Procedure : 2006/2084(INI)
Document stages in plenary
Document selected : A6-0226/2007

Texts tabled :

A6-0226/2007

Debates :

PV 19/06/2007 - 17
CRE 19/06/2007 - 17

Votes :

PV 20/06/2007 - 5.8
Explanations of votes

Texts adopted :

P6_TA(2007)0273

REPORT     
PDF 163kWORD 120k
11.6.2007
PE 388.489v02-00 A6-0226/2007

on specific problems in the Transposition and Implementation of Public Procurement Legislation and its relation to the Lisbon agenda

(2006/2084(INI))

Committee on the Internal Market and Consumer Protection

Rapporteur: Arlene McCarthy

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
 EXPLANATORY STATEMENT
 OPINION of the Committee on Legal Affairs

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on specific problems in the Transposition and Implementation of Public Procurement legislation and its relation to the Lisbon agenda

(2006/2084(INI))

The European Parliament,

–    having regard to the Treaty establishing the European Community,

–    having regard to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts(1),

–    having regard to Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors(2),

–    having regard to Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts(3),

–    having regard to Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts(4),

–    having regard to European Parliament and Council Directive 97/52/EC of 13 October 1997 amending Directives 92/50/EEC, 93/36/EEC and 93/37/EEC concerning the coordination of procedures for the award of public service contracts, public supply contracts and public works contracts respectively(5),

–    having regard to Directive 98/4/EC of the European Parliament and of the Council of 16 February 1998 amending Directive 93/38/EEC coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors(6),

–    having regard to the Commission proposal for a directive on coordinating the procurement procedures of entities operating in the water, energy and transport sectors (COM(2000)0276),

–    having regard to the Commission proposal for a directive on the coordination of procedures for the award of public supply contracts, public service contracts and public works contracts (COM(2000)0275),

–    having regard to the Interinstitutional Agreement on better law-making(7),

–    having regard to Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts(8),

–    having regard to Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors(9),

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on the Internal Market and Consumer Protection and the opinion of the Committee on Legal Affairs (A6‑0226/2007),

A.  whereas Community law on public procurement aims to open public markets in the Member States to cross-border competition, thereby creating a level playing field for providers and supporting the development of the internal market;

B.   whereas the timely and correct transposition and implementation of public procurement legislation significantly contribute to meeting the objectives of the EU's better regulation programme;

C.  whereas the new public sector Directive (2004/18/EC) brings together three previous Directives for works, services and supplies, thereby clarifying and modernising the previous rules;

D.  whereas the new directives introduce new provisions and optional rules which provide increased flexibility to purchasing authorities, and whereas general efficiency increases can be achieved in public procurement by introducing the optional elements of the new public sector Directive (2004/18/EC) as these reduce transaction costs;

E.   whereas the new Directive (2004/17/EC) coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors introduces an exemption mechanism for activities fully open to competition across the EU;

F.   whereas the deadline for transposing the new Directives into national legislation was 31 January 2006 and whereas, to date, only 20 out of 27 Member States have transposed them; whereas delayed transposition creates an uneven legal playing-field across the EU;

G.  whereas some barriers to trade may also emerge if all optional elements in the new public sector Directive are not consistently implemented by all Member States;

H.  whereas the Commission is limited to offering its assistance on a voluntary basis to Member States in the transposition process, which is consequently not always effectively ensured;

I.    whereas the most frequently quoted barriers to satisfactory transposition are the lack of national legal expertise or human resources and the lack of political will in the Member States;

J.    whereas the internal market scoreboard of December 2006 notes significant improvements in transposition rates;

K.  whereas the majority of public procurement subject to the Directives complies with the rules, and therefore allegations that the internal market in public procurement is failing and threatens the achievement of Lisbon Agenda targets are unfounded;

L.   whereas nonetheless, there are problems in gathering data on public procurement which are linked in particular to the large number of contracting authorities and to the incomplete record on misapplications of the rules;

M.  whereas the Commission is concerned about the number of illegal direct awards;

N.  whereas illegal direct awards occur as a result of a number of factors including misunderstanding of the public procurement rules as set out in the Directives, Treaty principles and relevant rulings from the European Court of Justice; errors made in complex procurements; extensions of frameworks beyond their original scope or duration; alleged corrupt practices; the circumvention of lengthy timescales associated with EU advertising; and unnecessarily elaborate national tendering requirements, such as complex electronic purchasing arrangements;

O.  whereas there are concerns that the environmental or social criteria laid down in the new public sector Directive have the potential to be misapplied;

P.   whereas the Commission's ability to systematically take prompt legal action in cases of misapplication of the rules is limited by a lack of adequate human resources;

Q.  whereas the record on transposition and implementation could be improved by the promotion of professionalism and best practices in public procurement policies at Member State level;

R.  whereas in a number of Member States, best practices have been codified in effective procurement review systems;

S.  whereas pre-commercial procurement has been identified as an untapped opportunity in Europe to use public needs as a driver for innovation; whereas pre-commercial procurements can be organised within the existing legal frameworks set out by the WTO Government Procurement Agreement, the Commission public procurement Directives, the Treaty establishing the European Community, competition law including state aid law and the jurisprudence of the European Court of Justice;

Introduction

1.   Welcomes the recent modernisation and simplification of the EU public procurement rules, which has significantly boosted efficiency in EU public procurement processes;

Transposition of Community legislation on public procurement

2.   Considers that Member States should make full use of the Commission's assistance in the transposition process;

3.   Considers that the Commission should be given the human resources to police late and incorrect transposition more effectively;

4.  Stresses that Member States should actively exchange knowledge and best practice with each other on transposing public procurement legislation and improve cooperation with the Commission in this field;

5.   Considers that the inconsistent transposition of the optional elements of the new public sector Directive could have an adverse effect on the internal market, and accordingly encourages Member States to consider adopting all flexibility options; stresses in particular that these options could reduce the risk of illegal practices;

6.   Calls accordingly on the Commission to conduct a study to evaluate the impact of non-harmonised transposition of the optional elements of the new public sector Directive on cross-border tendering in the EU;

Implementation of Community legislation on public procurement

7.   Strongly believes that breaches of the rules could be reduced if Member States and the Commission introduced more collaborative practices; encourages therefore Member States and the Commission to actively promote informal exchanges at an early stage;

8.  Considers that, given the number of infringements, the Commission should be given the human resources to police the implementation of public procurement legislation more effectively;

9.   Calls on the Member States to provide the Commission with sufficient data on the implementation of the public procurement directives; urges moreover Member States and the Commission to work together towards increasing the capacity for better data collection and for better policing of transposition and implementation problems;

10. Calls for the introduction of national advisory agencies on public procurement to assist contracting authorities in the correct implementation of the public procurement rules, and to assist tenderers, in particular small and medium enterprises, in bidding for public contracts;

11. Calls on Member States to focus national efforts on detecting and sanctioning illegal practices and ensuring that all relevant national court judgments and ECJ rulings are respected;

12. Stresses that informal dispute settlement mechanisms can be complementary to formal remedies in public procurement and should benefit from greater visibility;

13. Strongly encourages Member States to coordinate and simplify electronic purchasing techniques to facilitate access to such procurements;

14. Welcomes the Commission's handbook on the application of environmental criteria;

15. Welcomes the Commission's ongoing study on the application of social criteria to ensure correct and effective application of those criteria; calls for the publication of guidelines on the application of social criteria on completion of the study;

Improving best practice in public procurement

16. Considers that Member States should devote more capacity to raising the level of procurement professionalism and sharing best practice at the national level to ensure consistent and even application of the public procurement rules by all contracting authorities and in areas of the rules where there is less clarity, particularly procurements falling outside the full scope of the Directives;

17. Points out that the systematic training of procurement professionals across the EU would enhance the transparency of national implementation measures and procedures in public procurement across the EU;

18. Stresses that a change is needed to move away from a budget-based approach to an outcome-focussed approach in public procurement, looking at whole project-cycle costs and requiring purchasing professionals to develop sound management and economic skills;

19. Encourages the Commission, in partnership with Member States, to improve knowledge dissemination at EU level in the field of public procurement;

20. Encourages the development of national procurement 'showcase conferences' displaying best-in-class public procurement projects and the development and coordination of the work of European networks for the exchange of best practice in public procurement;

21. Encourages the use by Member States of pre-commercial procurement, based on risk-benefit sharing between procurers and suppliers with a view to developing innovative solutions to address specific problems of public interest, as an effective tool for driving innovation in the EU;

Conclusion

22. Recommends that the Commission propose an action plan to encourage Member States to fulfil their obligation to tackle persistent and emerging transposition and implementation problems in public procurement, focusing on illegal direct awards and late or incorrect transposition;

*

* *

23. Instructs its President to forward this resolution to the Council, the Commission, the Court of Justice of the European Communities, the European Ombudsman, and the parliaments of the Member States.

(1)

OJ L 209, 24.7.1992, p. 1–24 .

(2)

OJ L 199, 9.8.1993, p. 84–138.

(3)

OJ L 199, 9.8.1993, p. 54–83.

(4)

OJ L 199, 9.8.1993, p. 1–53.

(5)

OJ L 328, 28.11.1997, p. 1–59.

(6)

OJ L 101, 1.4.1998, p. 1–16.

(7)

OJ C 321, 31.12.2003, p. 1.

(8)

OJ L 134, 30.4.2004, p. 114–240 .

(9)

OJ L 134, 30.4.2004, p. 1–113


EXPLANATORY STATEMENT

The new 2004 public procurement Directives set out a framework of minimum applicable standards for Member States and also enshrine relevant ECJ developments. In keeping with the drive for better regulation in the EU, the new Directives aim to simplify and modernise the earlier separate Directives on public procurement.

Given that public procurement accounts for in excess of 16% of EU Gross Domestic Product, and in the context of the challenges posed by EU enlargement, favouritism for national champions and other failures to award contracts on a competitive basis, are a continued threat to the health of a now expanded Internal Market.

In keeping with the better regulation programme of reviewing the effectiveness of legislation in force, the Committee on Internal Market and Consumer Protection has chosen to look at the problems arising in the aftermath of the introduction of the new Public Procurement Directives, focussing on the outstanding or new problems and on identifying the most practical and effective solutions to tackling them.

The Community remedy for tackling late transposition is Commission proceedings against Member States in the ECJ (following Article 226 or 228 procedures). The Commission can otherwise only encourage Member States to cooperate more actively with each other and with the Commission when transposing public procurement legislation.

Moreover EU public procurement data is still incomplete. Collecting data is mainly hampered by the large number of contracting authorities and the high proportion of procurement exempt from advertising in the OJEU. Furthermore, it is very difficult to monitor levels of discriminatory procurement practice since firms often choose not to complain for fear of being blacklisted. The cost of conducting useful studies is very high and the findings often inconclusive.

Although many accusations are frivolous, favouritism in awarding contracts tends to occur in politically sensitive cases, and because the levels of professionalism in public procurement are not consistent across the public sector. The lack of consistency in procurement professionalism is still a significant problem as is expertise generally for complex procurements or purchases not covered or fully covered by the Directives. Apart from the improvements tabled in the new remedies Directive, disseminating best practice and sharing positive experiences across the EU should be recommended.

The Commission considers illegal direct awards as the most serious breach of public procurement rules, and has expressed concern at their persistence. In particular, human resource limitations restrict the Commission in its ability to systematically take effective legal action in all cases. Furthermore, the Commission considers that there is a shortfall in effective remedies for illegal direct awards. Some authorities even disregard national court judgments. Sanctions should prioritise cases of contempt of court. Also, a recent report by the World Bank showed persisting if not increasing problems with corruption. Greater capacity within the Commission is one solution but a number of other approaches are proposed in this report.

The optional elements of the new public sector Directive allow purchasing authorities in Member States greater flexibility. These options are mainly: the use of central purchasing bodies; competitive dialogue; framework agreements; dynamic purchasing systems, and; electronic auctions. Non-transposition of certain options affects primarily the Member State concerned who will not benefit from the resulting efficiency and cost savings for buyers and bidders alike. These options can reduce improper procurement practices, but for example, insofar as they lead to aggregation in demand or streamlining, care needs to be taken to ensure SMEs can still bid on a level playing field with larger suppliers. Electronic purchasing techniques and the use of Frameworks should generate cost and efficiency savings but there are also concerns about improper use, for example successful frameworks can be victims of their own success and frameworks can grow illegally beyond their advertised scope and value.

There are a number of existing codified good practices in public procurement in certain Member States which can serve as helpful examples to others, for example the continuous peer-review system which is in place for public procurement projects or major programmes in the UK known as the OGC Gateway review process. Also, there is a role for the development of advisory agencies in Member States to assist Contracting Authorities in implementation of the public procurement rules and to assist tenderers, in particular SMEs, in bidding for public contracts.

Finally, the new Directive aims to clarify how to meet environmental and social needs while observing EU rules. Environmental or social criteria are fully compatible with efficient cross-border procurement. However, it is necessary to ensure that purchasing authorities do not apply these criteria in a way that discriminates against firms in other Member States.

In summary, while the problems underlying non-transposition and implementation remain complex, this report focuses on a range of both formal and informal methods to improve performance across the EU in this important field.


OPINION of the Committee on Legal Affairs (11.6.2007)

for the Committee on the Internal Market and Consumer Protection

on the specific problems in the Transposition and Implementation of Public Procurement Legislation and its relation to the Lisbon Agenda

(2006/2084(INI))

Draftsman: Alain Lipietz

SUGGESTIONS

The Committee on Legal Affairs calls on the Committee on the Internal Market and Consumer Protection, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

A. whereas the Lisbon strategy proposes the establishment of an ‘active and dynamic welfare state’(1) in the pursuit of objectives ‘such as employment, regional development, environment...’(2) and that these objectives should be brought into line with the rules on competition and be made legally certain,

B.  whereas public procurement is becoming increasingly important for the economic growth of the EU and its internal market,

C. whereas Directives 2004/18/EC and 2004/17/EC were adopted with the aim of simplifying the legal framework, creating legal certainty and adapting to changing technological and economic circumstances,

D. whereas some of the innovative elements introduced by those Directives are not compulsory and whereas, consequently, their transposition may lead to different legislative outcomes in the Member States,

E.  whereas Directives 2004/18 and 2004/17 do not give a clear definition of ‘in-house’ contracts or other different forms of public-private partnership,

F.  whereas the case-law of the Court of Justice concerning in-house contracts confines itself to setting out in its judgments(3) indications of cases in which exceptions to the public procurement rules are justified,

G. whereas several Member States encourage their local authorities to set up institutionalised public-public partnerships with regard to which there is no established case-law,

H. whereas the Court has proposed criteria allowing certain institutionalised public-private partnerships to be linked to ‘in-house’ contracts(4),

I.   whereas the Court, in line with the Lisbon strategy, has determined that the first criterion in the awarding of public contracts must be the maximisation of benefit to the local population(5),

J.   having regard to its resolution of 26 October 2006 on public-private partnerships and Community law on public procurement and concessions(6),

1.  Calls on the Commission, in view of the widespread legal uncertainty as to the application of the in-house criteria, to develop criteria based on the case-law of the Court of Justice that would establish a stable frame of reference for decision-making by public authorities throughout the Member States;

2.  Calls on the Commission to provide further details of the concept of ‘public authority’, so as to determine which forms of public-public partnership fall within the realm of subsidiarity and are not subject to the rules on public procurement;

3.  Urges the Member States and their local authorities to follow the established case-law of the Court of Justice when setting up institutionalised public-public partnerships;

4.  Calls on the Commission to adopt the criteria of the Court and the objectives established by the Lisbon summit(7) in its assessment of the awarding activity of the active and dynamic welfare state;

5.  Calls on the Commission to enhance its role in assisting the Member States in the transposition of the Public Procurement Directives, in particular with regard to the non-compulsory innovative elements in line with the Court of Justice criteria;

6.  Urges the Member States to increase their capacities to prevent illegal award practices by raising the level of award professionalism and the dissemination of best practices, in particular to local and regional authorities.

PROCEDURE

Title

Specific problems in the Transposition and Implementation of Public Procurement Legislation and its relation to the Lisbon Agenda

Procedure number

2006/2084(INI)

Committee responsible

IMCO

Opinion by
  Date announced in plenary

JURI
6.4.2006

Enhanced cooperation – date announced in plenary

 

Drafts(wo)man
  Date appointed

Alain Lipietz
30.5.2006

Previous drafts(wo)man

 

Discussed in committee

21.12.2006

11.4.2007

11.6.2007

 

 

Date adopted

11.6.2007

Result of final vote

+:

–:

0:

18

0

0

Members present for the final vote

Carlo Casini, Cristian Dumitrescu, Lidia Joanna Geringer de Oedenberg, Klaus-Heiner Lehne, Alain Lipietz, Antonio Masip Hidalgo, Manuel Medina Ortega, Aloyzas Sakalas, Diana Wallis, Rainer Wieland, Jaroslav Zvěřina, Tadeusz Zwiefka

Substitute(s) present for the final vote

Janelly Fourtou, Luis de Grandes Pascual, Kurt Lechner, Michel Rocard, Gabriele Stauner, József Szájer

Substitute(s) under Rule 178(2) present for the final vote

 

Comments (available in one language only)

 

PROCEDURE

Title

Specific problems in the Transposition and Implementation of Public Procurement Legislation and its relation to the Lisbon agenda

Procedure number

2006/2084(INI)

Committee responsible

IMCO

Date authorisation announced in plenary (Rule 45)

6.4.2006

Committee(s) asked for opinion(s)
  Date announced in plenary

JURI
6.4.2007

 

 

 

 

Rapporteur(s)
  Date appointed

Arlene McCarthy

21.2.2006

 

Discussed in committee

10.7.2006

12.4.2007

8.5.2007

4.6.2007

 

Date adopted

5.6.2007

Result of final vote

+:

–:

0:

33

0

0

Members present for the final vote

Daniela Buruiană-Aprodu, Charlotte Cederschiöld, Gabriela Creţu, Mia De Vits, Rosa Díez González, Evelyne Gebhardt, Małgorzata Handzlik, Malcolm Harbour, Edit Herczog, Pierre Jonckheer, Alexander Lambsdorff, Kurt Lechner, Lasse Lehtinen, Toine Manders, Arlene McCarthy, Béatrice Patrie, Zita Pleštinská, Giovanni Rivera, Heide Rühle, Christel Schaldemose, Andreas Schwab, Alexander Stubb, Eva-Britt Svensson, Marianne Thyssen, Horia-Victor Toma, Jacques Toubon, Barbara Weiler

Substitute(s) present for the final vote

Wolfgang Bulfon, André Brie, Manuel Medina Ortega, Diana Wallis

Substitute(s) under Rule 178(2)
present for the final vote

Cristobal Montoro Romero, Paul Rübig

Date tabled

11.6.2007

Comments
(available in one language only)

 

(1)

See paragraph 24

(2)

See paragraph 17

(3)

Case C-107/98 Teckal [1999] ECR I-08121, para. 50; Case C-26/03 Stadt Halle [2005] ECR I-1, para. 49; Case C-458/03 Parking Brixen [2005] ECR I-8612, para. 49.

(4)

Majority of capital, subordination to territorial authority, activity pursued for the most part in that territory.

(5)

And not the minimisation of cost to the local authorities. This is implicit in the ruling of 17 September 2002 in Case C-513/99 Concordia [2002] ECR I-7213.

(6)

Texts Adopted, P6_TA(2006)0462.

(7)

In particular those relating to local employment and the environment.

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