EU Procurement Regulations – a bulwark against corruption, or a pain in the bulwarks?

We had an interesting debate last week in our “comments” section around the EU regulations – or the proposed changes to them. It wasn’t an argument really, more a constructive discussion. I wanted to feature it here as it was at least as interesting as most of the material I produce.  It started with Dan’s excellent comment (more of a guest post really!)

“As a public sector procurer and a law graduate, the problem I have with these proposals is that, while needed, they reflect a missed opportunity. The original procurement rules were put in place in 1993 …in those times, the public sector provided most services in-house and ‘procurement’ was synonymous with ‘requisitioning’. ‘Commissioning’ was unheard of…

The focus of procurers was purchasing goods, and the directive reflected this. For example, the early CPV codes were so detailed when it came to goods, you could find one for ‘costume jewellery’ (I would pay good money to know if anyone ever procured that!), but IT services were lumped together in as few codes as possible. The preferred method was open tendering, with little or no scope for negotiation, and pre-contract market testing was not really considered to be necessary.

Since then, procurement, especially in the public sector, has undergone a massive transformation. Procurers have become much more professional and effective. There is more focus on services, and complex services such as outsourcing have become much more common. However, while the competitive dialogue process has been added to the repertoire, this can only be used in certain circumstances; the focus is still on tendering and no negotiation. The rules have been tweaked rather than overhauled.

I think the Commission could have taken the opportunity to undertake a root-and-branch review of public procurement and make it a better fit for the modern day, e.g. allowing more post-tender negotiation, making it easier to judge variant bids, allowing procurers to use outside knowledge of bidders instead of having to accept what they promised in their tenders etc. They could also make it slightly less bidder-friendly, as the remedies directive merely makes procurers more risk averse and bureaucratic an overhauled”.

Thought-provoking stuff from Dan - debate then got into why the EU is so heavy handed. Bitter and Twisted said “Isn’t the fundamental problem that ‘fairness to the bidders’ has trumped ‘value for the taxpayer’ ?

Or is it partly the fault of procurement people who don’t want to take risks; as Final Furlong said,

But purchasers seem to cling on to the Book of Contract Regs like a vicar holds on to his bible, quoting (vaguely) relevant passages to his ‘flock’.

Dan pointed out that the EU regulations are not in place to make procurement’s life easier, or help contracting authorities to move quickly. They’re there to promote competition and guard against public sector corruption, which is why we will never see public procurement allowed to act as freely as the private sector.  But he believes that the EU threat of being punished, even for totally accidental and innocent non-compliance, causes delays, is heavy-handed and unnecessary.

Paul finished the debate by pointing out that:

When we look at private sector procurement we also have to remember that some practices would not be acceptable in the public sector for political reasons (I don’t mean party politics but what the papers would say).

That’s true, and I wouldn’t under-estimate the risks if the EU regimes were relaxed.  If you think that public sector procurers can be relied upon in the absence of regulation to act in a fair, unbiased and incorruptible manner – well, in the vast majority of cases you are right. I have more of an issue with the budget holders, senior officials and councillors.

Would we see more contracts going to the local golf club or rotary gang, or party donors?  Or outright fraud with backhanders and bribes? That’s what history suggests, and if you don’t agree, I can only suggest you subscribe to Private Eye and follow sagas like the Cotswold Water Park, Isle of Wight road repairs.. and so on. Even if it's not always criminal, there is a lot of poor practice (to say the least) out there. Or have a beer with my friend who worked in the building supplies industry and he’ll name the councils where everyone knew you paid a back-hander to certain managers to win work.

It does still go on, unfortunately – but less than it used to, I suspect.  So getting the balance right seems to me vital, and I do agree that it has tilted too far because of developments like the Remedies Directive. Anyway, a great debate – thanks to all who contributed or just read and enjoyed!

Voices (2)

  1. Phoenix:

    I understood that the primary reason for the EU Procurement Regs was because the single European market needed to be opened up. There needed to be much more cross-border public procurement between member states if the EU was going to be an economic power-house on a par with the United States (at the time – 1993 – the BRIC countries still had some way to catch up). I seem to remember that cross-border procurement accounted for about 2% at that time. I’d be interested to know what it is now.

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