Will proposed changes to public procurement regulations at EU level, make it easier, or more difficult to win public sector contracts? Well, the answer is it could do both. In this article we review the various changes to public procurement that are presently being considered. We identify 5 ways in which future changes to EU rules could help you win more public contracts.

1. A Review Of The EU Procurement Green Paper:
How Will Proposed EU Public Procurement
Changes Affect You?
Will proposed changes to public procurement regulations at EU level, make it
easier, or more difficult to win public sector contracts? Well, the answer is it
could do both.
In this article we review the various changes to public procurement that are presently
being considered. We identify 5 ways in which future changes to EU rules could help you
win more public contracts. But, don't get too excited, it's not all good news.
We have also pulled together a list of the 5 ways in which proposed changes could make
selling to the public sector more difficult.
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2. What's Next For Public Procurement?
Before examining the impact of proposed changes, let's set the context.
There is much discussion at present regarding the future of public procurement within the
European Union. It is motivated by two factors:
• The drive to maximize the effectiveness and the efficiency of public procurement –
resulting in better procurement outcomes at a lower cost
• The drive to maximize European
Having A Go At EU Procure-o-crats!
competitiveness and innovation – something
The Green Paper served as the basis for a
that procurement rules can have a major
process of consultation whereby interested
bearing on.
parties were invited to respond to specific
questions raised by the Commission.
Early in 2011 the EU Commission published a
green paper on the modernisation of EU
The irony of a process of simplifying EU
public procurement regulations.
procurement starting with what was
effectively a questionnaire of 120 questions –
Titled 'Towards a more efficient European
was not lost on many!
Procurement Market' the document began a
process of discussion on proposed changes
However it is all too easy to 'have a go at' EU
under a total of 24 different headings – from
procure-o-crats. In our view the Green Paper
the 'modernisation of procedures' to the
and the manner in which its consequent
promotion of 'innovation' through
consultation has been managed demonstrate
procurement.
an earnest attempt by the Commission to
modernise procurement.
With a little background set, let's examine
how the proposals are likely to affect you. We
Far from being straight-forward that is
will start with the positive first, then moving
something that entails a difficult balance
on to the other side of the picture.
between international treaty obligations, the
requirements of maintaining an open market
and the demands of Europe's economy.
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3. 5 Changes That Would Help You Win More Public Contracts
Various reviews of the impact and performance of the Union's public procurement regime have
highlighted disappointingly low levels of access to public spending among smaller enterprises,
as well as low cross border access to public contracts generally.
This is one of the key factors in putting the issues of greater flexibility and reduced
administrative costs (for both buyer and seller) on the EU procurement agenda. In short the
Commission is concerned to make it easier to bid for public projects. Some of the ways in
which this could benefit you are listed below.
1. 'Let's Sit Down And Talk...'
One of the key proposals offering the promise of greater flexibility is the more widespread use
of the Negotiated Procedure. In this model the purchaser selects one or more potential
bidders with whom to negotiate the terms of the contract (in most cases following an OJEU ad).
Presently the negotiated procedure is applied to approx. one fifth of advertised EU public
procurement tendering.
While there are concerns that the expansion of this procedure might restrict access and result
in favouritism, there are clearly situations where a 'let's sit down and talk' makes more sense
than the more rigid approach to tenders. Specifically contracts where the requirements are
complex and evolving, or where smaller sums are involved. If you would prefer a return to the
more traditional approach to selling a rise in the use of negotiated procedures is likely to be
welcome.
2. Shorter Sales Cycles
A proposal to collapse the two-stage EU public procurement process could help you win more
public sector business. In particular it has the potential to accelerate
public sector sales cycles and reduce tendering costs.
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4. Today's procurement rules stipulate that procurement decisions must involve two clearly
distinct steps:
The supplier selection/short-listing (based exclusively on appropriate supplier eligibility
criterion)
The award decision (based only on relevant product-service criterion).
Merging, or confusing these steps and their respective criterion results in the purchase process
being fatally flawed. For example, a buyer cannot consider supplier capability criterion at the
award stage - it is too late! Only product / service-specific criterion can be applied in making
the final decision.
The law has been interpreted to allow for the selection and award stages to happen
concurrently, once they remain distinct. However, the reality is that this rarely happens, which
means that the time and administration involved in the procurement exercise can in many
cases be doubled.
The Commission's proposal to collapse the two stages would enable greater speed and
flexibility in decision making. That is something that could benefit the seller as well as the
buyer.
3. Paperwork Only On Winning
Related to the two stage process, the Commission has suggested tackling the issue of the proof
of capability / certification requirements at the supplier selection stage. This could greatly
reduce the tendering burden.
The proposal is that while all bidders would have to declare that they meet the certification
criterion, actual proof, or documentary evidence of; certification need only be produced by the
winning bidder. Thus unsuccessful bidders would be spared some of the
paperwork and documentation burden.
There is also a proposal for greater standardisation of not just certification,
but also pre-qualification criterion EU wide. These measures if successful
could reduce the amount of time and money required by sellers to tender.
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5. 4. 'We Have Other Advantages To...'
The EU faces new challenges, including the environment and innovation, to name just two. It
would seem logical therefore that these goals should be reflected in how it spends money,
right? Well, reconciling new goals with the original objectives of an open and fair market in
public spending, is problematic.
One of the major problems is that the inclusion of decision making criterion or technical
specifications that are not 'subject-matter related' is not allowed. Here are two examples
offered in the Green Paper:
• While carbon and green are a priority, current rules don’t allow for any requirement that
does not relate to the manufacturing of the product and is not reflected in the product's
characteristics.
• Public authorities may claim that for environmental and health related reasons, certain
products should, or must be sourced locally. However, this represents an infringement of
EU law if it results in 'unjustified direct, or indirect discriminations between suppliers'
So, although as a supplier your proposition may be in support of the environment, innovation,
or another aspect of the public good – in most cases this cannot be a factor in the
procurement decision.
EU rules prevent arbitrary award decisions, by requiring that any criterion used must meet the
following conditions:
• Is linked to the subject-matter of the contract
• Is expressly mentioned in tender documents
• May not confer an unrestricted freedom of choice.
So it is that the best and best priced widget from an eligible supplier wins. The fact that no
trees have been cut down in the process, or you have won an international award for
innovation makes no difference. That means some of your supposed competitive advantages
are set to nought.
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6. If your advantages extend beyond the immediate good, or service you provide then breaking
the absolute requirement that all criteria direct relate to the subject matter could help you win
more business. It means that when you say 'we have other advantages too' the buyer may be
able to listen.
5. Clarification & Simplification
Many aspects of procurement are prone to confusion among both buyers and sellers. So, it is
good news that the Commission is exploring ways to clarify, standardize, or simplify many
aspects of public procurement. Some examples include:
• Simplifying definitions, including grouping part 1 and part 2 services and the definition of
works contracts
• Revisiting and clarifying the scope of the rules, including; whether regulations apply
beyond public purchases to other spheres of public activity, public-private partnerships,
below threshold contracts, local and regional authorities, utilities and social services
• Clarifying and standardizing how many areas are to be treated, including; disqualification
grounds and procedures, conflicts of interest, cross border projects, sub-contracting and
contract termination
If you find aspects of public procurement confusing, then a simplification and clarification of
those areas most prone to confusion, is sure to be welcome.
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7. 5 Changes That Could Hinder You In Winning More Public Contracts
When it comes to the proposals of the Commission it is not all good news for sellers. Here are
some of the changes that if implemented could make it more difficult to win public sector
business:
1. The Incumbency Advantage
The Commission is drawing attention to the risk of an unfair advantage being conferred on an
incumbent supplier. That includes the possibility of favouritism where a bidder has had a
previous relationship, or has been involved in designing the specification.
One of the proposals is to require the publication to all bidders of any knowledge, or
information to which an incumbent supplier has unique access. If you are the incumbent
supplier you won't welcome this proposal, however practical or impractical it may be.
2. Business As Usual!
If the public buyer makes significant contract changes following the award, a return to the
tendering process is typically required. This is also likely to be required for changes that occur
on the contractor side (internal re-organisation, bankruptcy, loss of crucial staff, etc.). The
result is a zero tolerance approach to amending the contract, or its implementation.
It is an area that can however give rise to confusion and one which the Commission proposes to
clarify. The commission is also addressing the issues as to whether in an environment of fast
change, some modifications in contracts once awarded should be accommodated.
In a related issue the commission has highlighted the absence of regulations on sub-
contracting by the successful tenderer. This introduces an element of uncertainty into project
delivery.
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8. Presently regulations enable contracting authorities to require that tenderers give notice of
likely or planned sub-contracting. However the court has stipulated that a tenderer is generally
entitled to sub-contract and can only be prohibited where the contracting authority has been
unable to verify the technical and economic capabilities of the subcontractor. |
The grounds on which contracts can be terminated, as well as the procedures involved are also
up for discussion.
These measures to give buyers greater flexibility to adapt and respond in the contract
implementation stage may not be welcomed by sellers.
3. You Are Disqualified!
EU directives require the disqualification of bidders convicted of certain listed offences (notably
corruption), as well as for other unsound business practices (including 'grave professional
misconduct'). However confusion can arise, particularly in the context of various national
standards and safeguards.
Now the commission proposes a more rigorous exclusion regime. It proposes that actions, such
as; corruption, or deliberately undeclared conflicts of interest should be subject to more severe
sanction. It also proposes to mandate disqualification for attempts to gain access to
confidential information, or to unduly influence the tendering process.
If the EU Commission's proposals are accepted then more sellers are likely to face exclusion and
disqualification.
4. Central Buying
Newer regulations have facilitated centralized buying and the use of
framework agreements. However the Commission is considering
whether the measures now in place go far enough. If more provisions
for aggregated demand (including cross border aggregation) are
implemented the result is likely to be a concentration of business
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9. among fewer suppliers.
5. More Centralized Control
Many of the changes up for discussion could have the result of generating more rules and
increasing the administrative burden involved for both buyer and seller. Examples include:
• Standardizing anti-corruption measures
• The strategic use of procurement to achieve other goals
• Preventing conflicts of interest
• Regulating unfair advantages
Sellers know that clarification and standardisation, typically means more rules and regulations.
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