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29 April 2012 | Paul Snell

All public sector buyers will be required to carry out procurement electronically by 2016.

The European Commission has set the deadline, with the belief that a total of €100 billion (£82 billion) can be saved annually from the €2 trillion (£1.6 trillion) procurement spend across the EU by mandating e-procurement must be used.

This will include posting all contract opportunities online, making all tender documents available, the electronic submission of bids and making all communication digital. Central government bodies will have to achieve all this by mid-2014. The wider public sector will have to achieve the first two elements by the same date, but will be given until mid-2016 to meet the communication aspect. The Commission itself will move to full e-procurement by mid-2015.

In addition to the proposed cost savings for authorities, it also claims SMEs will benefit from greater use of technology with a simpler and cheaper process. It claims the cost to public bodies of implementing these systems will be offset by the savings they make. It will also provide examples of best practice and a publicity campaign of the benefits.

"It's time to act. E-procurement represents significant untapped potential for the EU economy. It can simplify the way procurement is conducted, reduce burdens and costs, increase the participation of SMEs and deliver better quality and lower prices. The sooner the transition is initiated, the sooner we will reap the benefits offered by e-procurement," said EC internal market commissioner Michel Barnier in a statement.

The Commission has set out targets for e-procurement implementation in the public sector previously, but these have been missed. It proposed in 2005 to move all procurement online by 2010. In reality, e-procurement is used in just 5 to 10 per cent of procurement processes.

The results of the consultation, which have led to this announcement, found 53 per cent were in favour of making electronic purchasing mandatory, compared with 42 per cent that were opposed.

The EC will publish a progress report in mid-2013, to identify any outstanding issues.

* Meanwhile, the EC has written to the UK government demanding it explain why it has not implemented rules of defence purchasing in Gibraltar.

Although the new defence and security procurement directive was implemented in the UK on 21 August last year, it has not yet been transposed to Gibraltar. The government now has two months to explain how it will remedy the situation, or the EC will refer the case to the European Court.