Category Archives: Public Procurement

The purchase of goods and services and the ordering of works by a public authority such as a national government, a local authority or their dependent bodies, are public contracts. Opening up these contracts, which account for a large proportion of the GDP of the EU, has allowed an increase in competition between the enterprises of the European Union, reducing prices and guaranteeing better quality of services for citizens. Over the years, the EU has introduced legislative provisions which modernise and facilitate the award of contract process. It has increased transparency, fairness and interoperability in this respect through tools such as the TED (Tenders Electronic Daily) database, the single classification system (evidenced by the common vocabulary for the public contracts) and the System of Information on Public Procurement (SIMAP). It has also signed the multilateral Agreement on Government Procurement (AGP) and negotiated an international award procedure within the World Trade Organisation (WTO).

Internal Market

Internal Market

Internal Market Contents

  • Internal market: general framework
  • Living and working in the internal market: Free movement of people, asylum and immigration, free movement of workers
  • Single Market for Goods: Free movement of goods, technical harmonisation, product labelling and packaging, consumer safety, pharmaceutical and cosmetic products, chemical products, motor vehicles, construction, external dimension
  • Single market for services: Free movement of services, professional occupations, services of general interest, transport, Information Society, postal services, financial services, banks, insurance, securities markets
  • Single market for capital: Free movement of capital, economic and monetary union, economic and private stakeholders, fiscal aspects, combating fraud, external relations
  • Businesses in the internal market: Company law, public procurement, intellectual property

See also

Living and working in the internal market.
Overviews of European Union: Internal market.
Further information: the Internal Market and Services Directorate-General of the European Commission.

EGovernment

eGovernment

Outline of the Community (European Union) legislation about eGovernment

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Information society > Digital Strategy i2010 Strategy eEurope Action Plan Digital Strategy Programmes

eGovernment

eEurope 2005 To harness the full potential of eGovernment, it is necessary to identify the obstacles which are slowing down the rate at which on-line public services are being made available in the Member States and to propose action to speed up the deployment of eGovernment. This is the objective of the Commission Communication described below.

Communication of 26 September 2003 from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions “The Role of eGovernment for Europe’s future” [COM(2003) 567 final – Not published in the Official Journal].

Summary

“eGovernment” * means the use of information and communication technologies * (ICT) in public administrations combined with organisational changes and new skills. The objective is to improve public services, democratic processes and public policies.

STATE OF PLAY

Progress has been made in every Member State in bringing public services online, with average online availability growing from 45% to 65% between October 2001 and October 2002.

In terms of services to citizens, eGovernment has already shown the advantages which it can bring in citizens’ everyday lives. It not only makes it easier to obtain information from public administrations but also greatly facilitates formalities for members of the public and cuts waiting times. Beyond that, eGovernment fosters direct communication between citizens and policy-makers. Through online forums, virtual discussion rooms and electronic voting, citizens can directly question decision-makers and express their views on public policy. Today public internet access points * are gradually becoming the norm for services to citizens.

As regards services to businesses, provision of higher quality electronic services by public administrations leads to increased productivity and competitiveness, by reducing the cost of the public service itself as well as transaction costs to businesses (time and effort). For example, electronic customs and VAT handling and electronic tax declarations offer the advantage of speeding up procedures at the same time as improving quality of service. The sophistication of online services, in terms of supporting interactivity and transactions, has advanced more in the business sector than in services to citizens.

In the case of services between administrations, eGovernment can provide ways to strengthen cooperation between national, regional and local government and Community institutions. Regional and local administrations are often at the forefront of the delivery of on-line public services. Development of eGovernment at regional and local level has also become a priority of the Structural Funds, representing about 30% of Information Society expenditure in Objective 1 regions and 20% in Objective 2 regions.

OBSTACLES TO GENERAL AVAILABILITY OF eGOVERNMENT: PRIORITY ISSUES

The Commission has identified a number of priority issues which have to be addressed in order to remove the obstacles to general availability of eGovernment.

Inclusive access

Access for all to online public services is a sine qua non for wide use of eGovernment. This point is all the more important considering the very real risk of a “digital divide” – due to unequal access to information and computer technologies. In this context, education and training are essential to acquire the digital literacy necessary in order to reap the full benefit of the services offered by eGovernment. Digital literacy is one of the priorities of the eLearning programme. Greater access to services also implies stepping up the multi-platform approach (allowing access to services through a range of devices, from PCs and digital TV to mobile terminals or public internet access points).

User confidence

Public services can be offered on line only in an environment guaranteeing fully secure access for citizens. With this in view, maximum protection of personal data and security of digital transactions and communications are primary issues. To this end, the use of privacy enhancing technologies in eGovernment should be promoted, inter alia through the relevant Community programmes. More generally, network and information security, the fight against cybercrime and dependability are prerequisites for a properly-functioning Information Society and, consequently, are core policy issues within the European Union.

Public procurement

Public procurement is one area where use of ICT can be particularly advantageous. Traditional public procurement operations are complex, time-consuming and resource-intensive. Use of ICT in public procurement can therefore improve efficiency, quality and value for money in public purchases. Until now the absence of clear Community rules has been an obstacle to the take-up of electronic public procurement in Europe. The adoption of the new package of legislation on public procurement, which includes specific rules on electronic public procurement, should be a turning point for the spread of electronic public procurement in Europe.

Pan-European services

Pan-European services are important means of supporting mobility in the internal market and European citizenship. Various types of pan-European service are already in place. Examples include EURES, the European employment services portal, and PLOTEUS the portal on learning opportunities in Europe. However, the provision of common pan-European services can be a sensitive issue. For example, when services have been developed from the Member State’s national perspective and tradition (e.g. language) alone, access to them for citizens and enterprises from other Member States may be difficult. It is therefore important to make sure that pan-European services take account of the needs of citizens from other Member States and also to establish true cooperation between Member States’ administrations and interoperable infrastructure.

Interoperability

Interoperability means the capacity to inter-link systems, information and ways of working. This kind of interoperability of information systems allows integrated provision of services in a one-stop portal *, no matter how many different administrative systems or bodies are involved. But interoperability is not just a question of linking up computer networks: it also concerns organisational issues, such as interworking with partner organisations which may well have different internal organisation and operating methods. Introduction of pan-European eGovernment services will also inevitably require agreements on common standards and specifications. Most Member States are already addressing this challenge by adopting national “eGovernment interoperability frameworks”, which are being complemented at European level by the development of the European interoperability framework.

Roadmap

The Commission regards the priorities set out above as the roadmap for eGovernment. However, these measures must be backed up by more horizontal action.

HORIZONTAL ACTION

Reinforcing exchanges of good practice

Best practices encompass technological, organisational and training components. They require a long-term commitment on the part of all key players involved. Exchanges of experience and replication of best practices can bring significant cost-savings in moving to broad take-up. They also prepare the ground for future interoperability and interworking between administrations.

Leveraging investment

A range of Community initiatives and programmes are addressing eGovernment. In particular, these include parts of the Sixth Framework RTD Programme, the eTEN and IDA programmes and investment in regional priorities through the Structural Funds. The Commission reports that investment is low compared to the total investment that should be made at European Union level.

Annual spending on ICT in public administration is about EUR 30 billion, of which a growing proportion, currently some EUR 5 billion, is related to eGovernment. The Commission adds that this spending should be accompanied by much larger investment in organisation and human resources. As a result, the total investment needed is likely to run into tens of billions of euros each year. Community support should therefore aim at achieving maximum leverage for the much larger investment at Member State level.

Key terms used in the Act
  • eGovernment: eGovernment seeks to use information and communications technologies to improve the quality and accessibility of public services. It can reduce costs for businesses and administrations alike, and facilitate transactions between administrators and citizens. It also helps to make the public sector more open and transparent and governments more understandable and accountable to citizens.
  • Information and communication technologies (ICT): the term ITC covers a wide range of services, applications, technologies, devices and software, i.e. tools such as telephony and the Internet, distance learning, television, computers, and the networks and software needed to use these technologies, which are revolutionising social, cultural and economic structures by creating new attitudes towards information, knowledge, working life, etc.
  • One-stop portal: a single entry point to the Internet for a specific topic which can be used without any knowledge of how the administrative departments involved in providing the public service are organised.

Related Acts

Communication from the Commission, of 25 April 2006, “i2010 eGovernment Action Plan: Accelerating eGovernment in Europe for the Benefit of All” [COM(2006) 173 final – Not published in the Official Journal].
This Action Plan, adopted in 2006, is designed to make public services more modern and efficient and to target the needs of the population more precisely. It proposes a series of priorities and a roadmap to speed up the deployment of eGovernment in Europe. Five priority areas are identified:

  • Access for all;
  • Increased efficiency;
  • High-impact eGovernment services;
  • Putting key enablers in place;
  • Increased participation in democratic decision-making.

Independent Report of 27 June 2005: “eGovernment in the Member States of the European Union” (GOPA-Cartermill).

The report is a compilation of the factsheets produced by the eGovernment Observatory. These factsheets provide a picture of the situation and progress of eGovernment in each Member State.

Fifth annual study of e-Government

According to a 2005 survey carried out for the Commission, more than 90% of public service providers now have a website, and 40% of basic public services are totally interactive. The survey highlights the considerable progress made in developing and providing on-line public services throughout the EU. The gap between the new Member States and the EU-15 States in terms of service provision has narrowed significantly, and could close very quickly. The challenge now is to ensure that on-line public services are used as widely and as often as possible so as to simplify the administrative procedures for businesses and citizens alike.

Fourth annual study of e-Government

According to the results of an extensive survey published in January 2004 [PDF ], public administrations which combine the use of ICT to deliver new services with reorganisation of the way they work obtain higher approval ratings from businesses and citizens.
This large-scale survey, funded as part of the evaluation of the eEurope action plan, was conducted in every EU Member State, looking at a common list of 20 basic public services which should be available on line under the action plan. The survey included 29 in-depth case studies of “best practice”, for example substantial savings in enrolment in higher education in Finland and the United Kingdom.

The Commission concluded that the better results are due to the fact that reorganisation plus use of ICT in public administrations reduces costs, increases productivity and provides flexibility and simpler organisational structures. The practical results for the public and for businesses are fewer visits to administrations, together with faster, cheaper, more accessible and more efficient services, but also fewer errors, easier to use systems and greater user control.


Another Normative about eGovernment

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic

Internal market > Businesses in the internal market > Public procurement

eGovernment

eEurope 2005 To harness the full potential of eGovernment, it is necessary to identify the obstacles which are slowing down the rate at which on-line public services are being made available in the Member States and to propose action to speed up the deployment of eGovernment. This is the objective of the Commission Communication described below.

Communication of 26 September 2003 from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions “The Role of eGovernment for Europe’s future” [COM(2003) 567 final – Not published in the Official Journal].

Summary

“eGovernment” * means the use of information and communication technologies * (ICT) in public administrations combined with organisational changes and new skills. The objective is to improve public services, democratic processes and public policies.

STATE OF PLAY

Progress has been made in every Member State in bringing public services online, with average online availability growing from 45% to 65% between October 2001 and October 2002.

In terms of services to citizens, eGovernment has already shown the advantages which it can bring in citizens’ everyday lives. It not only makes it easier to obtain information from public administrations but also greatly facilitates formalities for members of the public and cuts waiting times. Beyond that, eGovernment fosters direct communication between citizens and policy-makers. Through online forums, virtual discussion rooms and electronic voting, citizens can directly question decision-makers and express their views on public policy. Today public internet access points * are gradually becoming the norm for services to citizens.

As regards services to businesses, provision of higher quality electronic services by public administrations leads to increased productivity and competitiveness, by reducing the cost of the public service itself as well as transaction costs to businesses (time and effort). For example, electronic customs and VAT handling and electronic tax declarations offer the advantage of speeding up procedures at the same time as improving quality of service. The sophistication of online services, in terms of supporting interactivity and transactions, has advanced more in the business sector than in services to citizens.

In the case of services between administrations, eGovernment can provide ways to strengthen cooperation between national, regional and local government and Community institutions. Regional and local administrations are often at the forefront of the delivery of on-line public services. Development of eGovernment at regional and local level has also become a priority of the Structural Funds, representing about 30% of Information Society expenditure in Objective 1 regions and 20% in Objective 2 regions.

OBSTACLES TO GENERAL AVAILABILITY OF eGOVERNMENT: PRIORITY ISSUES

The Commission has identified a number of priority issues which have to be addressed in order to remove the obstacles to general availability of eGovernment.

Inclusive access

Access for all to online public services is a sine qua non for wide use of eGovernment. This point is all the more important considering the very real risk of a “digital divide” – due to unequal access to information and computer technologies. In this context, education and training are essential to acquire the digital literacy necessary in order to reap the full benefit of the services offered by eGovernment. Digital literacy is one of the priorities of the eLearning programme. Greater access to services also implies stepping up the multi-platform approach (allowing access to services through a range of devices, from PCs and digital TV to mobile terminals or public internet access points).

User confidence

Public services can be offered on line only in an environment guaranteeing fully secure access for citizens. With this in view, maximum protection of personal data and security of digital transactions and communications are primary issues. To this end, the use of privacy enhancing technologies in eGovernment should be promoted, inter alia through the relevant Community programmes. More generally, network and information security, the fight against cybercrime and dependability are prerequisites for a properly-functioning Information Society and, consequently, are core policy issues within the European Union.

Public procurement

Public procurement is one area where use of ICT can be particularly advantageous. Traditional public procurement operations are complex, time-consuming and resource-intensive. Use of ICT in public procurement can therefore improve efficiency, quality and value for money in public purchases. Until now the absence of clear Community rules has been an obstacle to the take-up of electronic public procurement in Europe. The adoption of the new package of legislation on public procurement, which includes specific rules on electronic public procurement, should be a turning point for the spread of electronic public procurement in Europe.

Pan-European services

Pan-European services are important means of supporting mobility in the internal market and European citizenship. Various types of pan-European service are already in place. Examples include EURES, the European employment services portal, and PLOTEUS the portal on learning opportunities in Europe. However, the provision of common pan-European services can be a sensitive issue. For example, when services have been developed from the Member State’s national perspective and tradition (e.g. language) alone, access to them for citizens and enterprises from other Member States may be difficult. It is therefore important to make sure that pan-European services take account of the needs of citizens from other Member States and also to establish true cooperation between Member States’ administrations and interoperable infrastructure.

Interoperability

Interoperability means the capacity to inter-link systems, information and ways of working. This kind of interoperability of information systems allows integrated provision of services in a one-stop portal *, no matter how many different administrative systems or bodies are involved. But interoperability is not just a question of linking up computer networks: it also concerns organisational issues, such as interworking with partner organisations which may well have different internal organisation and operating methods. Introduction of pan-European eGovernment services will also inevitably require agreements on common standards and specifications. Most Member States are already addressing this challenge by adopting national “eGovernment interoperability frameworks”, which are being complemented at European level by the development of the European interoperability framework.

Roadmap

The Commission regards the priorities set out above as the roadmap for eGovernment. However, these measures must be backed up by more horizontal action.

HORIZONTAL ACTION

Reinforcing exchanges of good practice

Best practices encompass technological, organisational and training components. They require a long-term commitment on the part of all key players involved. Exchanges of experience and replication of best practices can bring significant cost-savings in moving to broad take-up. They also prepare the ground for future interoperability and interworking between administrations.

Leveraging investment

A range of Community initiatives and programmes are addressing eGovernment. In particular, these include parts of the Sixth Framework RTD Programme, the eTEN and IDA programmes and investment in regional priorities through the Structural Funds. The Commission reports that investment is low compared to the total investment that should be made at European Union level.

Annual spending on ICT in public administration is about EUR 30 billion, of which a growing proportion, currently some EUR 5 billion, is related to eGovernment. The Commission adds that this spending should be accompanied by much larger investment in organisation and human resources. As a result, the total investment needed is likely to run into tens of billions of euros each year. Community support should therefore aim at achieving maximum leverage for the much larger investment at Member State level.

Key terms used in the Act
  • eGovernment: eGovernment seeks to use information and communications technologies to improve the quality and accessibility of public services. It can reduce costs for businesses and administrations alike, and facilitate transactions between administrators and citizens. It also helps to make the public sector more open and transparent and governments more understandable and accountable to citizens.
  • Information and communication technologies (ICT): the term ITC covers a wide range of services, applications, technologies, devices and software, i.e. tools such as telephony and the Internet, distance learning, television, computers, and the networks and software needed to use these technologies, which are revolutionising social, cultural and economic structures by creating new attitudes towards information, knowledge, working life, etc.
  • One-stop portal: a single entry point to the Internet for a specific topic which can be used without any knowledge of how the administrative departments involved in providing the public service are organised.

Related Acts

Communication from the Commission, of 25 April 2006, “i2010 eGovernment Action Plan: Accelerating eGovernment in Europe for the Benefit of All” [COM(2006) 173 final – Not published in the Official Journal].
This Action Plan, adopted in 2006, is designed to make public services more modern and efficient and to target the needs of the population more precisely. It proposes a series of priorities and a roadmap to speed up the deployment of eGovernment in Europe. Five priority areas are identified:

  • Access for all;
  • Increased efficiency;
  • High-impact eGovernment services;
  • Putting key enablers in place;
  • Increased participation in democratic decision-making.

Independent Report of 27 June 2005: “eGovernment in the Member States of the European Union” (GOPA-Cartermill).

The report is a compilation of the factsheets produced by the eGovernment Observatory. These factsheets provide a picture of the situation and progress of eGovernment in each Member State.

Fifth annual study of e-Government

According to a 2005 survey carried out for the Commission, more than 90% of public service providers now have a website, and 40% of basic public services are totally interactive. The survey highlights the considerable progress made in developing and providing on-line public services throughout the EU. The gap between the new Member States and the EU-15 States in terms of service provision has narrowed significantly, and could close very quickly. The challenge now is to ensure that on-line public services are used as widely and as often as possible so as to simplify the administrative procedures for businesses and citizens alike.

Fourth annual study of e-Government

According to the results of an extensive survey published in January 2004 [PDF ], public administrations which combine the use of ICT to deliver new services with reorganisation of the way they work obtain higher approval ratings from businesses and citizens.
This large-scale survey, funded as part of the evaluation of the eEurope action plan, was conducted in every EU Member State, looking at a common list of 20 basic public services which should be available on line under the action plan. The survey included 29 in-depth case studies of “best practice”, for example substantial savings in enrolment in higher education in Finland and the United Kingdom.

The Commission concluded that the better results are due to the fact that reorganisation plus use of ICT in public administrations reduces costs, increases productivity and provides flexibility and simpler organisational structures. The practical results for the public and for businesses are fewer visits to administrations, together with faster, cheaper, more accessible and more efficient services, but also fewer errors, easier to use systems and greater user control.

Defence procurement exemptions

Defence procurement exemptions

Outline of the Community (European Union) legislation about Defence procurement exemptions

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Defence procurement exemptions

Document or Iniciative

Commission interpretative communication of 7 December 2006 on the application of Article 296 of the Treaty in the field of defence procurement [COM(2006) 779 final – Not published in the Official Journal].

Summary

Internal market rules do not apply to defence acquisitions for trade in arms, munitions and war material; the legal basis for this exemption is Article 296. The scope of this exemption is, however, limited by the concept of “essential security interests” and by the list of military equipment mentioned in Article 296(2).

Any exemption authorised by Article 296 goes to the very heart of the fundamental principles and objectives of the internal market. Such exceptions should therefore be strictly confined to cases where Member States have no other choice than to protect their security interests nationally.

The list of military equipment mentioned in Article 296 was adapted in 1958 by Council Decision 255 / 58. The nature of the products on the 1958 list and the explicit reference in Article 296 to “specifically military purposes” confirm that only the procurement of equipment which is designed, developed and produced for specifically military purposes can be exempted from Community rules (Article 296(1)(b) EC).

Nevertheless, Article 296 can also cover the procurement of dual-use equipment for both military and non-military purposes, but only if the application of Community rules would oblige a Member State to disclose information prejudicial to its essential security interests (Article 296(1)(a)).

Military items included in the 1958 list are not automatically exempted from internal market rules. Any Member State seeking exemption under Article 296 must demonstrate that the exemption in question is necessary for the protection of its essential security interests, this being the only objective which may justify such an exemption. General references to the country’s geographical and political situation, history and alliance commitments are not sufficient.

The concept of essential security interests gives Member States flexibility in the choice of measures to protect those interests. It is essential for contracting authorities to assess each procurement contract with great care.

As guardian of the Treaty, the Commission may verify – with due regard to the sensitive nature of the defence sector – whether the conditions for exempting procurement contracts on the basis of Article 296 are fulfilled.

The Commission may also bring the matter directly before the Court of Justice if it considers that a Member State is making improper use of the powers provided for in Article 296.

Background

The majority of defence contracts are exempted from internal market rules and awarded on the basis of widely differing national procurement rules. With a view to the establishment of a European defence equipment market, the 2004 Green Paper on Defence Procurement (link) launches a debate on how to improve transparency and openness of defence markets between EU Member States. In December 2005 the Commission announced two separate initiatives (link to COM(2005) 626 final): the adoption of an “Interpretative Communication on the application of Article 296 EC” (analysed above) and the preparation of a possible new directive on the procurement of defence equipment to which Article 296 exemptions do not apply.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

 

Rules applicable to Institutionalised Public-Private Partnerships

Rules applicable to Institutionalised Public-Private Partnerships

Outline of the Community (European Union) legislation about Rules applicable to Institutionalised Public-Private Partnerships

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Rules applicable to Institutionalised Public-Private Partnerships (IPPP)

Document or Iniciative

Commission interpretative communication on the application of Community law on Public Procurement and Concessions to institutionalised PPP (IPPP) [2008/C 91/02 – Official Journal C 91 of 12.4.2008].

Summary

This communication details how Community provisions on public procurement and concessions in the case of institutionalised public-private partnerships (IPPP) * are to be applied. The aim is to enhance legal certainty and to assuage concerns regarding the participation of private partners in IPPP.

Creating an IPPP

An IPPP is generally set up through:

  • the creation of a new entity in which the capital is held jointly by the contracting entity and the private partner and which is assigned public procurement or concessions; or
  • the participation of a private entity in an existing company which has obtained public contracts or concessions in the past.

The contracting entity * must comply with the Community’s legal provisions on public procurement and concessions and in particular follow a fair and transparent procedure, either when selecting the private partner for the IPPP or when granting a public contract or a concession to the public-private entity.

A double tendering procedure (one for selecting the private partner to the IPPP and another one for awarding public contracts or concessions to the public-private entity) is not considered practical. However, one possible way of avoiding a double tendering procedure is by selecting a private partner for the IPPP by means of a transparent and competitive procedure, the subject of which is both the public contract and concession attributed to the IPPP and the partner’s operational contribution to the IPPP.

Applicable Regulation

There are no specific rules governing the creation of an IPPP in Community law. However, the principles of fair treatment and the prohibition of discrimination on grounds of nationality derived from Article 43 of the Treaty establishing the European Community (EC Treaty) on freedom of establishment and from Article 49 EC on the freedom to provide services apply to the fields of public procurement and concessions.

Rules applicable to the selection process of a private partner are different depending on whether or not the public procurement or the concession is covered by the so-called “traditional” Directive (2004/18/CE: on public works contracts, public supply contracts and public service contracts) and/or the Directive on “special sectors” (2004/17/CE on public procurement in the water, energy, transport and postal services sectors).

  • If the public-private entity’s task is to carry out a public contract fully covered by the Public Procurement Directives, the procedure for selecting the private partner is determined by these same Directives.
  • If it relates to a public procurement or concession partially covered by these Directives, the rules derived from the EC Treaty apply in addition to the relevant provisions of these Directives.
  • In the case of a public procurement or a concession not being covered by the Directives, the selection of the private partner must comply with the principles of the EC Treaty.

The contracting entity must publicise the selection and award criteria for identifying the private partner for the IPPP. The criteria used must comply with the principle of equal treatment. The Public Procurement Directives specify requirements related to the personal capacity of the private partner, such as the personal situation of the candidate, his economic and financial standing, his technical ability, etc. Such criteria may also be used in the context of concessions and public contracts not fully covered by the Public Procurement Directives.

The principles of equal treatment and non-discrimination imply an obligation of transparency which consists in ensuring for any potential tenderer a degree of advertising sufficient to enable the market to be opened up to competition. In the context of an IPPP, the contracting entity should include in the contract notice or the contract documents basic information on the following: the public contracts and/or concessions which are to be awarded, the statutes and articles of association, the shareholder agreement and all other elements governing the contractual relationship between the contracting entity and the public-private entity before being created.

Subsequent modifications

The principle of transparency also requires the disclosure in the tender documents of optional renewals or modifications of the public contract or concessions, as well as the disclosure of optional assignments of additional tasks. The information provided should be sufficiently detailed, in order to ensure fair and effective competition.

The IPPP must remain within the scope of its initial activity and cannot obtain any further public contracts or concessions without a procurement procedure. However, the IPPP must be able to adjust to changes in the economic, legal or technical environment. An adjustment is possible on the condition that it complies with the principles of equal treatment and transparency. Any changes to the essential terms of a contract, not provided for in the initial tender documents, require a new procurement procedure.

Context

The public consultation undertaken at the time of the publication of the Green Paper on Public-Private Partnerships and Community law on public contracts and concessions showed the need for clarification on the Community’s legal provisions applicable to institutionalised public-private partnerships (IPPP). In effect, the perceived lack of legal certainty could undermine the success of such projects and dissuade public authorities and private entities from creating an IPPP.

Key terms of the Act

  • Institutionalised Public-Private Partnerships (IPPP): co-operation between public and private parties involving the establishment of a mixed capital entity which performs public contracts or concessions. The private input to the IPPP consists, apart from the contribution of capital or other assets, in the active participation in the operation of the contracts awarded to the public-private entity and/or the management of the public-private entity. Simple capital injections made by private investors into publicly owned companies do not constitute IPPP.
  • Contracting entity: the State, public services, bodies governed by public law and associations formed by one or more of these services or one or more of these bodies governed by public law.

Green public procurement

Green public procurement

Outline of the Community (European Union) legislation about Green public procurement

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Green public procurement

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 July 2008 on Public procurement for a better environment [COM(2008) 400 final – Not published in the Official Journal].

Summary

The objective of this Communication is to provide guidance on how to reduce the environmental impact caused by public sector consumption and how to use Green Public Procurement (GPP) * to stimulate innovation in environmental technologies, products and services.

More specifically, the Communication proposes instruments which should enable the main obstacles to increased take-up of green public procurement to be removed. The Commission recommends the following:

  • setting common green public procurement criteria;
  • encouraging publication of information on life cycle costing of products;
  • increasing certainty about legal possibilities to include environmental criteria in tender documents;
  • establishing political support for the promotion and implementation of green public procurement through a political target linked to indicators and future monitoring.

Scope

This Communication covers all public procurement procedures, both above and below the thresholds defined by European public procurement Directives. The Commission has identified ten priority sectors for GPP:

  • construction;
  • food and catering services;
  • transport;
  • energy;
  • office machinery and computers;
  • clothing and other textiles;
  • paper and printing services;
  • furniture;
  • cleaning products and services;
  • equipment used in the health sector.

Common GPP criteria

The Commission highlights the need to define common green public procurement criteria. A preliminary set of criteria for products and services in the ten priority sectors has been established in the framework of a “Training Toolkit” (EN). The criteria have been based on criteria used in the granting of the European Eco-label, in particular, or, in the absence of a European label, national ecolabels and are the result of cooperation between the Commission and a group of experts made up of representatives from Member States.

GPP criteria are divided into two categories:

  • the “core” criteria are designed to allow easyapplication of green public procurement and are focused on the key area(s) of environmental performance of a product. They are aimed at keeping administrative costs to a minimum for companies who have to comply with the criteria and public authorities who have to enforce compliance with them. The Commission proposes that by 2010, 50% of all public procurement should comply with these criteria;
  • the “comprehensive” criteria take into account more aspects or are based on higher levels of environmental performance, for use by authorities that want to go further in supporting environmental goals.

Assessment and monitoring

In order to monitor green public procurement, the Commission proposes to establish two types of indicators: quantitative indicators to assess the progress of the policy and its impact on the supply side, and impact-oriented indicators allowing assessment of the environmental and financial gains made. In 2010, the Commission will evaluate the situation and produce a review which will serve as the basis for setting future targets.

Context

The potential for green public procurement was first highlighted in the European Union in 2003 in the Commission Communication on integrated product policy. In 2004, Directives 2004/17/EC and 2004/18/EC, which constitute the European framework for the procurement of public contracts, clarified how purchasers can integrate an environmental dimension into the tendering process. The Commission handbook “Buying green!”, adopted in August 2004, aims to further clarify how these new rules can be used to conclude green public contracts.

The new European Union strategy for sustainable development, adopted by the Council in June 2006, set a target that by 2010 the average level of green public procurement in the EU should be the same as the 2006 level of the best performing Member States in this area.

This Communication is part of the Action Plan for Sustainable Consumption and Production and the Sustainable Industrial Policy (SCP/SIP), which establishes a framework for the implementation of instruments aimed at improving the environmental performances of products.


Key terms of the Act

  • Green public procurement: a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.

Public procurement in the fields of defence and security

Public procurement in the fields of defence and security

Outline of the Community (European Union) legislation about Public procurement in the fields of defence and security

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Public procurement in the fields of defence and security

Document or Iniciative

Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC (Text with EEA relevance). [See amending act(s)].

Summary

This Directive applies to public contracts in the fields of defence and security for:

  • the supply of military equipment;
  • the supply of sensitive equipment;
  • works, supplies and services directly related to military or sensitive equipment;
  • works and services for specifically military purposes or sensitive works and sensitive services.

Public procurement

Economic operators, whether they are natural or legal persons, can participate in invitations to tender in these fields. Groups of economic operators may also participate. If a contract is awarded to them, they may be required to assume a specific legal form.

Market thresholds and exclusions

This Directive shall apply to contracts which have a value excluding value-added tax (VAT) estimated to be no less than the following thresholds:

  • EUR 400,000 for supply and service contracts;
  • EUR 5,000,000 in the case of works contracts.

Exclusions

Certain specific contracts are excluded from the scope of this Directive, including:

  • contracts governed by specific procedural rules pursuant to an international agreement or arrangement between Member States and third countries and markets governed by the specific procedural rules of an international organisation purchasing for its purposes;
  • contracts for which the application of the rules of this Directive would oblige a Member State to supply certain information the disclosure of which it considers contrary to the essential interests of its security;
  • contracts awarded in the framework of a cooperation programme aimed at developing a new system;
  • contracts for the purposes of intelligence activities;
  • contracts awarded in a third country when forces are deployed outside the territory of the Union and transactions take place in the area of operations;
  • contracts relating to immovable property;
  • contracts awarded between governments.

Procedures

Contracting authorities/entities shall apply national procedures for the award of public contracts adjusted for the purposes of this Directive, by using the restricted procedure or the negotiated procedure with publication of a contract notice. An open procedure cannot be chosen.

Member States may use a competitive dialogue in the case of particularly complex contracts. In this case, contracting authorities/entities open a dialogue with the candidates selected in order to identify and define the means best suited to satisfying their needs.

There are also exceptional cases in which it is possible to use the negotiated procedure without publication of a contract notice.

The procedures are adjusted for the specific purposes of this Directive, in particular by proposing specific rules for the security of information, the security of supply and subcontracting.

The contracting authorities/entities may also conclude framework agreements, the duration of which may not exceed seven years. They must not, however, restrict competition.

Rules on advertising and transparency

Contracting authorities/entities may publish a prior information notice on their buyer profiles or on Tenders Electronic Daily (TED). They are obliged to publish a contract notice on TED with the sole exception of an exceptional negotiated procedure without publication of a contract notice.

In the case of restricted or negotiated procedures, contracting authorities/entities shall invite the selected candidates to submit their tenders and to negotiate. They shall also be invited to negotiate under the negotiated procedure. This invitation shall include contract documents, the deadline for receipt of tenders and an indication of any documents to be annexed.

For every contract or framework agreement, the contracting authorities/entities must draw up a written report describing the selection procedure chosen as well as information concerning the candidates.

Contract award criteria

Contracting authorities/entities shall award contracts on the basis of:

  • the most economically advantageous tender. Award shall then be based on various criteria linked to the subject-matter of the contract in question, such as quality, price or technical merit); or
  • the lowest price.

Subcontracting

Contracting authorities/entities may oblige the successful tenderer to organise a transparent and non-discriminatory competition when awarding subcontracts to third parties.

In addition, Member States may allow or require their contracting authorities/entities to ask that subcontracts representing at least a certain share of the value of the contract (a maximum of 30 %) be awarded to third parties following a transparent and non-discriminatory competition.

Review

A review of a decision taken by contracting authorities/entities may be sought in the event of an infringement of Community law. Member States must ensure that any operator that has suffered harm has access to effective and rapid rights to review. They may require that operators who wish to seek review either inform the contracting authority or first seek review from it.

During a review procedure, interim or final measures may be taken. In both cases, damages shall be granted to the persons concerned.

Context

The 2005 Green Paper on defence procurement highlighted the fact that it was essential to create a European market for defence equipment. This Directive should prove to be an appropriate legislative framework since it meets the specific requirements relating to goods and services in the fields of defence and security.

Reference

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2009/81/EC

21.8.2009

21.8.2011

OJ L216, 20.8.2009

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1177/2009

1.1.2010

OJ L 314, 1.12.2009

Regulation (EU) No 1251/2011

2.12.2011

OJ L 319, 2.12.2011

Successive amendments and corrections to Directive 2009/81/EC have been incorporated into the original text. This consolidated version is for reference only.

A strategy for e-procurement

A strategy for e-procurement

Outline of the Community (European Union) legislation about A strategy for e-procurement

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

A strategy for e-procurement

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European and Social Committee and the Committee of the Regions [COM(2012) 179 final – Not published in the Official Journal].

Summary

This Communication defines the guidelines for a strategy for e-procurement.

What are the advantages of e-procurement?

Electronic processes offer several economic advantages. They can simplify the way procurement is conducted, reduce waste (in goods, services and works), and deliver a better quality service at a lower price. They can also make life significantly simpler for small and medium-sized enterprises (SMEs) by increasing the transparency of invitations to tender, by facilitating access and by reducing the costs of bidding for contracts (postage and printing costs, etc.).

These processes make it possible to maximise the efficiency of public expenditure and to find new sources of economic growth. Organisations which have already adopted e-procurement have achieved savings between 5 and 20 %. The total procurement market in the EU is estimated at more than EUR 2,000 billion, which means that a saving of 5 % would correspond to savings of about EUR 100 billion per year.

E-procurement also contributes to protecting the environment, for example by reducing paper consumption and transport.

Electronic processes also offer easier access to public procurement contracts, particularly for small and medium-sized enterprises (SMEs), and can therefore stimulate competition, innovation and growth within the internal market.

How can e-procurement be implemented?

The European Commission plans to implement several actions for e-procurement, such as:

  • creating an effective legal framework: in December 2011, the European Commission adopted a proposal for a Directive on public procurement and a proposal for a Directive on procurement by entities operating in the water, energy, transport and postal services sectors. These proposals are intended to support the sharing of information and best practices, as well as a greater role for the e-Certis (DE) (EN) (FR) platform. To supplement this legislative framework, the Commission intends to improve the interoperability of electronic signature solutions and is currently revising the existing framework.
  • promoting practical solutions based on best-practices: the Commission advocates the implementation of non-legislative action, such as the installation of new generation IT technology, with the aim of simplifying and streamlining the purchase process. To this end, a group of experts is tasked with making recommendations aimed at promoting “best of breed” e-procurement solutions. The European Commission will also publish the results of a study aimed at identifying and disseminating best-practices in this field.
  • supporting the deployment of e-procurement infrastructure: the Commission has launched a pilot project called PEPPOL which aims to provide the interoperability bridges needed to connect the already existing e-procurement platforms. The Commission intends to support this project in the long term. It will also finance the development of e-procurement infrastructure through the Connecting Europe Facility, with assistance specifically from the structural funds.
  • developing a dissemination strategy: the Commission would like to inform contracting authorities and suppliers about the benefits of e-procurement. To this end, it intends to draw on the Europe Enterprise Network, as well as on the regions and cities of Europe through networking programmes such as INTERREG. The Commission will also organise an annual conference on developments in e-procurement in order to ensure the exchange of information between the stakeholders involved.
  • ensuring take-up is monitored: the development of a set of indicators is required in order to monitor the implementation of e-procurement. The Commission therefore proposes to create electronic systems to monitor procurement expenditure.
  • considering the international dimension of e-procurement: common international standards should be established in order to ensure better operability of public procurement contracts. To achieve this, the Commission intends to promote international regulatory dialogues on e-procurement. The first annual report on e-procurement will be published by mid-2013 and will detail the progress made in this area.

Context

In the Single Market Act, the Commission expressed its wish to modernise the EU legal framework relating to public procurement contracts. The economic value of this sector is considerable: the total value of contracts governed by the current directives amounts to about EUR 447 billion. The introduction of electronic processes is expected to improve the effectiveness of public procurement contracts.

Concessions under Community law

Concessions under Community law

Outline of the Community (European Union) legislation about Concessions under Community law

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Concessions under Community law

Concessions differ from public contracts in the transfer of the responsibilities of operation that they entail. The European Commission identifies the specific characteristics of works and service concessions. It specifies the rules and principles applicable to this type of contract under the Treaty and secondary legislation, as well as the Court of Justice case law.

Document or Iniciative

Commission interpretative communication on concessions under Community law [Official Journal C 121 of 29.04.2000]

Summary

The Treaty establishing the European Community does not define concessions *. It is only Directive 93/37/EEC on public works contracts * that lays down specific provisions for works concessions. Service concessions, however, which have developed in practice in several Member States, are subject to the rules and principles of the EC Treaty.

Scope

This communication addresses concessions in which a public authority entrusts a third party with the total (or partial) management of an economic activity which is normally the authority’s responsibility and for which the third party assumes the operating risk.

The communication does not concern:

  • acts whereby a public authority authorises the exercise of an economic activity.
    Examples: taxi concessions, authorisations to use the public highway (newspaper kiosks, café terraces), or acts relating to pharmacies and filling stations;
  • acts concerning non-economic activities such as compulsory schooling or social security.

Relationships between public authorities and public enterprises entrusted with the operation of services of general economic interest are, in principle, covered by this communication. The Community law on concessions does not cover interorganic or “in-house” relationships that specifically mean that the awarding authority exercises over the concessionaire a control which is similar to that which it exercises over its own departments and carries out the essential part of its activities with that party.

Works concessions

Directive 93/37/EEC distinguishes a works concession from a public works contract by the fact that the concessionaire is granted the right to exploit a construction as a consideration for having erected it. The existence of an exploitation risk related to the investment made is the determining factor. This right of exploitation may also be accompanied by payment.

The right of exploitation implies the transfer of the responsibilities of operation from the grantor to the concessionaire. These responsibilities cover the technical, financial and managerial aspects of the construction. For example, the concessionaire is responsible for making the investments required so that the construction is available to users under good conditions. He is responsible for paying off the construction and bears the risks inherent in the construction, management and use of the facilities.

The right of exploitation allows the concessionaire to demand payment, over a certain period of time, from those who use the structure erected and/or other forms of remuneration from exploitation, such as tolls, fees or “shadow tolls”. The fact that the right of exploitation may be accompanied by payment does not change if the sum paid covers only a part of the cost of the construction. It can happen that a State bears part of the costs of operating the concession in order to keep prices down for users. This partial remuneration can take the form of a flat rate amount or a sum paid on the basis of the number of users. This partial remuneration should not, however, have the effect of eliminating the risk inherent in exploitation that is borne by the concessionaire – otherwise it will be reclassified as a public works contract.

Service concessions

Directive 92/50/EEC on public service contracts does not define service concessions. The new Directive 2004/18/EC defines service concessions as contracts of the same type as a public service contract except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service or in this right together with payment. Service concessions are, however, not subject to any detailed rules in the Directive.

Nonetheless, service concessions are subject to the principles and rules enshrined in the EC Treaty. A service concession exists when the operator bears the risks involved in establishing and exploiting the service. The operator obtains revenue from the user, particularly by charging fees. As is the case for works concessions, service concessions are characterised by a transfer of the responsibility of exploitation.

How does one determine which system applies in the case of mixed contracts involving works carried out and the provision of one or more services? In practice, this is in fact virtually always the case, since public works concessionaires often provide services to users on the basis of the structure they have built. If the main subject matter of the contract concerns the building of a structure on behalf of the grantor, it should be considered as a works concession. This is the case, for example, for a motorway or toll bridge. If the contract includes several elements that may be separated, the rules that apply to each should be applied separately. For example, motorway catering services may be the subject of a different service concession from that involving its construction or management.

COMMUNITY PROVISIONS APPLYING TO CONCESSIONS

The Treaty establishing the European Community prohibits any discrimination on grounds of nationality and establishes rules on the free movement of goods, the freedom of establishment, and the freedom to provide services. Works or service concessions are subject in particular to Articles 28 to 30 and 43 to 55 that are based on the following principles:

  • Equality of treatment.
    This principle implies in particular that all potential concessionaires know the rules in advance and that they apply to everybody in the same way. The Court has stipulated that in order to permit an objective comparison between offers, these offers should all conform to the tender specifications. And, if an awarding authority takes account of changes to a specific offer after the tenders are opened, the Court considers that the tenderer concerned has obtained an advantage. Provisions reserving public contracts only to companies of which the State or the public sector is a major, or the sole, shareholder contravene the principle of equality of treatment.
  • Transparency.
    The principle of transparency can be ensured by any appropriate means, including advertising, which contains the information necessary to enable potential concessionaires to decide whether they are interested in participating.
    In virtually all the Member States, the administrative rules or practices provide that the awarding authorities must make their intention public before launching a concession. In its Telaustria judgment, the Court of Justice of the European Union reiterates the awarding authority’s obligation to guarantee all potential tenderers a proper degree of advertising in awarding concessions.
  • Proportionality.
    According to the principle of proportionality, any measure chosen should be both necessary and appropriate in the light of the objectives sought.
    With regard to concessions, a Member State may not impose technical, professional or financial conditions that are excessive and disproportionate when selecting candidates. Nor should the duration of the concession be set in such a way that it limits open competition beyond what is required to ensure that the investment is paid off and there is a reasonable return on invested capital, whilst maintaining a risk inherent in exploitation by the concessionaire.
  • Mutual recognition.
    According to the principle of mutual recognition, a Member State must accept the products and services supplied by economic operators from another Member State. It must also accept the technical specifications, checks, diplomas, certificates and qualifications required in another Member State if these are recognised as equivalent.

The Treaty provides for certain exceptions to the principles of the freedom of establishment and the freedom to provide services. For concessions, these exceptions are limited to cases covered by Article 45 of Treaty, such as those in which the concessionaire directly and specifically exercises official authority. As such, activities said to be in the “public interest” or carried out by virtue of an obligation or an exclusivity established by law are not therefore automatically covered by this exception.

Justifying decisions to refuse a tender

In the case of concessions, the awarding authority must give reasons for refusing or rejecting an offer so that any tenderer who considers that he/she has suffered damage can open an appeal procedure.

Directive 89/665/EC on review procedures for public works contracts applies to works concessions.

Directive 93/37/EEC on works concessions establishes specific advertising rules

Upstream, all awarding authorities must publish a public works concession notice in the Official Journal of the European Communities in order to put this contract up for competition at European level. This advertising rule applies irrespective of the nature of the potential concessionaire.

Downstream, there is the problem of contracts awarded by the concession contract holder. Everything depends on the legal nature of the concessionaire:

  • if the concessionaire is itself an awarding authority, contracts for works which are over the Community threshold must be awarded in full compliance with all the detailed provisions of the Directive on public works contracts;
  • if the concessionaire is not an awarding authority, the Directive stipulates that he/she must comply only with certain advertising rules.
    These rules are not applicable if the works contracts are awarded to grouped or affiliated undertakings.
Key terms used in the act
public contract: contract for pecuniary interest concluded in writing between a contracting body and an economic operator, which has as its object the execution of works, the supply of products or the provision of services.
(works or service) concession: a contract which differs from a public contract in that the source of revenue for the economic operator consists either solely in the right of exploitation or in this right together with payment.

Related Acts

Green Paper on public-private partnerships and Community law on public contracts and concessions [COM(2004) 327 final – Not published in the Official Journal].

Public-private partnerships (PPPs) re-define the relationship between the public and private spheres. This Green Paper takes stock of existing practices in the European Union from the perspective of Community legislation. In letting those involved express their views, it launches a debate on whether a specific legal framework should be drawn up at European level. See the SCADPlus webpage on PPPs.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 12 May 2004 – White Paper on services of general interest [COM(2004) 374 final – Not published in the Official Journal].

Presented as a follow-up to the Green Paper on services of general interest, the European Commission White Paper sets out the approach adopted by the European Union to foster the development of high-quality services of general interest. It presents the main elements of a strategy aimed at ensuring that all citizens and enterprises in the Union have access to high-quality and affordable services. See the SCADPlus webpage on the White Paper.

Green Paper on public-private partnerships

Green Paper on public-private partnerships

Outline of the Community (European Union) legislation about Green Paper on public-private partnerships

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Green Paper on public-private partnerships

The phenomenon of public-private partnerships (PPPs), which re-define the relationship between the public and private spheres, is expanding rapidly. This Green Paper takes stock of existing practices in the European Union from the perspective of Community legislation. In letting those involved express their views, it launches a debate on whether a specific legal framework should be drawn up at European level.

Document or Iniciative

Green Paper on public-private partnerships and Community law on public contracts and concessions [COM(2004) 327 final].

Summary

PPPs describe a form of cooperation between the public authorities and economic operators. The primary aims of this cooperation are to fund, construct, renovate or operate an infrastructure or the provision of a service. PPPs are present in sectors such as transport, public health, education, national security, waste management, and water and energy distribution. At European level, they help implement the European Initiative for Growth and trans-European transport networks.

PPPs are characterised by:

  • the duration of the relationship between the partners;
  • the method of funding the project;
  • the role of the partners in the definition of objectives, design, completion, implementation, and funding;
  • the distribution of risks.

The Green Paper distinguishes two types of PPP:

  • PPPs of a purely contractual nature.
    In this case, the partnership is based solely on contractual links and may fall within the scope of European Directives on public procurement;
  • PPPs of an institutional nature.
    These PPPs involve cooperation within a distinct entity and may lead to the creation of an ad hoc entity held jointly by the public sector and the private sector or the control of a public entity by a private operator.

Analysing PPPs from the perspective of Community legislation

There is no specific legal framework for PPPs at European level. The Green Paper therefore seeks to examine whether the Treaty establishing the European Community (EC Treaty) and its secondary legislation is suitable and sufficient to cope with the particular challenges posed by PPPs. This analysis looks at both the selection of the private partner and the implementation of the partnership.

Any act whereby a public entity entrusts the provision of an economic activity to a third party must be examined in the light of the rules and principles of the EC Treaty. With regard to the freedom of establishment and the freedom to provide services (Articles 43 to 49), these principles encompass transparency, equality of treatment, proportionality and mutual recognition. The EC Treaty thus applies to PPPs.

Certain forms of PPPs are subject to European legislation on public procurement procedures. Revised in 2004, this legislation introduces a new procedure for awarding contracts: the competitive dialogue. This dialogue provides a legal basis for certain forms of PPPs in the case of very complex projects for which a competent authority has a specific need and seeks the economic operator offering the optimum technical solution.

PPPs may be involved in works or services concessions. These can be distinguished from public contracts insofar as at least part of the economic operator’s remuneration comes from operation of the infrastructure or service. At European level, concessions fall partly, or in the case of services concessions entirely, outside the scope of the European directives on public procurement. The Commission’s Interpretative Communication on concessions under Community law [Official Journal C 121 of 29 April 2000] sheds light on the obligations incumbent on the public authorities when selecting the applicants to whom concessions are granted.

Is there a need for a specific legal framework for PPPs at European level?

Professional circles complain about the lack of legal clarity in Community legislation, a situation which is holding back the expansion of PPPs.

The Green Paper launches a public consultation on the best way to ensure the development of PPPs under conditions of effective competition and legal clarity. It asks a total of 22 questions which deal in particular with the following topics:

  • the framework of the procedures for selecting the private partner;
  • the establishment of private initiative PPPs;
  • the contractual framework and any changes made in the course of a PPP;
  • sub-contracting;
  • the importance of effective competition in the case of institutionalised PPPs.

The Commission promises to analyse and publish the results of the contributions made to the public consultation. It will, where appropriate, submit concrete follow-up initiatives. There are various possibilities, none of which is compulsory: binding legislation, an interpretative communication, the better coordination of national actions, or the exchange of best practice among Member States.

Background

As announced in its Strategy for the internal market 2003-2006, the European Commission has published the Green Paper on public-private partnerships (PPPs).

PPPs have been expanding rapidly over the last fifteen years or so. The public authorities make increasing use of them in view of the budgetary constraints with which they are confronted. In this way, they can benefit from private sector know-how. Another advantage lies in the savings made possible by PPPs as they incorporate all the stages of a project, from its design through to exploitation. On a more general level, PPPs also contribute to the Community debate on services of general interest. The development of PPPs also forms part of the changing role of the State in the economy, as it moves away from being a direct operator towards the role of organiser, regulator and controller.

Related Acts

Communication from the Commission of 15 November 2005 to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on public-private partnerships and Community law on public procurement and concessions [COM(2005) 569 final – Not published in the Official Journal].

Defence procurement

Defence procurement

Outline of the Community (European Union) legislation about Defence procurement

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Defence procurement

This Green Paper develops the debate on the case for Community action to establish a European market for defence equipment. It presents the main characteristics of defence procurement markets (their fragmentation, specific features, and limits to their legal framework) to justify Community action in this field. It then puts forward some ideas which could be considered when defining actions at European level.

Document or Iniciative

Commission Green Paper of 23 September 2004 on defence procurement [COM(2004) 608 final- Not published in the Official Journal]

Summary

This Green Paper is one of the measures announced by the Commission with a view to the gradual creation of a competitive European defence equipment market (EDEM). It opens an official consultation process lasting four months from 23 September 2004 onwards.

The Green Paper emphasises three characteristics of these markets:

  • the major fragmentation of markets along national lines;
  • the specific features which distinguish them from other types of public procurement;
  • a complex legal framework.

The particular characteristics of defence markets are not only economic and technological, but are also related to the security and defence policies of each Member State. As sole clients, States play a dominant role in defining the market. They control the arms trade by means of export licences and the granting of authorisations to tender for contracts. In addition, security of supply and confidentiality requirements in the defence sector often lead to the use of purely national procedures. Finally, arms development programmes are complex due, in particular, to their limited production volumes, high risk of commercial failure, and the length of their life cycles.

As for the applicable legal framework, Directive 2004/18/EC specifies that Community rules on public procurement apply to contracts awarded in the field of defence, subject to the exemption system laid down in Article 296 of the Treaty establishing the European Communities (EC Treaty). This system allows Member States to invoke the essential interests of their security. The case law of the Court of Justice of the European Communities has developed a restrictive interpretation of the possibility of using this derogation. However, several difficulties of implementation do remain, due mainly to the absence of a precise interpretation of these provisions and a definition of the concept of essential interests of security.

Defence procurement is still, therefore, largely covered by national legislation, most of which provides for exemptions to the rules governing public procurement, with differing degrees of transparency. This legislation displays a lack of uniformity in a number of areas: the publication of contract notices, the potential for non-publication, the criteria for selecting suppliers, the tendering procedures and the basis on which contracts are awarded.

In addition to these national systems, there are the rules arising from intergovernmental agreements relating to joint arms programmes. Since, however, these agreements have not achieved satisfactory results, the recently-created European Defence Agency should, under the authority of the Council and in consultation with the Commission, help set up a competitive European defence market.

The Green Paper identifies two possible instruments to overcome these obstacles which limit the access of European industries to Member States’ defence markets:

  • clarification of the existing legal framework: the Green paper proposes drawing up a non-binding instrument, such as an interpretative Communication from the Commission. This Communication could give a further explanation of the principles defined by the Court on the interpretation of Article 296 of the EC Treaty;
  • the creation of a special instrument to supplement the EU’s legal framework. It is proposed that a new directive be drawn up to coordinate the procedures for awarding contracts by ensuring greater legal certainty, more information on the contracts at Community level and the introduction of the necessary flexibility in awarding these contracts. The Green Paper also details the contents of such a Directive.

Whilst these instruments cannot provide exhaustive answers to all the specific aspects of defence markets, they would nonetheless constitute a useful tool for successful cooperation between Member States.

Related Acts

Interpretative Communication from the Commission of 7 December 2006 on the application of Article 296 of the Treaty in the field of defence procurement [COM(2006) 779 final – Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament on the results of the consultation launched by the Green Paper on Defence Procurement and on the future Commission initiatives [COM(2005) 626 final – Not published in the Official Journal]

Communication from the Commission of 11 March 2003. “European defence – Industrial and market issues – Towards an EU Defence Equipment Policy” [COM(2003) 113 final – Official Journal C76 of 25.03.2003]

This communication presents proposals for action in various areas of the European Union defence equipment policy.