Out-Law News 2 min. read
28 Oct 2011, 10:32 am
In a formal statement of its position the European Parliament said that price issues should no longer be the "determining" factor when choosing to award a contract. It suggested that the default position should be the most "economically advantageous" tender, taking into account economic, social and environmental benefits over the entire life-cycle of the project.
It said, though, that the lowest price should remain the deciding factor "in the case of highly standardised goods or services".
An "economic benefit" criterion would be of particular importance for public bodies who procure goods with an impact on consumers' health, and where quality and production methods play an important role, it said.
"Public procurement rules should be flexible enough to ensure that passive consumers, for example in hospitals, care facilities for the elderly, schools and kindergartens, have equal access to healthy, value-for-money food, rather than merely the cheapest available option," the statement said.
The Parliament was stating its position before the European Commission publishes draft laws to update its public procurement directives later this year.
A recent European consultation found that current EU public procurement rules have resulted in greater transparency and competition for advertised contracts. However, different national practices meant the cost of procedures and time taken for the procurement process differed across member states.
The Parliament welcomed the consultation as a "starting point" for the revisions, it said.
"Many stakeholders see public procurement rules as highly complex, leading to costly and burdensome administrative compliance procedures... [We call] on the Commission to propose a significant simplification and consolidation of the rules, while further clarifying them where necessary," the statement said.
It urged the Commission to revise the law to include "clear, simple and flexible rules, reducing the level of detail". The process should be more open to small and medium sized businesses, which currently only win 31%-38% of public procurement contracts by value, it said.
"In this deep crisis we need clear, simple rules. Only in this way can public authorities give a fillip to innovation and growth," said Heide Ruhle, who drafted the statement outlining Parliament's position.
MEPs propose to divide public contracts into 'lots' that will give smaller businesses a better chance of bidding. They also suggest removing administrative barriers to procurement bids, for example by allowing self-declarations of compliance with EU rules and setting up an EU-wide 'electronic procurement passport' that can be issued to eligible firms, proving that the bidder fulfils legal requirements.
Plans to award contracts to those bidders who offer the most benefits, rather than the cheapest price, echo those in a recent Private Members' Bill put forward in the UK Parliament by Conservative MP Chris White.
His plans would require local authorities to consider how they might "promote or improve the economic, social or environmental well-being of the relevant area" when awarding a contract.
