EU Commission will overhaul procurement laws

The European Commission has announced a review of public procurement laws. The Commission said change was necessary to cope with new e-procurement practices and to respond to more demand for public-private partnerships.

The Commission said that there was a need for greater flexibility in procurement rules and more speed in processing deals, given that public bodies increasingly wanted to use private investment to fund major projects.

"The Commission is embarking on a comprehensive evaluation of EU procurement legislation," said the Commission's Directorate for Internal Market and Services in its Single Market News publication. "This evaluation, to be completed in spring 2011, will examine the effectiveness of EU rules in promoting open, contestable and sound procurement.

"The findings will be used to inform reflection on the need for a modernisation of EU procurement rules. Any such modernisation will be driven by the objective of enabling contracting authorities to undertake procurement in a timely and effective manner so as to accomplish the public missions entrusted to them," the Commission said. "It could also clarify how contracting authorities can take account of environmental, social or other policy considerations when awarding contracts."

The Commission said that procurement was changing as public authorities relied more heavily on private money or cooperation with one another. The laws governing procurement must change to reflect this, it said.

"In the past 15 years, over €200bn of investment was financed through public-private partnerships," it said. "Cooperation between local authorities is also becoming more commonplace. There is a need to clarify the extent to, and ways in which EU procurement disciplines can usefully apply to these forms of delivering public services and infrastructure."

The Commission also said that the procurement process was being used by some public authorities as a tool for fulfilling other policy objectives, such as a drive to use environmentally friendly products and services.

"Such policies can be implemented in a way that is compatible with sound and objective procurement," the Commission said. "The key is to frame desired procurement outcomes in clear and objective specifications which do not implicitly favour particular suppliers. Too much scope for subjective appreciation or arbitrary decisions could weaken sound procurement disciplines and complicate the task of contracting authorities.

"In response to demands from the European Parliament, the Commission will come forward with comprehensive guidance to help Member States and authorities to use procurement policies to support other societal objectives, such as green procurement and fostering innovation," it said.

The Commission said that it would re-evaluate procurement law in light of the changing nature of public sector procurement. But it also said that any changes should be made carefully in order to protect the principles of fair procurement enshrined in current law.

"Any eventual adjustments should not come at the expense of transparent and contestable procurement markets," it said. "These principles have served us well so far and should remain the cornerstones of EU procurement policy."

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.