program for the rationalization of public spending on G&S VERTICAL PRO OCUREMENT Support to individual administrations OTHER AREAS Respond to specific tasks assigned by law such as support the Digital Administration Aim PUBLIC FINANCE TOOL (impact on prices) EFFICIENCY AND INNOVATION TOOL (impact on processes)
7 7 Introduction to the Program for the Rationalization of public spending Launched with the 2000 Budget Law with the aim of optimizing public purchases of goods and services and developing procurement models based on new processes and technologies Based on demand aggregation and efficiency (different procedures such as: single supplier Framework Agreements (FAs), Framework Agreements, Electronic Marketplaces and Dynamic Purchasing Systems, entirely digital processes) SAVINGS EFFICIENCY TRANSPARENCY COMPETITION PROGRAM FOR THE RATIONALIZATION OF PUBLIC SPENDING
8 8 The Program for the Rationalization of public spending MEF plays a policymaking and coordinating role and defines the Program s guidelines Consip analyzes the demand and supply markets, develops purchasing procedures and provides purchasing know-how and consultancy services End-users: CAs and EOs benefit from the use of the tools provided and cooperate in the identification of quantity and quality requirements the Oversight Authorities (ANAC, AGCM, etc.) ensure, within their specific responsibilities, the compliance of purchasing initiatives with the principles of transparency and competition. CPBs Supplier s Institutional Representatives Oversight Authorities
9 9 Mandatory or Voluntary Regime vs Centralization 36,000 contracting authorities (ANAC 2014 Report) The mandatory use of purchasing tools* Single Supplier FAs Multi Sup pplier FAs MEPA DPS Central Administrations Mandatory Mandatory Mandatory Faculty Health Sector Mandatory Mandatory Mandatory Mandatory Region/Local Faculty Faculty Mandatory Faculty Schools Mandatory Faculty Mandatory Faculty Energy Vehicle Fuels ICT Heating Fuels and Gas Fix and mobile telephony Lunch coupons * NHS must make a first recourse to the regional CPB, if existing
10 10 Agenda 1. A Snapshot on the Italian Public Procurement Scenario 2. Focus on Consip, the National CPB 3. Centralization: the EU Perspective and the Italian Application 4. Centralization and Use of eprocurement Tools: the Changing Role of a CPB 5. Centralized versus Decentralized Public Procurement: the Most Recent Developments in the Italian Landscape
11 11 EU Dir. 2014/24 Centralization and Tools for Aggregated Purchasing Innovative Challenging! DIFFERENT TOOLS IMPLY DIFFERENT ROLES IMPLY DIFFERENT CAPACITIES FOR EVERYONE!!
12 12 EU Dir. 2014/24 Centralization and Aggregated Purchasing Directive 2014/24 Art. 37 Centralized purchasing and CPBs Member States may provide that contracting authorities may acquire supplies and/or services from a central purchasing body offering the centralized purchasing activity referred to in point (a) of point (14) of Article 2(1).. Wholesaler: buy, stock and sell Intermediary: awards FAs used by other CAs
13 EU Analysis on CPBs 2012 Considerations on CPB-DG Internal Market Impact Assessment document The cost-benefit analysis supports the inclusion in the Directives of a clear set of provisions regulating aggregation, generally via CPBs, emerging as key hubs in the European PP landscape. Procedures run through these structures should be visible to a wide range of market participants, traceable and less prone to conflicts of interest CPBs are more professional and aggregation may permit greater strategic buying power The reason to establish them is usually to provide smaller contracting authorities with the benefits of economies of scale CPBs would improve the professionalisation of procurement as they would have the specialised skills and expertise in running procurement transactions. CPBs are also better resourced to carry out procurement involving pursue of strategic objectives (e.g. complex or sophisticated tenders aggregation of demand could significantly diminish costs of procedures.. MS could consider a range of CPB models, adapted to their circumstances and needs, this may mean the creation of more than one CPB, to allow vertical procurement (e.g. medical and health related purchases) as well as horizontal (national, regional or local). The impact assessment concludes in favor of actions to strengthen administrative capacity by regulating CPBs, and to require MS to identify a national authority with responsibility for oversight of aggregate national purchasing and implementation of EU legislation 13
14 14 Italian Public Procurement Law Art. 37 Aggregation and centralizataionn Art. 38 Qualification of CAs Art. 39 Ancillary activities Law Art /2016 Use of electronic communications. Art. 55 Art. 54 DPS FAs Art. 56/7 E-auctions and ecatalogues
15 15 Public Procurement Law - Aggregation and Centralization Law 50/2016 Art. 37 Aggregation and Centralization CAs can manage autonomously procurement of goods and services below euro and public works below euro, or buy through one of the tools made available by central purchasing bodies and procurement aggregators. For purchases above those values CAs must either use the CPBs and procurement aggregators or undergo a qualification process (art.38).
16 16 Centralisation of Procurement in the New PP Law CPBs and Procurement Aggregators Updates By Law 66/2014 (spending review): institution of a list of max 35 procurement aggregators composed by (nowadays 32 aggregators): Consip Central Purchasing bodies at the regional level Selected buyers (i.e. metropolitan cities) DEFINITION OF THE LIST OF THE PROCUREMENT AGGREGATORS The Determination of ANAC s Board of the 22 nd of July 2015 defined the list of the procurement aggregators. The Deliberation of ANAC n. 784 of the 20 th of July 2016 revised the list DEFINITION OF THE CRITERIA AND ALLOCATION OF THE FUND FOR THE PROCUREMENT AGGREGATORS Decree of the 16 th of December 2015 and Resolution of the 26 th of February 2016 By Dec. 31st of each year the list of goods and services, above defined thresholds, to be purchased only by Consip or the procurement aggregators is defined by decree in order to allow governance over the whole procurement system
17 17 Procurement Aggregators List Max 35 Nowadays: 32 Public procurement aggregators (ANAC) 1 National CPB 2 21 Regional CPBs 8 Metropolitan cities 2 Cities
18 18 PP Code: Tools available to CAs: Purchasing Tools and Negotiation Tools Purchasing tools Tools that do not require a renegotiation during second stage 1) Single supplier FAs 2) Other FAs without renegotiation during mini tender 3) Direct order from the ecatalogues (MEPA) Tools that require to reopen the negotiation 1) FAs with renegotiationn during mini tender 2) DPS tools 3) Request for quotation from the ecatalogues (MEPA) 4) other.. Negotiation
19 19 Agenda 1. A Snapshot on the Italian Public Procurement Scenario 2. Focus on Consip, the National CPB 3. Centralization: the EU Perspective and the Italian Application 4. Centralization and Use of eprocurement Tools: the Changing Role of a CPB 5. Centralized versus Decentralized Public Procurement: the Most Recent Developments in the Italian Landscape
20 20 National eprocurement Platform: a Comprehensive Set of Purchasing Tools Eprocurement portal /2012 Single supplier FAs On line FAs ecatalogues -MEPA FAs and DPS Purchases within frame contracts Large volumes Demand aggregation Standardized goods Low price volatility Above/Below EU Threshold Direct order or RFQ Low cost goods Spot purchasing Highly fragmented offer ecatalogue Below EU threshold On-line tenders in a structured and managed environment (two-stage procedures) Standardised procedures for commonly used goods & services with customisation Above/Below EU
21 21 Centralization vs eprocurement Choosing the appropriate eprocurement tool Customised Dynamic Purchasing System MePA Buy side Framework Agreements Standard Single Supplier FAs Concentrated Standardized Supply side Fragmented Specialised The adoption of different tools is related to the market (buy and supply side) characteristics
22 22 Centralization vs eprocurement Evolution of Consip s role Mature stage Consip s role «Market Maker» Dynamic Purchasing System MePA Framework Agreements «Awarding Authority» Single Supplier FAs Greater autonomy for the buyer Greater participation of SMEs The adoption of new eprocurement tools calls for a strategic change in Consip s role and capacity
23 23 Centralization vs eprocurement matching tools, roles and services provided Consip Contracting Authority Consip Market Maker etenders MEPA DPS Single Sup FAs FAs E-Invoicing CR RM services CA Asp Tender Call for competition Direct Order Catalogue Direct order Request for quotation Call for competition
24 24 Agenda 1. A Snapshot on the Italian Public Procurement Scenario 2. Focus on Consip, the National CPB 3. Centralization: the EU Perspective and the Italian Application 4. Centralization and Use of eprocurement Tools: the Changing Role of a CPB 5. Centralized versus Decentralized Public Procurement: the Most Recent Developments in the Italian Landscape
25 25 Future Trends in Public Procurement In line with the current trend, procurement officials are expected to comply with increasingly complex rules and pursue value for money, while taking into account strategic considerations. More regulation Greater use of technology More complex procedures (Innovation, PcP, PPP) Less money/budget cuts Urgent need to Measure the Procurement Capacity Urgent need to achieve Better Performance + Skilled Buyers Prevent corruption
26 26 Capacity Increase: Centralization versus Decentralization CA 33 PROCUREMENT AGGREGATORS EO 350 SUPPLIER TRAINING DESKS
27 27 Capacity Increase - Qualification of CAs art. 38 of the new PP code Register of Qualified CAs: ANAC sets up the list of qualified CAs on the basis of basic and additional requirements: - Basic: organization, internal structure, skills of employees, training of employees, respect of terms of payment etc. - Additional: quality certifications, number of complaints, use of electronic means of communications, use of social and environmental criteria etc. Qualification is mandatory for purchases above Recourse to CPBs, procurement aggregators or joint procurement for non-qualified CAs. CAs qualification Register will be mandatory for tenders value over for works and over for goods and services 4 levels of qualification, depending on the value of the tender: higher value higher number of qualified internal employees needed Platform to monitor construction sites will be mandatory from 2019 TRAINING MODULES Cooperation Protocol among Dept for EU policies Agency cohesion territorial National school of PA Conference of the Regions
28 28 Centralization versus Decentralization 2000 Set up a central CPB Italian evolving landscape 2008 Set up regional CPBs (network) 2016 Creation of Procurement Aggregators 2017 Qualification of CAs TREND Centralize above the threshold, by aggregating skills Digitalize below the threshold: by use of ecatalogues and training USEFUL REPLICATION MODELS Regional CPBs & Aggregators Supplier Training Desks TRAINING TO TRAINERS
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