20 Jan 2012

EC Proposal on Public Procurement and Concessions Out

This week, the Informal Network for Sustainable Development in Public Procurement met to discuss the Commission’s proposals for an EU directive on public procurement and on concessions issued shortly before Christmas. Both texts are crucial with regard to services provision as they lay down the EU rules for public authorities buying products and services and awarding concession contracts.

The current proposal excludes social, health and education services from EU public procurement and concession rules, unless the contract is above a threshold of €500,000. Contracts for social services above this threshold will be under a specific regime, which imposes only the respect of basic principles of transparency and equal treatment. Apart from this, the proposal successfully integrates some of the Network’s key messages in response to the Green paper on the modernisation of public procurement rules.

Although the proposal does not allow for contracting authorities to give preference to those bidders committing to sustainable development, it does recognise the importance of public procurement for sustainable development and achieving the Europe 2020 Strategy’s strategic goals.

Furthermore, the proposal partially supports the possibility to refer to social aspects linked to the production process in technical specifications as long as they are linked to the subject-matter and are closely related to the specific production or provision of services purchased. In order to better integrate social considerations in public procurement, procurers may also be allowed to include, in the award criteria of the most economically advantageous tender, characteristics related to the working conditions of the persons directly participating in the process of production or provision. Tenders whose low price results from non-compliance with environmental or social law must be rejected.

However, even though the new proposal substitutes the "price only" criteria with a "lowest cost" criteria, this criteria is not referred to as an exemption. It also does not specify whether this criteria should be used on the basis of a cost-effectiveness approach. In addition, the proposal does not provide contracting authorities with tools to implement sustainable development considerations after the awarding of the contract, including contract penalties for failing to deliver on sustainable, environmental or social development objectives indicated in the contract.

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