6 October 2011 | David Hansom
It is easy to criticise the European Commission’s procurement rules, but as it examines its directives more closely, the need for consistency remains
The European Commission has been consulting on reforming the public procurement regulations. Separately, the UK government has promised to “look again” at the way in which the EU directives are applied in the UK, in part prompted by the fallout from the Thameslink train controversy. So what can we expect to be the main changes?
The main stated aims of the Commission’s consultation is to make sure the procurement directives are fit for purpose by supporting growth and job creation as well as helping SMEs to bid for and win public contracts.
The Commission’s green paper identified possible areas for reform. These included the flexibility of existing procurement routes and whether new routes were needed, the exclusions to the rules, the detailed rules that apply, clarifications over different types of contract and the treatment of different types of services. Of these, two issues are noteworthy.
Some commentators view the rules as sporadic in their approach, with a great deal of focus on the pre-qualification stage, but far less on the tendering stage. But the Commission’s concern has long been to ensure access to tendering opportunities (and, in particular, that bidders are not excluded for irrelevant or discriminatory reasons), but giving more discretion to the authority in the actual process to choose the winner. The Commission could give more explicit opportunity in the rules for SME contractors to be encouraged to bid for contracts. New rules could require authorities to ensure all minimum limits are bespoke, relevant and proportionate to the contract, and to the type of likely bidder. Too often SMEs are excluded because authorities re-use documentation from previous transactions with unnecessary minimum insurance levels.
Others have singled out competitive dialogue process as a process ripe for change or even abolition. It is said to be inefficient, slow and expensive by front-loading negotiations with bidders. If the procedure is used poorly, all of this is true. Bid costs can escalate and bidders are more inclined to seek damages when unsuccessful. But the solution is not obvious. The negotiated procedure was replaced as the route of choice for complex contracts because of concern about the lack of transparency in negotiations that took place with one bidder after selection. Any process that maintains competition will mean a losing bidder is kept in the game for longer.
It is easy to criticise the procurement rules. But the need for consistency has never been greater. The only way to protect against self-interested purchasing by every member state is to accept a one-size-fits-all regime. Public bodies in the UK are generally compliant with the EU rules and there is a growing bedrock of expertise in contracting authorities. The question remains as to whether each member state will apply the rules in the same way. The Commission has its work cut out to ensure compliance.
☛ David Hansom is a partner and head of the public sector team at Veale Wasbrough Vizards
