1. Anti-corruption measures under the new EU Public Procurement Directives
Naples
25 June 2014
Silvio GRIECO
European Commission
Directorate General Internal Market and Services
Directorate C - Public procurement

2. Presentation outline
Public procurement was the subject of a special chapter in the first EU Anti-Corruption report, published on 3 February 2014.
Public procurement was chosen because it is:
of crucial importance for the Internal market
covered by extensive EU legislation
a "Hot spot" for corruption.
Public procurement rules, besides the main aim of opening the market, contribute to:
Preventing corruption
Detecting corruption
Redressing corruption.
19/09/2018

3. Public Procurement is of crucial importance for the Internal Market
1/5 of EU GDP (= 2.3 Trillion Euro) spent by European contracting entities on goods, works and services.
Total value of calls for tenders above thresholds for the application of EU rules ( EUR works, EUR most supplies and services): approx. 425 Billion in 2011.
Italian data: Public procurement worth about Billion in Public works, goods and services constituted 15,9 % of Italian GDP.
19/09/2018

4. Public Procurement is covered by extensive EU legislation
Revised Classic Public Procurement and Utilities (water, postal, energy, transport) Directives entered into force on 17th April 2014.
New Concessions Directive.
Remedies Directives to exercise judicial control over the procurement process.
Defence procurement Directive to regulate procurement in a high price and formerly intransparent sector.
19/09/2018

5. Public Procurement: a "hot spot" for corruption
High level of financial interests at stake, especially in certain sectors (e.g. infrastructure).
The costs of corruption are difficult to quantify, but they are too high, as regards the effects on
the economy,
citizens' trust.
Situation in Italy: According to the 2013 Eurobarometer Business survey on corruption, 70 % of Italian respondents consider corruption widespread in national public procurement (EU average: 56 %).
19/09/2018

6. Public Procurement rules to prevent corruption
19/09/2018

7. General principles for transparent procedures
Rules for public procurement are there to guarantee transparent and non-discriminatory procedures
As transparency is the worst enemy of corruption, public procurement rules, if followed, prevent corruption.
Contracting entities, to remain the master of the process, should make use of:
Prior publication of tenders
Clear and unbiased technical specifications
Equal treatment of bidders in all stages of the process.
19/09/2018

8. General principles for transparent procedures
Contracting entities, to get what they need at the best price, should also make use of:
Objective evaluation of tenders
according to an appropriate methodology,
unbiased award criteria,
not guided by conflicts of interests;
Concluding the contract as tendered;
Executing the contract as concluded.
19/09/2018

9. The EU Reform of Public Procurement
The reform of the public procurement directives and the new concessions directive should ensure
effective procedures for purchases at best price
tailored procedures to all possible needs of contracting authorities
simpler rules because complex, bureaucratic processes extend the opportunities for corruption.
The transposition period of these new directives gives each Member State the opportunity
to raise awareness of the rules amongst all public procurement actors, including the judiciary,
to overhaul the organisation of its public sector,
to reconsider in depth the efficiency of its current public procurement and anti-corruption policy.
19/09/2018

10. The EU Reform of Public Procurement
The new directives enhance transparency:
E-procurement is generalised and becomes mandatory.
The setting of a legal framework for concession contracts enhances transparency in this field.
A standard form self-declaration for bidders, the "European Single Procurement Document" is introduced, which makes it more difficult to exclude tenders in the selection phase.
19/09/2018

11. The EU Reform of Public Procurement
The new directives enhance transparency:
The scope of the public procurement directives is extended to the post-award phase, which is particularly vulnerable to corruption, as the modification of contracts during their term without a new tender procedure is now regulated.
Copies of high value contracts must be made available on request with exceptions for commercially sensitive information.
Guidance for contracting authorities by Member States and administrative exchange of information are required by the Directives.
19/09/2018

12. The EU Reform of Public Procurement
The new Directives strengthen the anti-corruption purpose:
The exclusion grounds for bidders are strengthened and extended to situations where bidders:
have entered into agreements
have tried to influence or mislead the contracting authority
have tried to obtain confidential information.
The notion of "conflicts of interests" is defined on EU level and Member States and contracting authorities are asked to take appropriate measures to effectively prevent, identify and remedy conflicts of interests.
Member States must monitor and report on measures to prevent and detect procurement fraud, corruption and conflicts of interest and other serious irregularities.
19/09/2018

13. Public Procurement rules to prevent corruption: good practices
E-procurement, Portuguese portal allowing for:
downloading entire documentation free of charge,
managing all aspects of information exchange online,
monitoring of concluded contracts,
e-invoicing,
collecting statistics on the procurement process.
Prevention of conflicts of interests, Croatian database:
is run by an NGO free of charge to the public,
gathers information on public procurement procedures, companies, assets and interests of officials,
allows for cross-checks.
19/09/2018

14. Public Procurement rules to detect corruption
19/09/2018

15. Monitoring
Member States need an efficient monitoring system based on relevant indicators for corruption = red flags.
The colleague from OLAF already talked about red flags.
In order to develop mechanisms to better detect and address corruption, Commission services want to identify the most relevant red flags for corruption in PP.
One IT tool, which is based on such indicators, is presented in the parallel workshop on ARACHNE.
It is to be seen what can be the consequences of ignoring relevant red flags for procuring and supervisory authorities.
Likewise, it is to be seen how the monitoring of public procurement can be further developed on EU and MS level.
19/09/2018

16. Public Procurement rules to redress corruption
19/09/2018

17. Redress corruption Effective review procedures
according to the rules of the Remedies Directives
by independent and professional review bodies
Effective monetary follow-up of corrupt practices
by applying financial corrections to EU funds,
by annulling affected contracts ex-tunc?
Effective sanctioning of corruption in procurement
by an independent judiciary which knows the public procurement rules and is vigilant to corruption.
in a procedure of appropriate length
19/09/2018

18. Redress corruption
As all controls have limits, what is mainly needed, is a change of attitude: Culture of Integrity - Public service for
Better quality – procurement officers have to work with their purchases
Increased public savings – to have more budget for higher salaries
Improved business environment – local taxes ->better infrastructure
Procurement officers should take responsibility from the very beginning of the process until the very end.
Political leaders should lead by example.
19/09/2018

19. Public procurement and corruption in Italy: recent developments
Anti-corruption law 2012 (online-publication by all administrations of annual accounts, broken-down costs of public contracts, ongoing and past tender procedures)
Anti-corruption Authority – control powers over public contracts?
Legislation on traceability of funds and transactions
19/09/2018

20. Public procurement and corruption in Italy: need for a systemic reform?
Simplification of the Code of Public Contracts and its execution Regulation
Improving the administrative capacity of contracting and supervisory authorities
Closer monitoring the post-award phase
Mechanisms to reduce litigation
19/09/2018

21. Thank you for your attention
All information can be retrieved on our website:
Contact:
19/09/2018