Heide Rühle paper on procurement regulations accepted by EU parliament

The next step in the revision of EU procurement regulations was  taken last week when a paper was put to the European Parliament by the German Green Party MEP Heide Rühle. So I’m guessing I’m one of about 10 people in the UK who has actually now read this document (as opposed to just the press release), and actually, it is surprisingly readable and sensible.

We featured previously in some detail the UK’s proposals for change to the Regulations, and I think in general the UK will be quite pleased by what is in this paper. There seems to be a lot of issues where the UK line is reflected. For instance, making the “most economically advantageous tender” criterion mandatory and losing “lowest price” as an option, not that it was used often anyway. Also supporting pre-commercial procurement as a tool for innovation (see Lisa Dale's post here), and the desire to “reassess the appropriate level of thresholds for supply and services contracts, and if necessary raise them.”

Sustainability gets well covered. Contracting authorities should include environmental costs in their assessment of MEAT, and sustainability can be integrated at each stage of the procurement process. There is some interesting discussion around sub-contracting, although it is seen as a future topic rather than to be incorporated this time round as far as I can see. For example, should the EU look at whether “further rules on the award of subcontracts are needed, for example on the establishment of a chain of responsibility, specifically to avoid SME subcontractors being subject to conditions worse than those applicable to the main contractor awarded the public contract”.

There’s a section about simplification, which fits well with the UK proposals, and raises some good points for example in terms of suppliers’ ability (or lack of ability ) to rectify omissions in their bids. And “contracting authorities should be able to benefit from previous experience with a tenderer on the basis of an official evaluation report” which would be good news. It has always seemed crazy that in an evaluation, we couldn’t take into account the fact that a supplier had shown they were incompetent in previous contracts! The paper is also positive about greater use of the negotiated procedure, which was a UK point too.

In terms of developing professionalism, the Paper “recommends setting up a network of centres of excellence within the existing national frameworks, and promoting exchanges of information and good practices between Member States; also encourages umbrella organisations, at both national and EU level, to take shared responsibility for making relevant information available and to facilitate exchanges of information between their members throughout Europe..” Of course the UK has pretty much lost its “centre of excellence”  with the demise of OGC – although the Cabinet Office retains some of those functions and the overall public procurement policy brief, it is working to a more limited remit these days.

However, there are a couple of points that maybe don’t align quite as well with the UK line. One we’re particularly interested in, given the focus on small firms, is around dis-aggregation and using “lots”. Some countries promote this already strongly – the concept is that basically, if you can feasibly split up a contract into smaller sub-contracts or lots, then you should as this helps smaller organisations bid. The paper "Asks the Commission to increase awareness of the importance of splitting contracts into lots, and to consider the implementation of the ‘apply or explain’ principle, whereby rules on matters such as division into lots must be complied with, or the failure to comply explained".

But this goes against much of the thrust of UK public sector procurement over the last few years, where we’ve moved into more collaboration, more use of Prime Contractors in PFI environment and elsewhere, and more examples of large Government Departments looking to let national contracts.

If there was actually something in the Regulations, that might mean for instance that HMRC and the Government Procurement Service would have had to split their recent Print Management or Office Solutions tenders into smaller parts, rather than awarding single, huge, national contracts.  There are pros and cons around this topic, but any legislative changes would mean the UK would need to change its approach in many areas.

There’s a whole section on E-procurement that we may come back to; but I do recommend you read the whole paper if you’re a public procurement person. As I say, it’s not as hard work as you might expect!

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