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EU procurement reform edges closer

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Posted on 23/07/2013 by Wayne Brophy FCILT

Reform of the rules governing EU procurement is a step closer, after draft proposals were given the seal of approval.

The Committee of Permanent Representatives gave the green light to a wide-ranging set of regulations on Wednesday (July 18th) which must now be passed by votes in the European Parliament and Council.

Some of the changes are expected to make contracts more widely available to smaller businesses, such as removal of turnover requirements on bidding parties. Currently, only firms with turnovers which equal three times the contract value or more are eligible to bid for government work, which often means that large firms are at an advantage.

At the same time, much of the draft legislation is likely to cut the bureaucratic burden on departments by streamlining the procurement process. For example, the proposals include the full use of online procurement within 30 months of the directive coming into force, while the plans will also allow contracting authorities to pay the subcontractors working for suppliers directly.

According to Walker Morris, the rules also finally set out a definitive list of criteria that contracting authorities can impose on would-be suppliers. These include suitability to pursue the professional activity, economic and financial standing, technical and professional ability. Prospective contractors would even be able to self-declare that they meet the criteria, though they would have to provide evidence on request. However, authorities will have to limit their requirements only to those which are necessary for the contract in question, making it easier for small businesses to submit their own bids.

When it comes to larger contracts such as those for goods and services of €500,000 (£429,000) or works over €5 million, contracts are expected to be divided into lots unless the authority can explain why they have not done so.

Last month EU member states reached an agreement that will expand their ability to award contracts on the basis of the ‘most economically advantageous tender’, rather than narrowly focusing on financial value. It is expected that this will allow nations to consider issues such as job creation and environmental concerns.

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