Public Procurement

Public Procurement in Europe

EU directives impacting on public procurement

Procurement law is driven by European directives, which are implemented in Member States through national legislation and regulations. The national legislation apply to all public bodies which are largely owned, managed or financed through public funds. This includes government departments and their agencies, non-departmental public bodies, hospitals and health sector purchasers, housing associations, education boards and institutions, various non-government organisations and district councils.

Main European directives:

  • the EU procurement directives,
  • the EU Remedies directive (2007/66/EC) (see below),
  • the EU Energy Labelling directive (2010/30/EU), and
  • the EU Energy Services directive.

Working Party on Public Procurement

The working party is responsible for legislation in the area of public procurement. It discusses proposals on ways to improve the procurement rules and make public procurement transparent for both the institutions tendering contracts and the companies bidding for contracts.

More details about Working Party on Public Procurement

European Union Public Procurement Directives

The EU Procurement Directives have been adopted by the EU Commission and Parliament, and were published in the Official Journal of the EU on 28 March 2014. Member States must implement – or transpose – the agreed text into national law by 18 April 2016. This required, among other jurisdictions, new Scottish Procurement Regulations which will replace the Public Contracts (Scotland) Regulations 2012 and Utilities Contracts (Scotland) Regulations 2012.

The Directives are:

  • EU Procurement Directive (Classic) – on public procurement
  • EU Procurement Directive (Concessions) – on the award of concession contracts
  • EU Procurement Directive (Utilities) – on procurement by entities operating in the water, energy, transport and postal services sectors

European Union procurement directives

In 2014 the European Commission published new public procurement directives with the aim of simplifying the rules and procedures involved in the public procurement process.

There are three new public procurement directives:

  • The Public Procurement Directive (revising Directive 2004/18/EC); listed as Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC
  • The Procurement by Entities Operating in the Water, Energy, Transport and Postal Services Sector Directive (revising Directive 2004/17/EC); listed as Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC
  • The Award of Concession Contracts Directive. These are only partially regulated at European level. Listed as Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts

Included in the new directives are these provisions:

  • allowing contracting authorities to divide large contracts into lots and to limit the number of lots one contractor can win therefore encouraging greater access for small and medium sized local businesses (SMEs)
  • allowing contracting authorities earlier engagement with the market
  • excluding poor performing contractors from tendering for work for a period of time
    increasing the scope to integrate social considerations into public sector contracts and deliver community benefits such a employment and training opportunities
  • simplifying the procurement process, and
  • allowing experience to be taken into account at the contract award stage.

The new directives came into force on 17 April 2014. The UK consequently launched the new Public Contract Regulations on 26 February 2015.

EU procurement thresholds

EU procurement rules set out detailed procedures for the award of contracts with value equal or above certain thresholds by contracting authorities (and certain utility companies). Thresholds are net of VAT.

Public contracts

The European public contracts directive (2014/24/EU) applies to contracting authorities including, amongst others, government departments, local authorities and health Authorities.

For research and development services see Article 14.

Utilities contracts

The European utilities contracts directive (2014/25/EU) applies to certain utility companies operating in the Energy, Water, and Transport sectors.

EU Remedies directive 2007/66/EC

Directive 2007/66/EC requires public authorities to wait a certain number of days, known as a ‘standstill period’, before concluding a public contract. This gives rejected bidders the opportunity to start an effective review procedure at a time when unfair decisions can still be corrected.

If this standstill period has not been respected, the directive requires national courts under certain conditions to set aside a signed contract, by rendering the contract “ineffective”.

EU Procurement Directives & Scottish Regulations

EU Procurement Directives 2004/17/EC and 2004/18/EC set out detailed procedural rules which are based on the principles outlined in the Treaty on the Functioning of the European Union. They are intended to support the single market by harmonising procedures for higher value contracts, ensuring that they are advertised in the Official Journal of the European Union in standard format.

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