New procurement laws on the distant horizon?

By Daradjeet Jagpal, Solicitor, Harper Macleod LLP

The European Commission is considering undertaking a fundamental re-working of public procurement law in the EU with the aim of making processes more transparent, encouraging increased participation from smaller companies, and promoting cross-border procurement.

The Commission’s Green Paper is set against a backdrop of public sector budget cuts and the need for more efficient use of public funds but intends to turn these negatives into positives through using public procurement as a vehicle for job creation and innovation.

The Green Paper focuses particularly on:

• amendment of current procedures to make them simpler and more flexible, such as allowing wider use of negotiated procedures (a direct result of the criticisms levelled at the competitive dialogue procedure) and the exemption of co-operative shared services arrangements between public authorities from the public procurement rules;

• facilitation of cross-border bidding through better access to contract opportunities for all, particularly for the benefit of SMEs;

• amendment of the procurement rules to promote other policy objectives, such as requiring the procurement of innovative goods and services or those that respect certain environmental conditions; and

• reducing corruption and favouritism through greater transparency in the evaluation process.

As it stands, the Green Paper will not result in an all-new EU Procurement Directive just yet. The Commission intends to analyse the consultation responses (once the consultation closes on 18 April) and then discuss them at a high-level conference in June.

In many respects, the Green Paper represents an opportunity for significant and wide-reaching rejuvenation of public procurement law. This could include codification of the key principles contained in the European Court of Justice’s case law on the existing Directives; wider use of negotiated procedures; and reduction of qualification requirements.

However, at the same time, there is the potential for conflict between attaining financial efficiency on the one hand, and promoting energy efficiency and innovation on the other. A delicate balance needs to be struck here.

In addition, an over-simplification of procurement rules may not be as desirable as it may at first seem. Removal of the distinction between Part A and Part B services would result in all types of contracts being subject to the same regime, which could give rise to contracts that are currently partially regulated being fully regulated in future.

It is hoped that the consultation responses will help thrash out some of these issues with a view to giving the Commission some food for thought. But don’t expect a new Directive any time soon. The Commission took almost eight years to develop the current Directives. While we should not blank out our diaries for 2019 just yet, we should look forward to draft proposals within the next couple of years.

Daradjeet is a solicitor at Harper Macleod LLP and can be contacted on: daradjeet.jagpal@harpermacleod.co.uk