1.
Modernisation of EU
Public Procurement Policy
Niels Schuster
DG Internal Market and Services
Association Agreements
DCFTA
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2.
Outline
1. Overview of the Reform
2. Classical Directive
3. Utilities Directive (Water, Energy, Transport, Postal)
4. New Concessions Directive
5. Government Procurement Agreement (GPA)
6. Association Agreements/DCFTA
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3.
Overview of the Reform
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4.
Current Rules
Classical Directive (2004/18/EC)
• Public works, public supplies and public services
Utilities Directive (2004/17/EC)
• Water, energy, transport and postal services sectors
Directive on Defence procurement (2009/81/EC)
Remedies Directives (89/665/EEC and 92/13/EC )
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5.
New Rules: Preparatory works
Greenpaper on modernisation (January 2011)
Evaluation of existing rules
Results of public consultation (June 2011)
 623 replies (Business, public authorities, civil society,
academics & legal experts, citizens…)
Public procurement conference (June 2011)
European Commission proposal (December 2011)
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6.
New Rules: Legislative process
July 2013: political agreement
February 2014: Adoption
Directive – needs to be transposed by EU Member States
2 years for transposition
4.5 years for e-procurement (at the latest)
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Objectives of the reform
1. Simplification
& more flexibility
7. New rules
for Concessions
3. Better access for
Small & Medium
Enterprises (SME)
2. Strategic use
6. Governance
4. Sound
procedures
5. Compliance
with GPA
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8.
Classical Directive
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Simplification & more flexibility I
Increased use of negotiated procedures
Reduction of administrative burden
Reduced time limits
Simplified rules for sub-central authorities
e-Procurement
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Simplification & more flexibility II
Light regime
 New specific simplified rules for social, health, cultural and
other services
• higher threshold – EUR 750 000;
• only requirements: ex-ante (and ex-post) publicity + non-
discrimination principle; for the rest national rules
Other services covered:
• Hotel and restaurant services
• Certain legal services
• Rescue, fire fighting and prison services
• Government services and services to the community
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Strategic procurement I
(1) Strategic policies may be considered in award decision
(2) Technical specifications may refer to production process
(3) Integration of disabled & disadvantaged workers
(4) Innovation Partnership
(5) Use of labels
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Strategic procurement II
Sole Award Criterion:
Most economically advantageous tender (MEAT)
 to be assessed on the basis of
1. price, or
2. cost, using cost-effectiveness approach (e.g. "life cycle"), or
3. the best price-quality ratio using criteria such as
• Production process
• Social & environmental criteria
• Innovative characteristics
NB: Criteria must be linked to the subject matter of the contract !
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Strategic procurement III
Life-cycle costs
Costs for the
Contracting Authority
Acquisition
Use,
Maintenance,
End of life
External Costs
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SME-friendly measures
Division into lots
 "apply or explain" principle;
Proportionate criteria for financial standing
 limited to twice contract value
Reduced documentary requirements
 "European Single Procurement Document"
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15.
Sound procedures I
• Conflicts of interests clarified
• Exclusion grounds strengthened and extended
• Compulsory exclusion in case of abnormally low tender
• Modifications of contracts simplified
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Sound procedures II
Principles of procurement – Horizontal clause
Appropriate measures to ensure that economic operators comply with
applicable obligations in the field of environmental, social and labour law
Referred to under:
 Non award
 Exclusion grounds
 Abnormally low tenders
 Subcontracting
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Sound procedures III
Main changes:
Competitive procedures with negotiation
 Replaces current negotiated procedure with publication
Competitive dialogue
 slightly broader scope for negotiations in the final stages
Innovation partnership
 Research services for the development of an innovative product by
one or more providers plus supply contract
Negotiations without publication
 no substantial changes
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18.
Utilities Directive
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19.
Utilities Directive
• Procurement for services, supplies or works
• By utilities (public or private)
• Utilitiy activity (water, energy, transport, postal)
 Private entities subject to procurement rules if "operating
on the basis of special and exclusive rights"
 More flexible regime for utilities
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Utilities Directive
 Essentially same changes for the Utilities as for the
Classic Directive
Differences
 Framework contracts:
 max 8 years (classic 5 years)
 Contract modifications
 Unforseen circumstances: unlimited (classic: max 50%)
 Definition of special or exclusive rights
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New Concessions Directive
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New Directive on Concessions
 Works & service concessions ≥ € 5 million
 Classical & utilities sector
Not:
 Drinking Water (supply or distribution)
 Exclusive rights
 Lotteries
 Public passenger transport services
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Distinction contracts – concessions
Right to exploit the work or services (sometimes with payment)
 transfer of operating risk
 no guarantee to recoup the investments and costs.
 risk can be limited by regulation, but always real exposure to possible
loss, not merely nominal or negligible
 demand or supply risk or both
Clear delimitation from situations such as licenses, authorizations

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Duration of Concessions
The duration of concessions shall be limited
General principle for concessions lasting more than 5 years:
 Shall not exceed time necessary to recoup investments made for
operating works/services with return on invested capital
 Possibility to take into account investments at beginning and during
life of concession and those necessary to achieve specific contractual
objectives.

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Concessions: few procedural rules
• Publication (ex-ante & ex-post)
• Transparency, equal treatment, non-discrimination
• Procedural guarantees, not defined procedures
• Exclusion (=), selection criteria (light)
• Objective award criteria
• Minimum time-limits

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Government Procurement
Agreement (GPA)
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Government Procurement Agreement
Structure
• Text: General principles
• Annexes: coverage (schedules by parties)
Principle of non-discrimination (subject to coverage)
 National treatment
 Most favoured nation clause
 Treatment of other Parties’ goods, services and suppliers
that is “no less favorable than” that accorded to
domestic/other parties' products, services and suppliers

28.
Procurement rules in the text
• Tendering procedures
• Publication/invitations to participate
• Qualification of suppliers
• Time limits
• Necessary Documentation
• Award criteria

29.
Revised GPA
Revised GPA: more user friendly, closer to EU Directives
• Easier access to procurement - Better use of electronic means
• Improved rights of developing countries to accede
• Rules to avoid conflicts of interest and prevent corrupt practices
• Introduces more flexibility for entities
• Use technical specifications aimed at protection of environment
• Technical specification relate to production process and methods
• Award: lowest price or most advantageous tender

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Revised GPA : Future
Seeking accession:
China, New Zealand, Albania, Georgia, Jordan, the
Kyrgyz Republic, Moldova, Montenegro, Oman,
Panama and Ukraine
WTO commitments to accede:
the Former Yugoslav Republic of Macedonia , Mongolia,
the Russian Federation and Saudi Arabia
Revised GPA : 2/3 Parties rule for entry into force

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Association Agreements
DCFTA
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Main points
(1) Mutual access to public procurement markets
(2) Gradual approximation of legislation with EU
To be accompanied by:
 Enhanced institutional framework
 Roadmap/Strategy
 Cooperation and technical assistance
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Gradual Approximation (Classical Directive)
Basic elements
Definitions, thressholds, principles, procedures, exclusion
grounds, selection and award criteria, publication, information …
Other mandatory elements
(Works) Concessions, design contests…
Non-mandatrory (but recommended)
Competitive Dialogue, FWA, Dynamic Puchasing Systems…
Out of scope
Reporting, statistical information… 33

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Indicative Schedule
Phase Approximation Market access
1 • Institutional framework
• Basic standards
• Roadmap
Central government
authorities (supplies)
2 • Basic elements Classical &
Remedies
State, regional & local
authorities and public law
bodies (supplies)
3 • Basic elements Utilities &
Remedies
All contracting entities
(supplies)
4 • Other elements Classical All contracting authorities
(services & works contracts
and concessions)
5 • Other elements Utilities All contracting entities
(services & works)
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More information
• EU Public Procurement Rules
• http://ec.europa.eu/internal_market/publicprocurement/index_en.htm
• EU-Georgia Association Agreement
• http://eeas.europa.eu/georgia/assoagreement/assoagreement-2013_en.htm
• EU-Moldova Association Agreement
• http://eeas.europa.eu/moldova/assoagreement/assoagreement-2013_en.htm
•
EU-Ukraine Association Agreement
• http://eeas.europa.eu/top_stories/2012/140912_ukraine_en.htm
•
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