1. Public Procurement Reform Gergő Poszler European Commission Directorate General Internal Market and Services Unit C/2 – Public Procurement Legislation I. NB: The information in this presentation is not binding for the European Commission and does not present an official position of the European Commission

2. Objectives of the Reform 21/09/2015 1. Simpler / more flexible procedures 2. Strategic use 3. Better access (SMEs, cross-border trade) 4. Sound procedures 5. Governance / Professionalisation of procurement

3. Scope of proposals  Two proposals, replacing Directive 2004/18/EC (Classic) and Directive 2004/17/EC (Utilities)  No changes to the Directives on Defence procurement (2009/81/EC) nor on Remedies (89/665/EEC and 92/13/EEC, both as amended by 2007/66/EC)  Other parallel proposals : –Proposal on concessions –Proposal for a Regulation on International Access

4. Scope/basic provisions  Thresholds (no change)  Exclusions: In particular public-public, Art. 11  Abandoning A/B-services distinction – but  Specific regime for Social services (social, health and cultural services):  Simplified rules: Higher threshold – EUR 500 000 (Art. 4 d) –Below threshold: typically no-cross-border interest (recital 11) –Above threshold: Member States free to decide on procedures, only requirement: ex-ante (+ ex-post) OJ publication (Art. 75) + non-discrimination (Art. 76 (1))

5. Flexibilisation of procedures  Possibility of increased use of “competitive procedure with negotiation” (Art. 24 & 27)  Simplification/added flexibility for competitive dialogue, framework agreements and DPS (dynamic purchasing systems)  Simplified publication for sub-central contracting authorities: prior information notice replaces contract notice (Art. 24 (2)(b))  General review of deadlines

6. Strategic use  No abandoning of link with the subject matter, but softening (production process, externalities – Art. 66, 67)  Facilitate handling of societal requirements through labels (Art. 41) –Specific label may be requested if requirements linked to the subject-matter of the product –Equivalent labels must be accepted as well –Possibility for economic operators to provide alternative evidence where no access to the label in due time

7. Strategic use: Environment  Allow production process (e.g. paper bleach) in: –technical specifications (Art. 40) and –as award criterion (Art. 66)  Clarify concept of life-cycle costing optional, allowing to take into account externalities if verifiable and monetisable (Art. 67.1 b)  Existing common EU methodology = mandatory where life-cycle costing chosen (Art. 67.3)

8. Strategic use: Social aspects  Production process related requirements –as award criteria (Art. 66) –in contract execution clauses –requirements must concern protection of health of staff or social integration of disadvantaged persons (Rec. 41) –Example: recruitment of disadvantaged persons for the provision of the service

9. Strategic use: Innovation  Innovation partnership (Art. 29) = new procedure:  the contracting authority cooperates with a company  selected in a regular competitive tender procedure  to develop an innovative product, work or service, which does not exist on the market

10. E-procurement  Mandatory full electronic availability of tender documents (Art. 51)  Fully electronic communication = mandatory 2 years after transposition deadline (Art. 19.7)  Improved e-tools:  simplification of Dynamic Purchasing Systems (Art. 32)  e-catalogues (Art. 34)  e-signatures (Art. 19.5)

11. SME access  Division of contracts into lots (Art. 44): “apply or explain” - EUR 500 000 / EUR 5 Million  Turnover cap (Art. 56.3) (economic and financial standing): max. 3x the estimated contract value  Reduced documentation requirements, self- certification, use of existing databases  Direct payment of subcontractors

12. Sound procedures and governance Conflict of interest Illicit conduct Unfair advantages National oversight bodies Knowledge centres Administrative cooperation

13. Utilities: Proposed changes  Essentially same changes proposed for the Utilities as for the Classic Directive - but  Due regard to the different field of application (also public and private undertakings) and the ensuing need to conserve a more flexible regime.  Only few changes on issues specific to the Utilities Directive 21/09/2015

14. Utilities: Specific Issues ( Ex Art. 30) Activities directly exposed to competition (Art. 27, 28, Annex III):  Material conditions are unchanged - Uniform and more flexible deadlines (Member States & contracting entities) - Mandatory inclusion of a reasoned and substantiated position by competition authority/regulator  Explicit clarification of the notion of "special and exclusive rights" (Art. 4(2), Annex II)  No special or exclusive rights where rights granted following procedures ensuring adequate transparency, based on objective criteria ;  List of legislation (procedures) meeting the requirements (including concessions proposal) 21/09/2015

15. Process COMMISSION PROPOSAL 20 December 2011 COMMISSION PROPOSAL 20 December 2011 COUNCIL GENERAL APPROACH 10 December 2012 COUNCIL GENERAL APPROACH 10 December 2012 PARLIAMENT IMCO REPORT 18 December 2012 PARLIAMENT IMCO REPORT 18 December 2012 TRIALOGUE February/March 2013 - ? TRIALOGUE February/March 2013 - ?

16. Council General Approach Main amendments: –Light regime 750,000 threshold, additional services (legal, administrative, investigation and security, restaurant, etc.) –Documentation requirements No procurement passport, diminished role for e-Certis –Governance Far-reaching reduction of scope of provisions –Public-public Outside activities increased from 10% to 20% –Transposition, e-procurement introduction Longer periods (+6, +12 months)

17. IMCO Report Main amendments: –“Localism” short-distance award criterion, social external costs –Contract modification Increase of scope for modifications without new tender –Additional exclusions Danger prevention, fixed price procurement –Public-public Elimination of certain criteria for horizontal cooperation –Reciprocity regarding 3rd country operators Insertion of Art 58-59 from 2004/17/EC

18. Important remaining issues (1) –Procedures “Tool-box” vs. obligation to transpose all procedures Use of PIN for sub-central contracting authorities –Strategic procurement MEAT only vs. lowest price/cost (at least for standardised goods) Eliminate “localism” provisions Obligation to ensure compliance with social, environmental and labour law – coherence with posting of workers regime –Documentary requirements Replace procurement passport with enhanced access to national databases

19. Important remaining issues (2) –E-procurement Fixing deadlines for mandatory introduction –SMEs Indication of reasons for not splitting into lots Ratio minimum annual turnover – contract value Subcontracting: “liability throughout the subcontracting chain” –Aggregation of demand Adherence of new contracting authorities to framework contracts; maximum length (4-5 years) Use of central purchasing bodies, occasional joint procurement up to Member State / up to contracting authority

20. Important remaining issues (3) –Procedural requirements Variants: obligatory authorisation vs choice of contracting auth. –Sound procedures Modifications: ensure reasonable scope of de minimis rule for non-substantial modifications (10%-15% and below threshold) –Governance Agree on scope for monitoring and national reporting –Scope Agree on exclusions, public-public, transposition deadline Avoid blockade on reciprocity (3rd country operators)

21. Outlook Remaining issues are surmountable Therefore aim to finalise project in 1 st reading: Letter COREPER - IMCO Letter COREPER - IMCO TRIALOGUE Political Agreement reached TRIALOGUE Political Agreement reached Vote - PARLIAMENT (endorsing the Political Agreement) Vote - PARLIAMENT (endorsing the Political Agreement) Adoption COUNCIL Adoption COUNCIL

22. Thank you for your attention! Questions?