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European Parliament endorsed EU public procurement reform package

Date

2014 01 16

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The European Parliament endorsed the EU public procurement reform, which was under the supervision of the Ministry of Economy during the Lithuanian Presidency of the Council of the European Union (EU). This reform will make it binding on public sector institutions, which are engaged in purchasing items, services or works, to focus more on both the price and economic, environmental and social reasoning aspects. The currently existing rules provide for the possibility to award the lowest price tender. Following the data from the European Parliament, up to 18 percent of the GDP is spent on public procurement in the EU (in Lithuania, it makes up to 13 percent). Moreover, it is the first time when the rules on concessions have been introduced stipulating that the EU Member States are free to decide on whether to use their own resources or refer to public companies when procuring works and services.

‘During the Presidency of the Council of the EU, Lithuania contributed greatly to promoting the modernisation of public procurement in the EU. Following the initiative of the Ministry of Economy, Lithuania encouraged discussions on smart public procurement, successfully completed the negotiations on the public procurement directives and reached general consensus concerning the Directive on the submission of e-invoices in public procurement. In the Informal Competitiveness Council, which was held in Vilnius in July 2013, the ministers of the Member States were discussing the importance of changeover to exclusively online public procurement and e-invoicing EU-wide seeking to modernise public administration. In Brussels, the high level conference “Modernising public procurement: the role of e-procurement and e-invoicing” was held, in which the experience gained by Lithuania in the field of e-public procurement was introduced,’ said Vice-Minister of Economy Rasa Noreikienė.

To identify the most economically advantageous tender the public sector institutions will have to not simply evaluate the price but also give proper attention to the environmental and social aspects as well as the quality of the submitted tenders and the costs of the products proposed.    

The new Rules address the problem of how to limit access to participation in public procurement for those companies which are known to have infringed the requirements of the laws regulating labour. Moreover, the Rules also enable clients to demand that suppliers disclose in advance the selected subcontractors so that the client could have a possibility to make settlements with them directly. This will enable efficient fight against social dumping and will better defend the rights of employees. 

The new standard ‘European Single Procurement Document’ proposed within the framework of the new directives is expected to simplify and reduce up to 80 percent of the administrative burden on companies, which are engaged in public procurement, since it will be exclusively the winner of the tender who will have to submit the competence attesting documents, which requirement will facilitate the participation in public procurement of small and medium-sized enterprises.

The Rules also address the relevant issue concerning the participation in public procurement of those suppliers who have been negligent in performing their obligations under the previously awarded contracts. The new directives allow the possibility to reject the tenders of such suppliers.

There are also other innovations that have been introduced in the field of public procurement in the EU. It has become binding on the Member States to switch to e-communication in performing public procurement; the publication, the terms of the invitation to tender, the tenders of suppliers and all the necessary correspondence will have to be exclusively submitted by online means. Some exceptions to the regulation of public procurement have also been established which allow derogation from the directive provisions when concluding internal transactions or in case of cooperation of the public sector entities.  There are also cases when the concluded public procurement contracts are allowed to be changed, etc.

Moreover, there is a separate public procurement procedure aimed to encourage innovative solutions. The innovation partnership will enable public sector entities to publish invitations to tender seeking to promote innovative solutions. 

Following the entry into force of the General Procurement Rules, endorsed by the European Parliament, all the EU Member States will have to transpose those Rules to their national law. Lithuania is therefore planning to establish a working group, which is to include representatives from the institutions which deal with public procurement, seeking to help draft legal acts aimed to implement the new public procurement directives.