Presentation given by Niels Schuster of the EC at the 7th Regional Public Procurement Conference held in Vlora on 9-10 Sept 2014.

1. New European Union
Policy and Legal Framework for
Public Procurement
Niels Schuster
DG Internal Market and Services
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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.Directive on e-invoiocing in public procurement
6.Government Procurement Agreement (GPA)
7.International Procurement Instrument (IPI)
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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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7. 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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9. Simplification & more flexibility
Increased use of negotiated procedures Reduction of administrative burden Reduced time limits Simplified rules for sub-central authorities Light regime for social, health, cultural and other services e-Procurement
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10. 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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11. 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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12. Strategic procurement III
Life-cycle costs
Costs for the Contracting Authority
Acquisition
Use, Maintenance, End of life
External Costs
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13. 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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14. 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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15. 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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16. 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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17. Utilities Directive
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18. 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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19. 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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20. New Concessions Directive
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21. 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 No closed list of procedures Basic rules for selection and exclusion criteria
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22. 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

23. 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.

24. Directive on e-invoicing in public
procurement
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25. Directive on e-invoicing in public procurement
Key elements:
•Scope: PP invoices only
•Mandates standardisation bodies to draw up a new European e-invoicing standard
•Buyers obliged to accept electronic invoices compliant with the new standard
•Transposition: 1,5 years after standard (possibility to postpone for regional & local for extra 1 year). Standard to be ready in 3 years.

26. Government Procurement
Agreement (GPA)
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27. 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. 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

29. 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
The revised GPA came into force on 6 April 2014!

30. International Procurement
Instrument (IPI)
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31. Objectives
•Increase EU exports in public markets outside the EU;
•Increase the leverage of the EU in international negotiations;
•Ensure a level playing field;
•Strengthen legal certainty regarding access of third countries to EU markets.
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32. Main proposals
1.Possibility for contracting authorities to exclude a tender that is not covered by agreements (Article 6);
2.External Commission investigation into alleged restrictive measures and possibility to adopt proportionate restrictive measures (Article 8-10). State of Play
•Broad support from the European Parliament.
•The amendments of the Parliament are currently under examination in the Council.
22/09/2014
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33. Thank you!
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