The following are the City of Wakefield Metropolitan District Council s responses to the consultation on the modernisation of EU public procurement

Transcription

1 The following are the City of Wakefield Metropolitan District Council s responses to the consultation on the modernisation of EU public procurement policy. Questions and responses: 1. Do you think that the scope of the Public Procurement Directives should be limited to purchasing activities? Should any such limitation simply codify the criterion of the immediate economic benefit developed by the Court or should it provide additional/alternative conditions and concepts? The Council would welcome the Public Procurement Directives being clarified to limit their applicability solely to procurement issues. In other words, where a contracting authority, its agent or a consortia is procuring goods services and works on behalf of the public sector. The provision of grants, funding agreements and non-procurement activity should be specifically excluded, for the reason that to include such areas of activity can seriously impair the authorities ability to undertake its democratic and social functions and adds a layer of unnecessary bureaucracy. 2. Do you consider the current structure of the material scope, with its division into works, supplies and services contracts, appropriate? If not, which alternative structure would you propose? The current differentiation is unnecessary in respect of process. The Council advocates a single set of rules with the only differentiating factor being the thresholds for contracts which are predominantly works. 3. Do you think that the definition of works contract should be reviewed and simplified? If so, would you propose to omit the reference to a specific list annexed to the Directive? What would be the elements of your proposed definition? The Council would wish to see all elements of a works or construction contract, including preliminary activities, consultancy and related services being included in the definition of works and subject to being aggregated for 4. Do you think that the distinction between A and B services should be reviewed? The Council would welcome a review of Part A and Part B services to determine if the defined service categories are still relevant and appropriate. The Treaty of Rome principles apply equally to Part A and Part B services other than in respect of Part A services which are subject to the full procedures of the Directive. The Council welcomes a review of Part A and Part B, but with a focus on further derogations in respect of those Part B services that are predominantly delivered by local or regional providers; for example, residential child care services and specialist local services of a social or educational nature. The Council is not aware of any such services

2 being bid for, or delivered by, non-uk organisations and the current procedures add bureaucracy and process costs for all parties which reduce the funds and resources directed at actually delivering the services. The Council therefore suggests that such categories of service be subject to lower levels of advertising and competition, with greater focus on negotiating standards and terms with a number of selected competent suppliers. 5. Do you believe that the Public Procurement Directives should apply to all services, possibly on the basis of a more flexible standard regime? If not please indicate which service(s) should continue to follow the regime currently in place for B-services, and the reasons why. Subject to the introduction of a more flexible regime, the Public Procurement Directives should apply to service contracts other than those with a clear localised nature including social care and education related contracts. 6. Would you advocate that the thresholds for the application of the EU Directives should be raised, despite the fact that this would entail at international level the consequences described above? The Council receives few if any expressions of interest from bidders based in other EU countries. Indeed, we have no record of any non-uk company bids in recent years. Other authorities report similar experiences. Thus the current thresholds introduce a level of bureaucracy and process that is onerous on bidders and has extremely limited value for non-british companies. The Council would wish to see a significant increase in threshold levels, whilst recognising that all public sector spend above de minimus levels (some guidance on de minimus levels would be useful) should be, and will be, subject to proportionate advertising, ideally via e-sourcing portals. As a consequence of the Remedies Directive in 2009, contracting authorities are now exposed to a significant amount of additional risk which, by maintaining the thresholds at current levels, is adding to the burden and bureaucracy on authorities. 18. Do you think that the current level of detail of the EU public procurement rules is appropriate? If not, are they too detailed or not detailed enough? The Council believes that the public procurement regulations are too detailed and prescriptive and do not provide the degree of flexibility required by a contracting body. For example, the current timescales are appropriate for many tenders, in that they allow bidders sufficient time to prepare responses. However, the Council would welcome an option for an authority to reduce timescales (by prior notice in the advertisement or contract notice) where appropriate for specific contracts. This would speed up procurement processes where the prescribed timescales are unnecessarily long.

3 19. Do you think that the procedures as set out in the current Directives allow contracting authorities to obtain the best possible procurement outcomes? If not: How should the procedures be improved in order to alleviate administrative burdens/reduce transaction costs and duration of the procedures, while at the same time guaranteeing that contracting authorities obtain best value for money? The Council views the Competitive Dialogue procedure to be a valuable additional procurement route for certain types of contract. CD enables structured negotiation with suppliers for particularly complex contracts. The Council s experience is that if there is proper planning and preparation, the Competitive Dialogue process works, and works well. However, it has been widely acknowledged that the CD process can be costly for both bidders and procurers. Accepting that the caveats in relation to the use of the Negotiated procedure were introduced to ensure the process is used appropriately, a review of the circumstances in which the negotiated procedure (with a call for competition) would be welcomed to provide contracting authorities with further options to reduce the burden on both procurers and bidders and to ensure value for money is achieved through the process. In addition, in the Council s experience, some procurements may not justify the use of the CD or Negotiated procedure, whilst at the same time the Restricted or Open procedures do not provide sufficient flexibility to ensure that the contracting body achieves the desired outcomes, including value for money. Therefore the Council would wish to see the option, in Restricted or Open procedures, for some discussion with bidders immediately prior to, and / or immediately following contract award, to ensure that the contract meets the initial requirements and is properly structured to deliver them. 21. Do you think that the procedures and tools provided by the Directive to address specific needs and to facilitate private participation in public investment through public-private partnerships (e.g. dynamic purchasing system, competitive dialogue, electronic auctions, design contests) should be maintained in their current form, modified (if so, how) or abolished? See comments above in relation to the Competitive Dialogue procedure above. 22. On the basis of your experience with the use of the accelerated procedure in 2009 and 2010, would you advocate a generalisation of this possibility of shortening the deadlines under certain circumstances? Would this be possible in your view without jeopardizing the quality of offers?

4 The Council would welcome the ongoing flexibility to use the accelerated procedure on the proviso that contracting bodies must ensure that the timescales to return bids are realistic as to not jeopardise the quality of offers received. 23. Would you be in favour of allowing more negotiation in public procurement procedures and/or generalizing the use of the negotiated procedure with prior publication? The council would be in favour of this and it will address the issues already raised in response to Question 19 above. 24. In the latter case, do you think that this possibility should be allowed for all types of contracts/all types of contracting authorities, or only under certain conditions? The provision to negotiate in a contract should be allowed under any procedure, for all types of contract and by all types of contracting authority. It is proposed that the contracting body includes the provision to negotiate at specified parts of the process in the OJEU notice and in the documentation issued to bidders. It should be the responsibility of the contracting body to ensure compliance with the principles of the Treaty and provide evidence as to fair and equal treatment where necessary. 25. Do you share the view that a generalised use of the negotiated procedure might entail certain risks of abuse/ discrimination? In addition to the safeguards already provided for in the Directives for the negotiated procedure, would additional safeguards for transparency and non-discrimination be necessary in order to compensate for the higher level of discretion? If so, what could such additional safeguards be? It is the Council s view that generalised use of the negotiated procedure won t increase the risk of abuse or discrimination due to a number of requirements which have arisen in recent years from case law and also the Remedies Directive; transparency of evaluation criteria and methodology, detail provided to all bidders at award stage of the process, will reduce risk of discriminatory activity. In addition, if certain safeguards are enforced in the process for example; including the provision to negotiate in the OJEU entry and tender documentation, ensuring that any negotiation is limited strictly to the original published criteria and sub-criteria; it will reduce the scope for inappropriate use. 27. Would you be in favour of a more flexible approach to the organisation and sequence of the examination of selection and award criteria as part of the procurement procedure? If so, do you think that it should be possible to examine the award criteria before the selection criteria?

5 The Council is satisfied with the current approach of distinct selection and award stages and has not undertaken projects to date where it would have been advantageous to examine award criteria before the selection criteria. However, the flexibility to consider experience specific to a bidder s submission would be advantageous, for example; where the experience of a team of people is critical to the delivery of the contract. 28. Do you consider that it could be justified in exceptional cases to allow contracting authorities to take into account criteria pertaining to the tenderer himself in the award phase? If so, in which cases, and which additional safeguards would in your view be needed to guarantee the fairness and objectivity of the award decision in such a system? As specified above, the flexibility to take into account the experience of the delivery team at the award stage would be advantageous. 29. Do you think the Directive should explicitly allow previous experience with one or several bidders to be taken into account? If yes, what safeguards would be needed to prevent discriminatory practices? It is the Council s view that bidder supplied reference sites can sometimes provide an incorrect reflection of the bidders past performance as referees are only provided for previous work which has been successful. Contracting authorities should therefore have the flexibility to take into consideration their own previous experience of a bidder subject to: it being in the past three year period; it should be based on documented evidence of past performance on a contract of similar scope and scale; the contracting authority must ensure that subjective views are not the basis for this decision. In addition, the contracting authority should be given the flexibly to obtain references from other organisations for which they know the bidder has undertaken contracts of a similar value and scope but may not be in the list offered by the bidder. 31. Do you think that the full public procurement regime is appropriate or by contrast unsuitable for the needs of smaller contracting authorities? Please explain your answer. 32. If so, would you be in favour of a simplified procurement regime for relatively small contract awards by local and regional authorities? What should be the characteristics of such a simplified regime in your view? The council suggests that there should be explicit flexibility in the use of framework contracts allowing that for low value procurements (i.e. under 10% of the relevant EU thresholds) a contracting authority can procure

6 direct without the need for a mini-competition. See also response to question Do you think that the case-law of the Court of Justice as explained in the Commission Interpretative Communication provides sufficient legal certainty for the award of contracts below the thresholds of the Directives? Or would you consider that additional guidance, for instance on the indications of a possible cross-border interest, or any other EU initiative, might be needed? On which points would you deem this relevant or necessary? Further guidance in respect of possible cross border interest and also in respect of expectations for de minimus requirements would be useful. 34. In the light of the above, do you consider it useful to establish legislative rules at EU level regarding the scope and criteria for publicpublic cooperation? The Council considers that it would be useful to specify in the legislation the criteria for the use of an exemption to the EU directives when dealing with public-public arrangements. This clarity is particularly pertinent to the current climate whereby contracting authorities are developing innovative approaches to service delivery, including shared services or transfer of functions to other public sector organisations. 35. Would you agree that a concept with certain common criteria for exempted forms of public-public cooperation should be developed? What would in your view be the important elements of such a concept? Yes, common criteria would provide clarity. The Council believes that the criteria as determined by the Teckal judgment restricts the ability of the public sector to develop innovative solutions to deliver value for money. Provided the public-public body undertakes a competitive process to secure any private sector equity or support, this should not prohibit contracting authorities that are members of the public-public body directly commissioning or awarding work to the public-public body. 38. In general, are you in favour of a stronger aggregation of demand/more joint procurement? What are the benefits and/or drawbacks in your view? The council does not believe that a stronger directive to aggregate demand is required nor is it necessarily the right action to take. Stronger aggregation of demand must be based on a number of variables to ensure the aggregation doesn t have negative impact on markets and the economy. Joint procurement suits some markets more than others; the decision to aggregate demand with other organisations has to take a number of factors

7 into consideration. Market conditions must be the primary consideration as collaboration may disadvantage small companies that do not have capacity to bid for or deliver a large contract. Some national markets are ideal for collaborative arrangements which provide the public sector with greater leverage and therefore economies of scale however, the public sector must be cautious that their actions to collaborate do not create monopolies in the market. 40. Do you think that a stronger aggregation of demand/ joint procurement might involve certain risks in terms of restricting competition and hampering access to public contracts by SMEs? If so, how could possible risks be mitigated? Yes see the response to question 38 above. 41. Do you think that joint public procurement would suit some specific product areas more than others? If yes, please specify some of these areas and the reasons. Yes as per the response to question 38 above. 43. Should the public procurement Directives regulate the issue of substantial modifications of a contract while it is still in force? If so, what elements of clarification would you propose? The Council believes that there must be scope during the life of a contract to allow for modification. The public sector environment is undergoing more and more change, and to have to undertake a new procurement to address modifications required by changes in service delivery, legislation and wider environmental factors adds bureaucracy, time and cost, and disadvantages a supplier that won the contract in fair competition. 44. Where a new competitive procedure has to be organised following an amendment of one or more essential conditions would the application of a more flexible procedure be justified? What procedure might this be? Flexibility in these circumstances would be welcome to ensure that the contracting authority can undertake a procedure as swiftly as possible to minimise the time and resources required of both bidders and the contracting authority. 46. Do you agree that the EU public procurement Directives should require Member States to provide in their national law for a right to cancel contracts that have been awarded in breach of public procurement law? The issue for public bodies in litigation is that there may well be a delay in hearing a case before the courts, and litigation is expensive. The public body and indeed the contractor need to have some certainty that a contract has been awarded and the suggestion of a right to have a contract

8 cancelled will bring uncertainty and leave many public bodies open to (unnecessary) challenge, at considerable public expense. Question: 47. Do you think that certain aspects of the contract execution and which aspects - should be regulated at EU level? Please explain. Subcontracting The existing legislation contains only very limited rules on subcontracting. Article 25 of Directive 2004/18/EC provides that contracting authorities may oblige the tenderer to give indications on envisaged subcontracting. However, under ECJ case-law, a tenderer is in principle entitled to have recourse to subcontractors for the performance of the contract, even if this means that a large part of the contract or the entire contract is performed by subcontractors. Subcontracting of essential parts of the contract may only be restricted or prohibited in cases where the contracting authority was not in a position to verify the technical and economic capacities of the subcontractors. Some stakeholders are calling for stronger restrictions on subcontracting in order to allow contracting authorities to exert more influence on the performance of the contract. They are advocating, for instance, the possibility to exclude subcontracting completely or at least for essential parts of the contract, or to restrict it to a certain share percentage of the contract or provide for a general right for the contracting authority to reject proposed subcontractors. Question: 48. Do you think that contracting authorities should have more possibilities to exert influence on subcontracting by the successful tenderer? If yes, which instruments would you propose? A MORE ACCESSIBLE EUROPEAN PROCUREMENT MARKET One of the foremost objectives of EU public procurement legislation is to enable economic operators to compete effectively for public contracts in other Member States. Considerable success has been achieved in this regard since the introduction of the first public procurement Directives in the 1970s. Nevertheless, there still seems to be some room for improvement to create a true European procurement market that is fully accessible to all European undertakings. This concerns, in particular, better access for SMEs and more competitive procurement markets generally. Question: 49. Do you think that the current Directives allow economic operators to avail themselves fully of procurement opportunities within the

9 Internal Market? If not: Which provisions do you consider are not properly adapted to the needs of economic operators and why? Better access for SMEs and Start-ups The purpose of the Public Procurement Directives is to open up the public procurement market for all economic operators, regardless of their size. However, special attention needs to be paid to the issue of access to those markets by small and medium-sized enterprises (SMEs)[63]. Questions: 50. Do you think that the EU public procurement rules and policy are already sufficiently SME-friendly? Or, alternatively, do you think that certain rules of the Directive should be reviewed or additional measures be introduced to foster SME participation in public procurement? Please explain your choice. A determination of a de minimus level above which proportionate adverting or competition should be undertaken will enable contracting authorities to award low value contracts to small companies. The council suggests that the de minimus should be 10% of the EU thresholds below which the Treaty of Rome principles (including geographical or location issues). 51. Would you be of the opinion that some of the measures set out in the Code of Best Practices should be made compulsory for contracting authorities, such as subdivision into lots (subject to certain caveats)? The packaging of contracts should be left to the discretion of contracting authorities in order that the nature of the contract, contract value, the market, and risk are properly considered. 57. Do you agree that public procurement can have an important impact on market structures and that procurers should, where possible, seek to adjust their procurement strategies in order to combat anti-competitive market structures? Yes 60. Do you think the mutual recognition of certificates needs to be improved? Would you be in favour of creating a Europe-wide prequalification system? The council does not believe that this is necessary since bids from other EU countries are rare. 63. Do you think that stronger safeguards against anti-competitive behaviours in tender procedures should be introduced into EU public procurement rules? If so, which new instruments/provisions would you suggest?

10 Not necessarily public procurers need to be aware of the risks involved and of how to spot them in the process. An additional process for procurers will increase the bureaucracy involved and restricting bidders in respect of sub-contractors may result in the contracting authority not achieving optimum value for money. 64. In your view, can the attribution of exclusive rights jeopardise fair competition in procurement markets? No: under certain circumstances, negotiating an extension on the basis of exclusive rights is necessary. This does not jeopardise competition in procurement markets as long as the contract, which was originally awarded that granted the exclusive rights in the first place, was procured following a fully compliant competitive process. 65. If so, what instruments would you suggest in order to mitigate such risks / ensure fair competition? Do you think that the EU procurement rules should allow the award of contracts without procurement procedure on the basis of exclusive rights only on the condition that the exclusive right in question has itself been awarded in a transparent, competitive procedure? The council fully agrees that the award of contracts on the basis of exclusive rights should only be permissible if the contract which awarded the exclusive rights was subject to a competitive process. 66. Do you consider that the rules on technical specifications make sufficient allowance for the introduction of considerations related to other policy objectives? In the Council s experience, the current rules on technical specifications already allows contracting authorities the flexibility to build social, economic and environmental requirements into the specification for a contract as long as it relates to the subject matter of the contract and that it is nondiscriminatory. However, there needs to be greater flexibility in linking specifications and outcomes to the contracting authority s corporate priorities (an example being a local authority s explicit policy commitment to local economic regeneration or job creation). 67. Do you share the view that the possibility of defining technical specifications in terms of performance or functional requirements might enable contracting authorities to achieve their policy needs better than defining them in terms of strict detailed technical requirements? If so, would you advocate making performance or functional requirements mandatory under certain conditions? No a contracting authority must have discretion to tailor a procurement process to its requirements. Increasing mandatory requirements will undermine this.

11 73. What would you suggest as useful examples of technical competence or other selection criteria aimed at fostering the achievement of objectives such as protection of environment, promotion of social inclusion, improving accessibility for disabled people and enhancing innovation? Previous experience of delivering sustainable outcomes in terms of social, economic and social benefits. 74. The criterion of the most economically advantageous tender seems to be best suited for pursuing other policy objectives. Do you think that, in order to take best account of such policy objectives, it would be useful to change the existing rules (for certain types of contracts/ some specific sectors/ in certain circumstances): 75. to eliminate the criterion of the lowest price only; Yes it is the council s policy to use qualitative criteria in the evaluation of every tender process. It is difficult to think of any contract where there would not be some qualitative criteria. 76. to limit the use of the price criterion or the weight which contracting authorities can give to the price; No this should remain at the contracting authority s discretion. 78. Do you think that in any event the score attributed to environmental, social or innovative criteria, for example, should be limited to a set maximum, so that the criterion does not become more important than the performance or cost criteria? No for some procurements, sustainability will be a core deliverable of the contract and therefore to limit the score which can be attributed to it may result in the contracting authority not achieving optimum outcomes. 79. Do you think that the possibility of including environmental or social criteria in the award phase is understood and used? Should it in your view be better spelt out in the Directive? It is used but not understood fully by many authorities. It does need clarification in the Directive. 80. In your view, should it be mandatory to take life-cycle costs into account when determining the economically most advantageous offer, especially in the case of big projects? In this case, would you consider it necessary/appropriate for the Commission services to develop a methodology for life-cycle costing? This can be an extremely complex area on which clarity from the commission would be useful. In order to evaluate true whole life costing, a whole range of factors should be taken into consideration and it is not clear from the current regulations that evaluating a bid on whole life costs are

12 permissible in more complex situations. For example; taking into consideration the cost of reduced benefits payments if a bid specifically states that the service provider will employ a person formerly on the register of long term unemployed; factoring in the cost reduction associated with a bidder employing people with mental health difficulties etc. This will bring benefits to other public sector bodies, not just the contracting body as the recruitment of former long term unemployed / someone with mental health difficulties, brings benefits to the wider public sector. In other words, there are wider financial implications for a contracting authority that may not be eligible for consideration based on the current Directive. A mechanism for taking such benefits into account in the evaluation process would be welcomed. However, the Council does not wish to see increased mandatory requirements. 81. Contract performance clauses are the most appropriate stage of the procedure at which to include social considerations relating to the employment and labour conditions of the workers involved in the execution of the contract. Do you agree? If not, please suggest what might be the best alternative solution. The council agrees with the above. 82. What kind of contract performance clauses would be particularly appropriate in your view in terms of taking social, environmental and energy efficiency considerations into account? Employment and skills provisions in respect of contracts requiring local service provision this covers the whole spectrum of social employment issues such as long term unemployed, young people Not in Education Employment or Training (NEET), apprenticeships etc. Reduction in low value deliveries. 86. Some stakeholders suggest softening or even dropping the condition that requirements imposed by the contracting authority must be linked to the subject matter of the contract (this could make it possible to require, for instance, that tenderers have a gender-equal employment policy in place or employ a certain quota of specific categories of people, such as jobseekers, persons with disabilities, etc.). Do you agree with this suggestion? In your view, what could be the advantages or disadvantages of loosening or dropping the link with the subject matter? Yes, the council agrees with this suggestion. It will give contracting authorities more flexibility when procuring, as long as the requirements are proportionate and non-discriminatory. 87. If the link with the subject matter is to be loosened, which corrective mechanisms, if any, should be put in place in order to

13 mitigate the risks of creating discrimination and of considerably restricting competition? The contacting body should be aware of market conditions prior to undertaking a process to ensure that they are not stipulating something that will restrict competition. 88. Do you believe that SMEs might have problems complying with the various requirements? If so, how should this issue be dealt with in your view? As above 89. If you believe that the link with the subject matter should be loosened or eliminated, at which of the successive stages of the procurement process should this occur? Flexibility should be given to contracting authorities to use requirements not relating to the subject matter of the contract at each stage of the process Do you consider that the specific features of social services should be taken more fully into account in EU public procurement legislation? If so, how should this be done? Social care is invariably delivered locally, and contracting authorities should be allowed greater flexibility in respect of how such services are commissioned. Some activity is simply not feasible within the Directive and case law; for example, if a child needs to be taken into care the annual cost of a specialist placement may be over 100,000 per year. If an existing contracted provider has no place, then the child needs a placement the same day a competitive process is not possible. Therefore it is appropriate that general social care and related provision is commissioned through a compliant process, but the Directive needs amending to provide far greater flexibility in delivery social care, health care and related services Should the Directives allow the possibility of reserving contracts involving social services to non-profit organisations / should there be other privileges for such organisations in the context of the award of social services contracts? The current provisions to reserve contracts for supported businesses should be extended to other groups and organisations such as third sector organisations which re-invest their profits for social benefit. The Directives should recognise that lowest price does not always provide the highest quality of care which social care clients need. A third criterion would be useful in the field of social care Loosening the award criteria or reserving contracts to certain types of organisations could prejudice the ability of procurement procedures to ensure acquisition of such services "at least cost to the

14 community" and thus carry the risk of the resulting contracts involving State aid. Do you share these concerns? The contracting authority would need to assess this risk prior to reserving a contract - if it was deemed to be high risk that the authority would not obtain value for money or that state aid may be an issue as a result of reserving a contract, an alternative procurement process should be undertaken Do you think that Article 45 of Directive 2004/18/EC concerning the exclusion of bidders is a useful instrument to sanction unsound business behaviours? What improvements to this mechanism and/or alternative mechanisms would you propose? This is a complex area and creates risk for a contracting authority. In many instances the authority may not be aware of a relevant activity, crime or illegal activity; PQQ questions can assist, but the activity may have been undertaken by an affiliated or parent company in another country. The Council has no proposal on how to address this, but wishes to note the problematic nature of Article Should there be specific rules at EU level to address the issue of advantages of certain tenderers because of their prior association with the design of the project subject of the call for tenders? Which safeguards would you propose? Contracting bodies need the flexibility to be able to engage the market to ensure they fully understand market conditions to enable them to achieve value for money in future procurements. This flexibility should not be limited and there needs to be caveats; contracting authorities should make sure they engage a range of providers, that they don t write a specification based on any of the providers unique solutions and that any relevant information made available to a supplier as part of pre-tender discussions is released to all bidders as part of the process Do you think that the problem of possible advantages of incumbent bidders needs to be addressed at EU level and, if so, how? Clarity around the cost of change when evaluating bids which include an incumbent would be valuable. For example, changing suppliers may incur significant costs in respect of issues such as the change of systems, training, redesign of processes, data migration costs, etc. clarity is required in respect of how a contracting authority takes this into consideration when evaluating whole life costs.