Presentation on theme: "1 Introduction to Public Procurement Julie Nazerali Partner, Beachcroft LLP, Brussels and London 5 June 2009."— Presentation transcript:
1 Introduction to Public Procurement Julie Nazerali Partner, Beachcroft LLP, Brussels and London 5 June 2009
2 Today’s Menu 1. EU Procurement Regime 2. Public Private Partnerships and Competitive Dialogue 3. Key issues 4. Trends
3 1.EU Procurement Regime So why procurement rules? EC Treaty: Common Market between all Member States Breach of public procurement rules acts as a barrier to trade Total public procurement estimated at about 16% of EU GDP or £1000 billion Increase of cross-border competition and improvement of prices
4 1.EU Procurement Regime The General Regime Directive 2004/18/EC (Works, Supply and Services) Directive 2004/17/EC (Utilities) Directive 2007/66/EC (Remedies)
5 1. EU Procurement Regime What thresholds apply? Type of contractThreshold Supplies Central Authorities Other Authorities €133,000 €206,000 Services Part A Central Authorities Part A Other Authorities Part B All Authorities €133,000 €206,000 Works Works/Concessions €5,150,000
6 1. EU Procurement Regime Procedures Open = All bidders invited Restricted = Only certain bidders invited Negotiated = Allows discussion/negotiation Competitive Dialogue = Allows discussion
7 1. EU Procurement Regime Transparency / Equal treatment Advertise intention to procure Hold a competition between interested firms Exclude firms only for justified reasons Respect minimum time-limits for all participants Award contract based on results of the competition Provide information on decisions to interested parties 10 day standstill period between award decision and conclusion of contract Common principles
8 1. EU Procurement Regime Rules applying to Part B services or below threshold contracts Part B services: Health, education and cultural services Full procurement rules don’t apply When a contract is of “cross-border interest”: EC principles apply: non-discrimination and equal treatment, transparency, proportionality Sufficient degree of advertising, eg. Internet Fair competition must be respected Relevant factors to be considered: value/subject matter of the contract, size/structure of the sector concerned
9 1. EU Procurement Regime Complaint to the Commission Informal procedure – “a friendly settlement”? Formal procedure: Letter of infringement to Member State Reasoned opinion Proceedings before ECJ Complainant does not receive damages Proceedings before a national court Now Injunction proceedings Damages What happens if things go wrong?
10 2. Public Private Partnerships (PPPs) PPPs deliver a project/service traditionally provided by the public sector How?: Through concessions, JVs and partial privatisations Contract awarded to a PPP vehicle does not need to be tendered, if: The private partner was chosen in a fair and transparent tender exercise The nature and scope of the contract was covered when tendering for the private partner PPPs often used for road and rail infrastructure projects
11 2. Competitive Dialogue (CD) Used for “Particularly Complex Contracts” Came into operation in 2006 Negotiated procedure can only be used in limited cases and not for CD Used where open/restricted procedures not available; and Not possible to define technical specifications; or The legal and/or financial make up of the project
12 2. Competitive Dialogue OJEU Notice Pre-qualification Questionnaire Select/shortlist participants Invitation to tender Dialogue Phase – Successive stages possible End Dialogue and invite final TendersEvaluation of tenders Award contract Observe 10 day standstill Contract Signature Competitive Dialogue/Negotiated procedure All procedures apart from open procedure How does it work?
13 2. Competitive Dialogue Allows for discussions on all aspects of the contract during the dialogue stage Authority can discuss each bidder’s individual solution Allows for flexibility as to the setting/disclosure of evaluation criteria Allows for limited post-tender discussions with preferred bidder
14 3. Key issues The new Remedies Directive: four areas of reform Introduction of “ineffectiveness”: contracts may be set aside for serious breaches of procurement rules (eg. contract notice not published in the OJEU) Harmonisation of standstill provisions: 10/15 days before the conclusion of the contract Contracting authorities must send reasons with the award decision New time limits for seeking ineffectiveness in Court: 30 days for published award decisions / 6 months if bidders were not notified of the award decision or where OJEU contract award notice not published New rules bring in a defacto injunction procedure
15 3. Key issues The new Remedies Directive: some further info Court may not render a contract ineffective if it finds that there are good reasons for doing so, ie. reasons relating to a “general interest of non-economic nature” Alternative remedies: contract shortening and fines applied as An alternative to using the ineffectiveness principle, and/or In addition to prospective ineffectiveness Does not apply to Part B services or below threshold contracts To be implemented by December 2009
16 3. Key issues Disclosure of Award Criteria/Weightings - what must be disclosed? Award criteria and respective weightings: + Sub-criteria and respective weightings: (+) if they could have had an impact on the preparation of bids Other evaluation elements (scoring matrix etc.): (+) if they could have had an impact on the preparation of bids
17 3. Key issues Exception to procurement rules: In-house contracts A Contracting Authority (CA) can award a contract to another public body without holding a tender exercise, if: The CA exercises control over the entity that is similar to the control it exercises over its own department, and The entity carries out the essential part of its activities for the CA Eg. the ECJ ruled that the transfer of the operation of a local authority’s cable TV network to a co-operative could be done without a tender exercise since the latter was controlled by a Board composed of representatives of the public authority (Coditel Brabant, Case C-342/07)
18 4. Trends Watch out for the Remedies Directive! Bidders are becoming much more litigious CAs must ensure robust procurement compliance Still many grey areas in procurement law (eg. in-house awards, land transactions, change of award criteria in CD procedures, social award criteria, post-contract changes).