EUROPEAN COMMISSION 
Brussels, 20.12.2011 
SEC(2011) 1585 final 
  
COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT 
Accompanying the document 
Proposal for a Directive of the Euro pean Parliament and of the Council 
on Public Procurement 
and  
the Proposal for a Di rective of the European Parliament and of the Council  
on procurement by entities operating in the water, energy, transport and postal sectors
{COM(2011) 896 final} 
{SEC(2011) 1586 final}  
 
EN 2   EN COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT 
Accompanying the document 
Proposal for a Directive of the European Parliament and of the Council 
on Public Procurement 
and  
the Proposal for a Directive of the Eu ropean Parliament and of the Council  
on procurement by entities operating in the water, energy, transport and postal sectors 
 
This report commits only the Commission's servi ces involved in its pr eparation and does not 
prejudge the final form of any deci sion to be taken by the Commission 
 
EN 3   EN TABLE OF CONTENTS 
1. Procedural Issues and Consulta tion of Interested Parties .......................................... 12 
1.1. Procedural issues........................................................................................................ 1 2 
1.2. External expertise and consulta tion of interested parties........................................... 12 
1.2.1. Overview................................................................................................................ .... 12 
1.2.2. Summary of the findings from the 2011 ev aluation of public procurement rules ..... 12 
1.2.3. Summary of the synthesis of responses to  the GP on the modernisation of EU public 
procurement policy..................................................................................................... 13 
1.2.4. Summary of the findings from the 2010 evaluation of the 2004 Action Plan for e-
procurement................................................................................................................ 14 
1.2.5. Summary of the synthesis of res ponses to the e-procurement GP............................. 14 
1.2.6. External expertise...................................................................................................... . 14 
1.2.7. Impact Assessment Board.......................................................................................... 15 2. Policy context, Problem de finition and Subsidiarity.................................................. 16 
2.1. Policy context............................................................................................................ . 16 
2.1.1. Scope of the review and this impact assessment........................................................ 17 2.1.2. Overview of legislative framework............................................................................ 17 2.2. Background ................................................................................................................ 17 
2.2.1. What is public procurement? ..................................................................................... 17 2.2.2. Nature and size of the market concerned ................................................................... 18 2.3. Problem definition...................................................................................................... 21  
2.3.1. Key problems and problem drivers............................................................................ 21 2.3.2. Graphical representation  of problem drivers.............................................................. 27 
2.4. How would the problem evolve , all things being equal?........................................... 29 
2.5. The EU's right to act and justification........................................................................ 30 3. Objectives.................................................................................................................. . 30 
3.1. General objectives...................................................................................................... 30  
3.2. Specific objectives ..................................................................................................... 31  
3.3. Operational objectives................................................................................................ 31 4. Policy Options............................................................................................................ 32  
4.1. Radical options........................................................................................................... 32 
 
EN 4   EN 4.1.1. Abolition of the Directives......................................................................................... 32 
4.1.2. Full harmonisation ..................................................................................................... 3 3 
4.1.3. Conclusions on radical options .................................................................................. 33 4.2. Development and screening of possible options........................................................ 34 4.2.1. "No change" options .................................................................................................. 34 4.2.2. Non-legislative / soft law options .............................................................................. 34 4.2.2.1. Narrowing down the soft law options ........................................................................ 34 4.2.3. Framing the legal options........................................................................................... 35 4.2.4. Detailed mapping of options ...................................................................................... 38 4.3. Summary of options to be analysed further ............................................................... 43 5. Analysis of Impacts.................................................................................................... 43 5.1. Scope..................................................................................................................... ..... 44 
5.1.1. Impacts of SCO.NC option ........................................................................................ 44 5.1.1. Impacts of SCO.LEGI.TARGET option.................................................................... 44 5.1.1.1. Impacts for CAEs...................................................................................................... . 44 
5.1.1.2. Impacts for businesses (including SMEs).................................................................. 46 5.1.1.3. Impacts on Member States......................................................................................... 46 
5.1.1.4. Impacts on the Internal Market .................................................................................. 47 
5.1.1.5. Summary of stakeholder views on this option ........................................................... 47 5.1.1.6. Impacts on administrative burden and simplification ................................................ 47 5.1.2. Impacts of SCO.LEGI.REDUCE option.................................................................... 48 5.1.2.1. Impacts for CAEs...................................................................................................... . 48 
5.1.2.2. Impacts for businesses (including SMEs).................................................................. 49 5.1.2.3. Impacts on Member States......................................................................................... 49 5.1.2.4. Impacts on the Internal Market .................................................................................. 50 5.1.2.5. Summary of stakeholder views on this option ........................................................... 51 5.1.2.6. Impacts on administrative burden and simplification ................................................ 51 5.1.3. Summary of impacts of options in Scope against specific objectives ....................... 51 
5.2. Procedures................................................................................................................ .. 52 
5.2.1. Impacts of PRO.NC option ........................................................................................ 52 5.2.2. Impacts of PRO.LEGI.DESIGN option..................................................................... 52 
 
EN 5   EN 5.2.2.1. Impacts on CAEs....................................................................................................... . 52 
5.2.2.2. Impacts for businesses (including SMEs).................................................................. 53 5.2.2.3. Impacts on Member States......................................................................................... 54 5.2.2.4. Impacts on the Internal Market .................................................................................. 55 5.2.2.5. Summary of stakeholders views on this option.......................................................... 55 5.2.2.6. Impacts on administrative burden and simplification ................................................ 56 5.2.3. Impacts of PRO.LEGI.FLEXIB option...................................................................... 56 5.2.3.1. Impacts on CAEs....................................................................................................... . 56 
5.2.3.1. Impacts for businesses (including SMEs).................................................................. 57 5.2.3.2. Impacts on Member States......................................................................................... 58 5.2.3.3. Impacts on the Internal Market .................................................................................. 58 5.2.3.4. Summary of stakeholders views on this option.......................................................... 58 5.2.3.5. Impacts on administrative burden and simplification ................................................ 59 5.2.4. Summary of impacts of options in Pr ocedures against sp ecific objectives ............... 59 
5.3. Strategic public procurement ..................................................................................... 60 5.3.1. Impacts of STR.NC option......................................................................................... 60 5.3.2. Impacts of STR.LEGI.FACILIT option..................................................................... 60 
5.3.2.1. Impacts on CAEs....................................................................................................... . 60 
5.3.2.2. Impacts on businesses (including SMEs)................................................................... 62 5.3.2.3. Impacts on Member States......................................................................................... 63 5.3.2.4. Impacts on the Internal Market .................................................................................. 64 5.3.2.5. Summary of stakeholders views on this option.......................................................... 65 5.3.2.6. Impacts on administrative burden and simplification ................................................ 65 5.3.3. Impacts of STR.LEGI.ENFORC option .................................................................... 66 5.3.3.1. Impacts on CAEs....................................................................................................... . 66 
5.3.3.2. Impacts on businesses (including SMEs)................................................................... 67 5.3.3.3. Impacts on Member States......................................................................................... 67 5.3.3.4. Impacts on the Internal Market .................................................................................. 67 5.3.3.5. Summary of stakeholders views on this option.......................................................... 68 5.3.3.6. Impacts on administrative burden and simplification ................................................ 68 5.3.4. Summary of impacts of options in St rategic against specific objectives................... 69 
 
EN 6   EN 5.4. Access .................................................................................................................... .... 70 
5.4.1. Impacts of ACC.NC option........................................................................................ 70 5.4.2. Impacts of ACC.SOFT option.................................................................................... 70 5.4.3. Impacts of ACC.LEGI.FACILIT option.................................................................... 70 5.4.3.1. Impacts on CAEs....................................................................................................... . 70 
5.4.3.2. Impacts on businesses (including SMEs)................................................................... 71 5.4.3.3. Impacts on Member States......................................................................................... 72 5.4.3.4. Impacts on the Internal Market .................................................................................. 72 5.4.3.5. Summary of stakeholders views on this option.......................................................... 72 5.4.3.6. Impacts on administrative burden and simplification ................................................ 73 5.4.4. Impacts of ACC.LEGI.ENFORC option ................................................................... 73 5.4.4.1. Impacts on CAEs....................................................................................................... . 74 
5.4.4.2. Impacts on businesses (including SMEs)................................................................... 75 5.4.4.3. Impact on Member States........................................................................................... 75 5.4.4.4. Impacts on the Internal Market .................................................................................. 76 5.4.4.5. Summary of stakeholders views on this option.......................................................... 76 5.4.4.6. Impacts on administrative burden and simplification ................................................ 76 
5.4.5. Summary of impacts of options in Access against specific objectives...................... 77 
5.5. Governance ................................................................................................................ 78 
5.5.1. Impacts of GOV.NC option ....................................................................................... 78 5.5.2. Impacts of GOV.SOFT option ................................................................................... 78 5.5.3. Impacts of GOV.LEGI.TARGET option................................................................... 79 5.5.3.1. Impacts on CAEs....................................................................................................... . 79 
5.5.3.2. Impacts for businesses (including SMEs).................................................................. 80 5.5.3.3. Impacts on Member States......................................................................................... 80 5.5.3.4. Impacts on the Internal Market .................................................................................. 80 5.5.3.5. Summary of stakeholders views on this option.......................................................... 81 5.5.3.6. Impacts on administrative burden and simplification ................................................ 81 5.5.4. Impacts of GOV.LEGI.ENHANC option .................................................................. 81 5.5.4.1. Impacts on CAEs....................................................................................................... . 81 
5.5.4.2. Impacts on businesses (including SMEs)................................................................... 82 
 
EN 7   EN 5.5.4.3. Impacts on Member States......................................................................................... 82 
5.5.4.4. Impacts on the Internal Market .................................................................................. 83 5.5.4.5. Summary of stakeholders views on this option.......................................................... 83 5.5.4.6. Impacts on administrative burden and simplification ................................................ 83 5.5.5. Summary of impacts of options in Governance against specific objectives.............. 84 
5.6. Regulatory form ......................................................................................................... 84  
6. Comparing the Options .............................................................................................. 85 6.1. Preferred solution....................................................................................................... 8 8 
6.1.1. Scope................................................................................................................... ....... 88 
6.1.2. Procedures.............................................................................................................. .... 89 
6.1.3. Strategic procurement ................................................................................................ 89 6.1.4. Access .................................................................................................................. ...... 90 
6.1.5. Governance .............................................................................................................. .. 91 
6.2. Conclusions............................................................................................................... . 91 
7. Monitoring and Evaluation ........................................................................................ 92 8. ANNEXES ................................................................................................................. 94 8.1. ANNEX 1 – Procedural issues................................................................................... 94 
8.1.1. Inter-service steering group........................................................................................ 94 
8.1.2. External expertise...................................................................................................... . 95 
8.1.3. Public consultations ................................................................................................... 9 6 
8.1.3.1. The GP on the modernisation of EU public procurement policy............................... 96 8.1.3.2. The e-procurement GP ............................................................................................... 96 8.2. ANNEX 2 – Additional information related to Section 2.2. Background ................. 97 8.2.1. Total expenditure on works, goods and services ....................................................... 97 8.2.2. The estimated value of tenders published in TED ..................................................... 98 8.2.3. Number of contract notices and contr act award notices published in OJ/TED ......... 99 
8.2.4. Legal detail - overview of public procurement legislation ........................................ 99 8.3. ANNEX 3 - Detailed description of problem drivers .............................................. 105 8.3.1. Problem drivers in Scope and coverage................................................................... 105 8.3.1.1. Identification of buyers covered............................................................................... 107 8.3.1.2. Identification of transactions covered ...................................................................... 107 
 
EN 8   EN 8.3.1.3. A/B-type services..................................................................................................... 108 
8.3.1.4. Legal uncertainty..................................................................................................... . 109 
8.3.1.5. Conclusions........................................................................................................... ... 111 
8.3.2. Problem drivers in Procedures ................................................................................. 111 8.3.2.1. Disproportionate costs of proce dures for low value contracts................................. 112 
8.3.2.2. Complexity of the rules on procedures .................................................................... 114 8.3.2.3. Insufficient flexibility.............................................................................................. . 115 
8.3.2.4. E-procurement......................................................................................................... . 116 
8.3.2.5. Aggregation of demand............................................................................................ 117 8.3.2.6. Conclusions........................................................................................................... ... 119 
8.3.3. Problem drivers in Strategic public procurement..................................................... 119 8.3.3.1. Insufficient provisions with regards to  the integration of strategic goals ................ 119 
8.3.3.2. Uncertainty with regards to extent of integration of strategic goals ........................ 122 
8.3.3.3. Conclusions........................................................................................................... ... 124 
8.3.4. Problem drivers in Access........................................................................................ 125 8.3.4.1. Low cross-border procurement ................................................................................ 125 8.3.4.2. Import penetration lower than  in the private sector ................................................. 126 
8.3.4.3. Reluctance to bid cross-border amongst firms......................................................... 128 
8.3.4.4. Market access barriers (SMEs in particular)............................................................ 130 8.3.4.5. Conclusions........................................................................................................... ... 133 
8.3.5. Problem drivers in Governance................................................................................ 133 8.3.5.1. Differences in national organi sation of public procurement.................................... 133 
8.3.5.2. Different capabilities of CAEs................................................................................. 134 8.3.5.3. Risks of errors in application ................................................................................... 135 8.3.5.4. Difference in monitoring arrangements ................................................................... 137 8.3.5.5. Integrity of public procurement ............................................................................... 137 8.3.5.6. Conclusions........................................................................................................... ... 138 
8.4. ANNEX 4 – Summary table linking objectives with problems............................... 138 8.5. ANNEX 5 – Long list of proposals consid ered before defining Options ................ 140 
8.6. ANNEX 6 – Detailed descrip tion of Headline actions ............................................ 168 
8.7. ANNEX 7 – Detailed analysis of imp acts of selected Headline actions.................. 172 
 
EN 9   EN 8.7.1. SCO.LEGI.TARGET - New regime for all serv ices and a lighter tr eatment for social 
services..................................................................................................................... 17 2 
8.7.2. SCO.LEGI.REDUCE- General in crease of EU thresholds...................................... 176 
8.7.2.1. Impacts on the use of procedures............................................................................. 176 8.7.2.2. Impacts on the number and volume of transactions no longer covered................... 178 8.7.3. PRO.LEGI.DESIGN - Increase in the use of e-procurement................................... 179 
8.7.4. PRO.LEGI.DESIGN - Improve tool s for repetitive purchasing .............................. 181 
8.7.4.1. Impacts of using framework contracts ..................................................................... 182 8.7.4.2. Impacts of increasing the use of the DPS................................................................. 183 
8.7.4.3. Impacts of using e-catalogues .................................................................................. 183 8.7.5. PRO.LEGI.FLEXIB - Permit more negotiations ..................................................... 184 8.7.5.1. Impact on the costs of procedures............................................................................ 184 8.7.5.2. Impacts on competition............................................................................................ 185 8.7.5.3. Impacts on the duration of the award stage.............................................................. 186 8.7.5.4. Impacts on the costs of procedures .......................................................................... 187 8.7.5.5. Impacts on cross-border trade .................................................................................. 187 8.7.6. PRO.LEGI.FLEXIB - New lighter regi me for sub-central authorities .................... 189 
8.7.7. STR.LEGI.FACILIT - Directly linked externalities taken into account.................. 190 
8.7.8. STR.LEGI.FACILIT - Innovation partnership ........................................................ 191 8.7.9. STR.LEGI.ENFORC - Quotas in  strategic procurement......................................... 192 
8.7.10. ACC.LEGI.FACILIT - European public procurement passport.............................. 192 8.7.10.1. Implications......................................................................................................... ..... 193 
8.7.10.2. Advantages and disadvantages................................................................................. 193 8.7.11. GOV.LEGI.TARGET - New organisation of CPBs ................................................ 194 8.7.12. GOV.LEGI.ENHANC – Oblige Member States  to identify nati onal authority in 
charge of implementation, control and monitoring of public procurement which 
reports annually on performance.............................................................................. 195 
8.7.12.1. Current situation.................................................................................................... ... 195 
8.7.12.2. Reporting obligations:.............................................................................................. 1 95 
8.7.12.3. Technical support.................................................................................................... . 196 
8.7.12.4. Conclusions.......................................................................................................... .... 196 
8.7.12.5. Possible impact of creating oversight bodies  (back of the envel ope calculations).. 197 
 
EN 10   EN 8.8. ANNEX 8 – Background data to suppor t the analysis of impacts........................... 198 
8.8.1. Comparison between above and belo w EU-thresholds procurement ...................... 198 
8.8.2. Comparison between above EU-thresholds procurement and private procurement 199 
8.8.3. Litigation costs........................................................................................................ . 200 
8.8.4. Costs of procedures.................................................................................................. 201  
8.8.5. SMEs impacts........................................................................................................... 2 02 
8.8.6. Administrative burden.............................................................................................. 202 8.9. ANNEX 9 – Glossary............................................................................................... 204 
 
EN 11   EN Introduction  
In 2009, the public sector spent over € 2,200 billion on goods, services and works – 
amounting to around 19% of EU GDP. The e fficient and strategic management of 
public purchasing is an issu e of paramount policy importa nce on a number of levels: 
the sound management of increasingl y scarce public re sources; the daily 
administration of the 250,000+ government depa rtments, agencies and public bodies 
involved in the award and management of public contracts; the impact on the 
supplier base, many of whom are heavily dependent on public sector business; the 
role of the public sector as  a buyer of 'first resort' for innovative or environmentally 
superior solutions.  
The EU public procurement Directives se ek to support the emergence of open and 
efficient markets for public procurement contracts and thereby facilitate the best use of public resources. They do this by appl ying common principles of transparency, 
open competition and sound procedural management to higher-value public 
procurements which are likely to be of mo st interest to suppliers across the single 
market. In 2009, EU legislation applied to 150,000 procedures, involving a total 
estimated expenditure of € 420 b illion or 3.5% of EU GDP.  
The design of EU public procurement disc iplines has very significant and tangible 
repercussions given the economic significan ce of the activities concerned, the large 
numbers of public purchasers and the tim e and resource involved. EU public 
procurement Directives must provide an en lightened framework for the organisation 
of public procurement which responds to th e most pressing challenges of the time. A 
number of critical reports from the Eur opean Parliament and other stakeholders 
testify to a widespread concern that the current EU public procurement rules can be 
enhanced in a number of important respec ts. Businesses often find the procedures to 
be a “big irritant”
1. These concerns have prompted  the Commission to undertake a 
profound evaluation of the rules and a widespread consultation on possible adjustments to the legislativ e framework (620 respondents).  
Reflecting these concerns, the Single Market Act
2 foresees the publication of 
Commission proposals before the end of  2011, paving the way for adoption of 
revised legislation before the end of 2012. The revision should ' underpin a balanced 
policy which fosters demand for environmenta lly sustainable, socially responsible 
and innovative goods, services and works. This revision should also result in simpler 
and more flexible procurement procedures for contracting authorities and provide 
easier access for companies, especially SMEs'. This impact assessment identifies the 
shortcomings of the existing legislative fr amework, and evaluates the key options for 
                                                 
1 The draft report of the Consortium indicates that European public procurement rules cost European 
businesses around € 188 million. It is stressed that in spite of this modest sum businesses often refer to 
public procurement as a “big irritant”. This can be partly explained by the fact that firms perception is 
also based on compliance costs and other business costs and the frequent legal procedures; source: The 
High Level Group of Inde pendent Stakeholders on Administrativ e Burdens, opinion of 10 December 
2008; available at: http://ec.europa.eu/enterprise/policies/smart-
regulation/files/hlg_opinion_on_ppfinal_en.pdf ; page 2  
2 Commission Communication (COM(2011)206 of 13.04.2011) to the European Parliament, the Council, 
the Economic and Social Committee and the Committee of the Regions: "A Single Market Act: 12 
levers to boost growth and strengthen confidence'. 
 
EN 12   EN tackling them. It aims to help the Commission services in identifying possible 
improvements to the existing legislation. 
1. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
1.1. Procedural issues 
The project was led by Director ate C of the Directorate Ge neral Internal Market and 
Services. It was assisted by an inter-serv ice steering group cont aining representatives 
from 16 other Directorate Generals, which met four times3. 
1.2. External expertise and consulta tion of interested parties 
1.2.1.  Overview 
This impact assessment builds on the extensive external expertise, consultation and 
analysis supporting the eval uation of public procurement published on 24 June 2011 
(hereafter: the evaluation report) and th e 2010 evaluation of the 2004 Action Plan for 
e-procurement (hereafter: the e-procurement evaluation). It also draws on the 
findings of two Green Paper consultations on:  
(a) The modernisation of EU public pr ocurement policy (hereafter: the GP); 
(b) Expanding the use of e-procurement in  the EU (hereafter: the e-procurement 
GP).  
Both of these Green Papers were supporte d by well attended conferences in Brussels 
(on 30.06.2011 and 26.11.2010, respectively), wh ere stakeholders had a further 
opportunity to express their views4.  
Both these evaluations and the Green Pa per findings have been presented and 
discussed with Member State's (hereafter: MS) representatives at meetings of the 
Advisory Committee for Public Contracts (hereafter: ACPC) and the e-procurement 
working group. A special meeting of the ACPC was held on 6.07.11 to discuss the 
emerging findings and possible implications  for the reform. A similar agenda was 
discussed with a wide range  of Directorates General at an internal Commission 
meeting on 15.07.11. 
1.2.2.  Summary of the findings from the 2011 evaluation of public procurement rules 
The evaluation found that the Directives ha ve had positive impacts: transparency has 
increased and there are good levels of competition for many public procurement 
contracts (on average 5.4 bids  per invitation). This has resulted in a net increase in 
benefits - the total cost of the procurem ent process (including all the bidders' costs 
plus those of the contract ing authorities and entities (hereafter: CAE) for those 
                                                 
3 For a full list of participating DGs see: section 8.1.1). 
4 A summary report of the 30.06.2011 confer ence and various speeches are available at: 
http://ec.europa.eu/internal_market/publicprocurem ent/modernising_rules/conferences/index_en.htm.  
 A summary report of the 26.11.2011 confer ence and various speeches are available at: 
http://ec.europa.eu/internal_market/publicprocuremen t/e-procurement/consultations/open_hearing_en.htm  
 
EN 13   EN procedures covered by the EU Directives ha s been estimated at €5.6 billion per year 
or 1.3% of the total value of contracts pub lished. This is more than offset by the 
estimated savings, which are around 5% of the total i.e. €20 billion in 2009, without 
making any allowance for improvements in  quality and wider environmental or 
social benefits. However there is some ev idence that the current procedures are not 
as efficient as they could be (average cost of an above threshold procedure is 
approximately €28,000) which sometimes leads to higher costs for certain parties. 
Cross-border procurement is still not as high as had been expected, accounting for 
around just 1.6% of contract aw ards (3.5% of total value)5.  
1.2.3.  Summary of the synthesis of responses to the GP on the modernisation of EU public 
procurement policy 
A focussed and very broad GP consultation of stakeholders was held between 27 
January and 18 April 2011. Over 620 rep lies were received and whilst responses 
reveal diverging views on the priority whic h should be given to different areas, there 
is strong support for simplification, improvi ng market access (particularly for SMEs) 
and fostering innovation. There is a certain  consensus that the existing procedures 
should be streamlined and made more flexible. The issue of using public 
procurement to support other policies provoked mixed reactions but it was possible 
to identify certain basic orientations and identify certain concrete measures6. The 
issues which attracted the most responses are shown in Figure 1). 
Figure 1): Most frequently answered questions in the GP consultation 
 
                                                 
5 The full report on the evaluation of the public procurement rules, executive summary and supporting 
studies can be found at:  
http://ec.europa.eu/internal_market/publicprocurem ent/modernising_rules/evaluation/index_en.htm  
6 A synthesis document, summarising the replies received to the modernisation of EU public procurement 
policy Green Paper and the responses authorised for publication can be found at:  
http://ec.europa.eu/internal_market/publicprocurem ent/modernising_rules/consultations/index_en.htm  
 
EN 14   EN   
1.2.4.  Summary of the findings from the 2010 evaluation of the 2004 Action Plan for e-
procurement 
The e-procurement evaluation found that the technology to conduct e-procurement is 
now ready to be used and that the repl acement of paper-based public procurement 
procedures by automated processes can, as  expected, deliver faster and more 
streamlined procurement administration. Ho wever, e-procurement take-up across 
Europe was fairly low and whilst one or  two countries have made significant 
progress (often due to mandatory use), ge nerally no more than 5% of procurement 
procedures above the EU thresholds involved electronic processing. Public 
authorities were often deterred by the si gnificant costs and challenges of the switch-
over (administrative, organisational and t echnical) whilst economic operators faced 
difficulties due to different systems and interfaces making different demands (not 
just if trying to operate across borders, but also within a single Member State)7.  
1.2.5.  Summary of the synthesis of res ponses to the e-procurement GP  
Across the 77 replies received, there is br oad support for EU le vel action to improve 
the legislative and policy environment and provide support to CAEs and firms which 
choose to use e-procurement. This included us e of legislation to fa cilitate the use of 
standardised e-procurement solutions. A large majority (76%) of respondents call for 
changes to EU public procurement legislati on in order to integrate better the use of 
ICT in procurement procedures. 85% of res pondents considered that EU intervention 
is needed to avoid the emergence of unn ecessary or disproportionate barriers to 
cross-border participation in e-procurement. Particular attention is needed to resolve access barriers linked to e-signatures and identification. A small majority (53%) of 
respondents support the imposition of EU le vel requirements to use e-procurement
8. 
1.2.6.  External expertise 
Both the evaluations were supported via th e following studies conducted by external 
consultants. 
                                                 
7 The report on the evaluation of the 2004 Action Plan for electronic public procurement and supporting 
study can be found at:  
http://ec.europa.eu/internal_market/publicprocurement/e-procurement/documents/index_en.htm  
8 A synthesis document, summarising the replies r eceived to the e-Procurement Green Paper and the 
responses authorised for publication can be found at:  
http://ec.europa.eu/internal_market/publicprocur ement/e-procurement/consultations/index_en.htm  
 
EN 15   EN Table 1): External expertise – list of studies 
Title of a study Consultant in charge, date 
“Cross-border procurement above EU thresholds“ Rambøll  Management, 2011 
"Public Procurement in Europe – Procedures and 
techniques – A study on th e cost and effectiveness 
of procurement regulation“ PricewaterhouseCoopers,  
London Economics and Ecorys, 
2011  
"Strategic use of public procurement in Europe" Adelphi, Belmont, PPRC, 2011  
"Estimating Benefits and Savings from the 
Procurement Directives" Europe Economics, 2011 
"Taking stock on utilities procurement" Europe Economics, 2011 
"Evaluation of SMEs’ Access to Public 
Procurement Markets in the EU" GHK, 2010 (for DG Enterprise 
and Industry) 
"Study on the evaluation of the Action Plan for 
the implementation of the legal framework for 
electronic procurement " Siemens Time.lex, 2010 
1.2.7.  Impact Assessment Board  
The Impact Assessment Board discussed a dr aft of this report  on 7 September 2011 
and requested a resubmission, based on whic h a final opinion was issued on 23 
September 2011. The draft report was significa ntly amended to address both sets of 
comments from the IAB. In particular, the following changes were implemented: 
• The problem definition has been modified  to identify more clearly the specific 
issues in the legislative framework whic h need to be addressed. More effective 
use has been made of the available empirical evidence and more examples have been included both in the problem statem ent and more genera lly throughout the 
report.  
• Greater detail has been provi ded on the content of th e options under discussion, 
indicating the specific probl em areas which they shoul d address. A "long list" 
of actions considered in the context of legislative reform has been added 
(annex 8.5) and for each legislative option, 1-3 headline actions have been identified and further explained (see chapter 4, tables 2-6 and annex 8.6). 
• A deeper cost-benefit analysis of th e selected headline actions has been 
included, where possible (chapter 5 a nd annex 8.7). This includes extensive 
reworking of the discussion relating to  the legislative options for strategic 
procurement (section 5.3). Whilst a more detailed analysis of some aspects, 
particularly in relation to the options for strategic procurement, would have 
been desirable, it has not proved po ssible given the limited information 
available at this point; 
 
EN 16   EN • stakeholder views have been integrated more systematically, both in the 
problem definition (section 2.3) and to complement the analysis of impacts 
(sections added for each legislative option discussed in chapter 5); 
• a more systematic treatment of admini strative burden has been introduced for 
each legislative option (sections added fo r each legislative option discussed in 
chapter 5); 
• Conclusions regarding the pr eferred options for the content of the legislative 
reform have been integrated in the report (section 6.1). This preferred option 
reflects the opinion of DG MARKT Servi ces and does not prejudge the final 
form of any decision to be taken by the wider Commission Serv ices. It is based 
on the vertical combination of the optimal  solutions identified for each given 
(horizontal) problem theme. Whilst the IAB recommended that alternative packages of options should be compared, this has not been d one as part of the 
main impact assessment, since the influe ncing factors would generally be of a 
more political nature. Alternatives ha ve however been discussed during the 
inter-service consultation process and the main resultant changes are identified in section 6.2.  
2. P
OLICY CONTEXT , PROBLEM DEFINITION AND SUBSIDIARITY  
2.1. Policy context 
The first EU legal acts relating to public  procurement date back to the early 
seventies. The Directives establish common disciplines which regulate the way that 
CAEs organise purchasing procedures above  designated thresholds by respecting the 
principles of transparency, regularity / fair ness of procedures to ensure openness and 
non-discrimination. Through subsequent develo pments further aims were added and 
the scope was extended (e.g. ut ilities sectors, se rvices), resultin g in legislation 
intended to: 
• promote efficient EU-wide and trans- border competition for contracts; 
• deliver best value for money; and  
• Aid the fight against corruption. 
Public procurement policy has been and remains a key element of the Internal 
Market. However, a wide range of recen t reports and policy statements have 
highlighted a need to review the current  Directives. Key amongst these are: the 
Europe 2020 strategy (hereafter: Europe  2020), "A new strategy for the Single 
Market" (hereafter: Mario Monti’s report) and the European Parliament's report on 
new developments in public procuremen t (hereafter: EP Report). Responding to 
these calls, the Single Market Act (hereafte r: SMA) announced in  April 2011 that by 
the end of the year, proposals will be made for a: "Revised and modernised public 
procurement legislative framework, with  a view to underpinning a balanced policy 
which fosters demand for en vironmentally sustainable, socially responsible and 
innovative goods, services and works. This revision should also result in simpler and 
 
EN 17   EN more flexible procurement procedures for contracting authorities and provide easier 
access for companies, especially SMEs" .  
2.1.1.  Scope of the review and this impact assessment 
This impact assessment will analyse the specific challenges which public 
procurement policy faces today and expl ore possibilities to adapt and support 
Directives 2004/17/EC (hereafter: the Utili ties Directive) and 2004/18/EC (hereafter: 
the Classic Directive) in order to better respond to its current objectives and new 
challenges. The Remedies Directive (2007/66/EC)9 and the Directive on Defence and 
Sensitive Security procurement (2009/81/EC)10 are not included in this review. 
Equally, concessions are addressed thr ough a separate initiative and impact 
assessment. A future impact assessment will consider the access of third country 
companies and goods to the EU public procurement markets. It should also be noted that the scope of any possibl e legislative change analysed here may be affected by 
constraints arising from both existing a nd future EU international commitments 
defined in the Government Procurement Ag reement (hereafter: the GPA) and other 
bilateral agreements.  
2.1.2.  Overview of legislative framework  
The first public procurement Directive ( 71/305/EEC) coordinated the procedures for 
the award of public works contracts. Over tim e, the field of application has gradually 
increased to include services and goods as  well as procurement in certain utilities 
sectors and has been compleme nted by flanking measures to ensure that the rights 
given to firms by the EU rules were obser ved (i.e. the Remedies Directives). The 
most recent reforms took place in 2004 and were intended to simplify and modernise the framework. Public procurement legisl ation is supplemented by rulings by the 
European Court of Justice (hereafter: ECJ) . The EU is also party to a range of 
international agreements, most importantly, the GPA. For further detail on the public 
procurement legislative framework, see: section 8.2.4). 
2.2. Background 
2.2.1.  What is public procurement? 
Public procurement is the process used by government institutions and public sector 
organisations to buy supplies, services and public works. Some key elements of the 
process are highlighted in Figure 2) below. 
                                                
 
9 Directive 2007/66/EC relates to the procedures that a business can follow if they consider a contract has 
been awarded unfairly 
10 Directive 2009/81/EC covers the rules for the proc urement of arms, munitions and war material (plus 
related works and services) for defence purposes.  
 
EN 18   EN Figure 2): Public procurement rules – overview of general principles  
 
2.2.2.  Nature and size of the market concerned 
Government expenditure is a significant and influential factor in the economy - over 
€2,200 billion11 (19% of EU GDP) is spent a nnually by different levels of 
government (central, sub-central, bodies governed by public law) to procure goods, 
works, and services. Almost a fifth of this  total is spent on purchases whose value 
exceeds certain thresholds12 and which should therefore be awarded according to the 
rules set out in the public procurement Dir ectives. In 2009, the value of the contracts 
governed by EU public procurement ru les was approximately € 420 billion13 (3.6% 
of EU GDP). Of this total, approximat ely 39% (approx. € 165 bill ion) was spent on 
works, 38% was spent on services (approx. € 160 billion) and 23% on goods (approx. € 95 billion)
14.  
                                                 
11 See: Table 17) in section 8.2.1). 
12 See: Tables 21 and 22) in section 8.3.1).  
13 See: Table 18) in section 8.2.2). 
14 See: sections 8.2.1) and 8.2.2). 
 
EN 19   EN Figure 3): Estimated value of tenders pub lished in OJ/TED by EU MS in € bn  
Value
319.87377.06 367.2392.42420.44
050100150200250300350400450
2005 2006 2007 2008 2009  
Source: DG MARKT estimates based on OJ/TED data 
Transparency in these markets is impr oved by the publication of a variety of 
standardised notices relating to contracts in OJ/TED15. This single point of access 
makes information on contracts above the EU thresholds easily available to any 
interested company. The two most importa nt notices are the: Contract Notice 
(hereafter: CN)16 which contains information on possible contracts and details how to 
bid; and the Contract Award Notice (hereaf ter: CAN) which provides details of the 
award process and winner. Significant impr ovements have been observed in the 
transparency rate over the last five years - the ratio of CANs published relative to the number of CNs has grown from 60% to almost 90% (see: Figure 4). 
Figure 4): Number of CNs and CANs published in OJ/TED in 2005 -2010 by EU MS 
7781388915115738127347138021143782
126897133147142025150282153783161733
700008000090000100000110000120000130000140000150000160000170000
2005 2006 2007 2008 2009 2010CANs
CNs
 
                                                 
15 TED is the online version of the 'Supplement to  the Official Journal of  the European Union'. 
16 Also sometimes referred to as  an Invitation to Tender (ITT). 
 
EN 20   EN Source: DG MARKT estimates based on OJ/TED data 
On average between 5 and 6 offers are submitted for each CN published in OJ/TED, 
meaning that firms prepare an estimated 870,00017 offers each year. The open 
procedure remains the most commonl y used procedure, accounting for 
approximately 73% of all CANs but only 52% of published value. The second most 
popular procedure is the restricted, which is  used in contracts of much higher value 
(9% of CANs, 23% of the total value).  
An increasing trend to aggreg ation has also been observe d. Strong growth in the use 
of framework agreements means that  in 2006-2010 they accounted for around 11% 
of the number of transactions and 17% in value terms. The various forms of joint purchasing
18 accounted for just 4% of number of  contracts, but are worth 12% of the 
total value19. 
Figure 5): Procedures by use and value in 2006-2010 in percentages 
73%
52%9%
23%8%14%7%5%2%2%0%4%
0%10%20%30%40%50%60%70%80%90%100%
 Number ValueCompetitive dialogue 
Accelerated procedures
Negotiated without
publication 
Negotiated
Restricted
Open 
 
Source: PwC study 
These budgets are managed by over 250,000 CAEs, which vary signif icantly in size 
and possess different admini strative capacities. The organi sation of procurement, and 
notably the extent of centra lisation/decentralisation, vari es considerably across MS, 
generally reflecting the way public  administration is organised. 
                                                 
17 161,733 CNs published in 2010 * 5.4 bid per offer. 
18 Including formally established Central Purchasing Bodies (hereafter: CPBs), but also various less 
formal forms of cooperative purchasing. 
19 " Public procurement in Europe – Cost and effectiveness", PwC, London Economics, Ecorys, March 
2011 (hereafter: PwC study), page 22. 
 
EN 21   EN 2.3. Problem definition 
2.3.1.  Key problems and problem drivers 
The evaluation of the Directives confirms th at they have encouraged a high level of 
competition, enhanced transparency in public procurement markets and achieved measurable savings, generating associated  increases in employment and GDP of 
between 0.08-0.12% after one decade (164-240,000 jobs
20). However, the evaluation, 
taken together with other recent informati on and the results of the GP consultations, 
points to three areas where there may be oppor tunities to improve further the existing 
public procurement environment and enable the full potential of the Internal Market for public procurement to be realised. Thes e three areas and their associated problem 
drivers are presented below
21: 
(1) Sub-optimal cost-effic iency of procurement 
Overall it appears th at the cost-efficiency  of public procurement procedures is sub-
optimal . This is driven by the following issues: 
(a) Disproportionate procedures defined in the EU rules, which 
generate excess costs (especially  for smaller contracts). CAEs 
generally consider that costs are higher for procedures above threshold 
compared with below. A clear majori ty of respondents to the GP have 
misgivings about the level of detail of the EU public procurement rules; Member States and business representatives tend to have a more positive opinion, whilst CAEs, legal expe rts, citizens and civil society 
organisations are more negative.  The typical (above threshold) 
procurement procedure costs nearly  € 28,000. This cost can be split 
between CAEs who typically have  costs amounting to € 5,500 per 
tender launched and firms whose costs are around € 3,800 per offer 
submitted
22. While larger contracts are generally associated with 
higher costs, there appears to be a substantial element of fixed costs23. 
For the low value contracts close to the threshol d of €125,000 this 
means total costs can amount to be tween 18-29% of  the contract 
value. In total, the cost for all pr ocedures covered by the Directives is 
some €5.6 billion p.a. or 1.3% of  the total valu e of contracts 
published24. These typical costs reflect also the significant 
differences across Member States  in the time taken to conduct 
procurement. There was a differenc e of 180 days between the top and 
bottom performers (MS) in terms of time taken from the dispatch of a 
CN to the award of a contract, across all procedures, (minimum:61 
                                                 
20 Based on an estimate of savings of 5% realised  for the €420 billion of public contracts which are 
published at the EU level would translate into savings or higher public investment of over €20 billion. source: the Evaluation Report. See: L.Vogel, "Macroeconomic effects of cost savings in public 
procurement" Economic Papers 389, 2009. 
21 The problem drivers are highlighted in bold. For more detailed discussion of these drivers, see: annex 
8.3. 
22 See: section 8.8.4. 
23 PwC study, page 91, "It turns out that procuremen t costs are almost invariant across a wide range of 
contract values." 
24 Source: PwC study, page 89. 
 
EN 22   EN and maximum:241 days). There is al so considerable support among 
stakeholders for measures to alleviate administrative burdens related to the choice of bidder e.g. reduc ing the evidence required from 
bidders. Whilst much of this docum entation is specified under national 
legislation, the EU could set stri cter limits on the documents which 
can be requested. 
(b) Complex EU rules defining scope and coverage  which generate 
uncertainty , lead to risk-averse  and 'box-ticking' behaviour  by 
public purchasers to the detriment of the quality of procurement outcomes. The EU provisions lay down prescriptive requirements governing the organisation of pro cedures, subsequent communication 
with all participants and the running of the evaluation of tenders. 
There are many 'grey zones' regard ing the activities covered by the 
Directives (e.g. form of public-public  cooperation) and the rules that 
apply to different types of contract. Problems are also experienced in relation to the concept of "bodies  governed by public law" contained 
within the Directives, which has resulted in a series of judgements by 
the ECJ. This is fertile ground for error and uncertainty, 'gaming' of 
the system or circumvention behavi ours. Analysis of TED data shows 
that in 30% of the CNs published a CAE classifies itself as "other" reflecting either its confusion, or a potential desire to benefit from a 
more favourable, but possibly incorrect , regime. The other side of the 
coin is that this complexity is a source of litigation risk.  
(c) The absence of clear counterparts at  national level with responsibility 
for strategic oversight of public procurement administration and the 
effective implementation of EU procurement legislation has led to the emergence of different models and  fragmented national 
procurement administration and resource dispersion, resulting in 
inconsistent application, control and monitoring across the EU.  At 
present, the EU rules do not touch on national arrangements to perform these tasks (other than  specifying some information 
requirements that Member States s hould meet). Confronted with the 
complex challenges implied by public procurement policy, some (generally smaller and newer) MS (e .g. Slovenia, Lithuania, Portugal) 
have established well resourced central procurement organisations, 
able to provide training and advice to individual CAEs. These Member States are better able to track and direct public procurement 
spend. Others have dispersed resp onsibility for the organisation of 
public procurement procedures ac ross myriad CAEs who are poorly 
resourced, entrusted with responsibility for procurement procedures on a part-time basis, and will only rarely undertake a procurement procedure following EU rules. This context is ripe for administrative 
error, and inconstant application of  the principles and provisions of 
EU law. 
25 The varied degree of professi onal procurement training 
and advice available in many countries may have resulted in errors, 
an increased risk of fraud and a less than optimal management of 
                                                 
25 Source: the Evaluation Report, page 62 and pages 95-101.  
 
EN 23   EN resources, which would leave cons iderable scope for further cost 
efficiency savings. Recent audits of projects funded by Community funds have found around 40% error ra tes due to the wrong application 
of public procurement rules and, in some instances, the incorrect transposition of the Directives into national legislation
26. Three major 
weaknesses were identified:  
• Inadequate assessment of bids; 
• Absence of tendering or aw ard of contract based on 
inappropriate procedure a nd award of supplementary 
contracts without competition; 
• Non-compliance with publication requirements. 
(d) Such errors mean that certain high value purchases are not being 
opened to EU wide competition. As a result CAEs may not be obtaining optimal outcomes. Some  businesses are being excluded 
from competing for these contracts or are not competing on an equal 
footing to others. Errors of this nature are more often related to the conduct of a procurement process and a lack of knowle dge rather than 
to the procedures set out in  legislation and therefore improvements 
could be expected as a result of better monitoring and control at 
Member State level , combined with the prov ision of greater support. 
An analysis of the infringeme nt procedures launched by the 
Commission since 2005 identified a sim ilar range of errors and issues 
to the above audits, implying that su ch mistakes are not "one-offs" but 
occur repeatedly. It is extremely unlikely that the errors identified by the Commission's audits are limited to Community funded projects. 
(2) Missed opportunities for society 
The current rules may not always allow stak eholders to make the best use of the 
resources at their disposal and/or the best (or optimal) purchasing choices. This 
generates missed opportunities for society
 which appear mainly as the result of: 
(a) Problems and uncertainty affecting the ability of purchasers to legally 
and consistently utilise public proc urement rules to achieve strategic 
policy goals27. Despite a number of communi cations from the Services 
of the Commission intended to clarify the practicalities of how to integrate other policy objectiv es when applying the public 
procurement rules
28, many stakeholders find that problems of legal 
                                                 
26 " The non-respect of public procurement rules alone accounts for 43% of all quantifiable errors and 
makes up for approximately three quarters of the estimated error rate [for the Structural Funds] ", 
source: The European Cour t of Auditors' annual report for the financial year 2009, available at: 
http://eca.europa.eu/portal.pls /portal/docs/1/ 7158724.PDF 
27 For example, addressing issues such as green public procurement or gr eater energy efficiency; 
supporting social policies such as fair trade and employment conditions; developing new, innovative products and technologies. 
28 An interpretative communication explaining how environmental considerations could be integrated 
within procurement practice (2001); The Commission Communication on Integrated Product Policy 
 
EN 24   EN certainty remain. More significantly, some consider that the provisions 
of EU directives do not leave suffici ent latitude to permit other policy 
considerations to be taken into account when  awarding contracts. 
Whilst many MS have undertaken nati onal or regional initiatives to 
achieve other policy objectives via public procurement, it is not yet 
clear how successful thes e policies have been. In some cases, where 
the integration of some strategic objectives incurs  additional costs that 
are directly linked to the life-cycl e and can be reliably estimated and 
verified, they can be evaluated through the use of economically most advantageous tender (EMAT) crit eria using a well understood life 
cycle costing methodology. There is, however, considerable difficulty 
in evaluating the trade-off between some other strategic objectives and 
value for money in other cases, where there may be no widely agreed or reasonable method of estimating, verifying or comparing the actual 
additional costs involved.  
(b) Inflexible procedures, defined at EU level, that do not allow CAEs to 
make the best use of non-standard procurement solutions (e.g. 
purchasing innovative goods and services
29, ability to integrate other 
strategic goals, etc). As a result, many respondents to the GP call for 
more flexibility in the conduct of  procedures (with suggestions 
including: greater ability to negot iate; a less rigid sequencing of 
examination of selection and award criteria; ability to take into account previous experience with a bidder
30, greater use of life cycle 
costing approaches, etc.) A clear majority of respondents advocate 
further promoting and stimul ating innovation through public 
procurement. The impact of green procurement in three major areas which offer the greatest potential environmental benefit (as covered 
by the current defined Green Public  Procurement (GPP) criteria) - 
construction, transport and IT equi pment - would extend to contracts 
worth more than €100 billion.
31 Socially responsible criteria could be 
relevant to at least all works and service contracts or some 77% of 
above threshold procurement. 
(c) Risk averse behaviour by authorities afraid of litigation (legal 
uncertainty) – there is some evidence that CAEs apply the full EU rules, when they might not have to, out of fear that their interpretation 
of the applicable regime could be wrong. For example, 18% of all contracts published in OJ/TED are below threshold, but have 
nonetheless been subjected to th e full procedure applicable to 
contracts above the thresholds. Also  around 7% of transactions which 
                                                                                                                                                        
 
(2003); A handbook on environmental public procurement (2004); The Commission Communication on 
the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan (2008), A 
Guide to Taking Account of So cial Considerations in Public  Procurement (2010), etc.  
29 A lack of flexibility has been linked to reasons which prevent CAEs from taking advantage of more 
innovative commercial offers; source: " The impact of EU procurement legislation on councils ", Local 
Government Group (UK), December 2010 page 13. 
30 The current Directives permit two award criteria: the use of lowest price or economically most 
advantageous tender (hereafter: EMAT). 
31 Evaluation report page 77. 
 
EN 25   EN follow the full regime related to services are actually B services which 
should have followed a lighter regime. Similarly, many authorities have not considered switching to e-procurement as they are uncertain of what it means and fear that any errors they commit would result in 
legal proceedings being brought by firms
32. Many smaller CAEs will 
never have awarded a contract abov e the thresholds and without this 
experience or appropriate legal resources, they will be extremely aware of the dangers of getting it wrong when they do so for the first 
time.  
(d) Insufficient instruments at (national and) EU level to efficiently 
protect against possible violations of public procurement law, which 
may generate less favourable out comes. Again, the different 
governance models and administrati ve capacities developed by MS 
may be affecting the timely identif ication of and reaction to possible 
bad practices
33. Several respondents to the GP suggested that there 
was a need to build additional competence amongst CAEs and improve monitoring arrangements. 
(e) Due to a combination of these two problems (sub-optimal cost-
efficiency of procurement and misse d opportunities for society) it is 
not possible for the economy in general to obtain "best value for money", a key public procurement objective.  
(3) National rather than European public procurement market 
Despite nearly 40 years of pub lic procurement legislation one of the key objectives – 
the creation of a single market - has ye t to be achieved. The evaluation found that 
direct cross-border procurement accounts fo r 1.6% of awards or roughly 3.5% of the 
total value of contract awards published in OJ/TED during 2006-2009
34 and that 50% 
of contracts above EU thresholds are awarded within the distance of 100 km35. 
Indirect cross-border procurement through s ubsidiaries or foreign affiliates makes up 
another 11.4% of awards or 13.4% by value, but in many respects, public 
procurement markets remain national rather than European36. 
In particular, this lack of integration is affected by: 
(a) A lack of convergence in the rule s concerning the integration of 
strategic goals in public procurement . The 2004 Directives allowed 
strategic and environmental crit eria to be taken into account; 
                                                 
32 Source: the Evaluation of the 2004  action plan for e-procurement and findings from the open hearing 
held in Brussels on 26 November 2010. 
33 A recent impact assessment carried out for DG HOME found that whilst only a small proportion of total 
corruption costs (estimated across the EU to amount to 1% of EU GDP) can be attributed to public 
procurement, it also estimated that in one MS, the cost of organised public procurement corruption in 
terms of fiscal and public welfare loss accounted for around "€ 0.7 billion losses to public procurement 
misappropriations in 2007-2008".  
34 Source: " Cross-border procurement above EU thre sholds", Rambøll Management, May 2011 
(hereafter: Rambøll study ), page 38. 
35 Source: Rambøll study, pages 39 and 80. 
36 See sections 8.3.4.1 to 8.3.4.3. 
 
EN 26   EN subsequent EU action has concentr ated on the provision of soft law 
measures. At present, much discretion is left at national level and even 
where similar national objectives have  been identified, they are being 
implemented through different comm itments/means and to a different 
extent across the EU. For exampl e, businesses moving between 
contracts often face different green criteria for the same product group. A certain fragmentation of th e market already exists (within 
countries as well as between. In most cases national action plans are 
recent, so the actual fragmentation is still small and the risk could still be avoided if appropria te action were taken. 
(b) Regulatory and "natural" market barriers  (e.g. requirements 
stemming from both inside and outs ide the EU Directives and other 
EU law and language, geographic location) cause asymmetric 
market access across Europe , lowering involvement of SMEs in 
particular, and cross-border procur ement in general. As mentioned 
above, procurement contracts awarded directly across borders are still 
limited. This can be explained by both supply and demand factors. 
Low levels of import penetration may be due to the composition of 
public demand, which is dominated by services that are sourced locally. However, recent survey da ta shows that companies are also 
reluctant to tender cross-border. In  a recent large scale survey around 
73% of firms, otherwise active in p ublic procurement, said that they 
have not made any cross-border te nders in the last three years
37. The 
fact that the average success rate when bidding abroad is lower than when bidding at home may go some way to explain this behaviour. 
Additionally, a recent survey highlig hts inertia/lack of experience and 
language barriers as the two main obstacles preventing cross-border 
bidding, whilst legal barriers were ranked fourth
38. Some of these 
issues are technical and result fr om a certain lack of recognised 
standards e.g. electronic  signatures. The most  significant factor 
affecting SME participation is the si ze of a contract – SMEs do not the 
resources or capacity to bid for or fulfil requirements of large public 
contracts and in general, contra cts above €300,000 seem to be beyond 
their capacity (50% of contracts are below €390,00039). Both SME 
and cross-border bidders are also hampered by certain administrative requirements (e.g. provision of evidentiary documents, where the EU legislation outlines the key ty pes of document but where many 
additional requests are added at national leve l) and problems in 
obtaining information. 
(c) The fact that public procurement markets are not fully integrated is 
also a source of missed opportunities for the wider economy
 – the 
counterfactual, as discussed in the late eighties, was that " the failure to 
                                                 
37 Source: Rambøll study page 87.  
38 The share of SMEs winning public procurement contracts has not changed significantly since 2002; in 
2006-2008 they won between 58-61% of above threshold contracts, representing between 31-38% of the total value of contracts – source: " Evaluation of SMEs access to public procurement markets in the 
EU", GHK, September 2010 (hereafter: GHK study), page 22. 
39 Source: PwC study page 91. 
 
EN 27   EN achieve a single market has been costing European industry dearly in 
unnecessary costs and lost opportunities "40. Although savings have 
been achieved since then, Europe 2020 and Mario Monti's report both point out that much more could s till be done. Strictly comparable 
figures are not available but the fi gures for total public sector import 
penetration remained 11 percentage points below private sector import 
penetration between 1995 and 2005. Some but not all of this may be accounted for by the structure of public sector demand or natural barriers. 
(d) Taken together, these three key problems lead to the conclusion that 
the Internal Market is  not achieving its full  potential in public 
procurement.  All three problems are important and affect the 
functioning of the Internal Mark et in different ways, making it 
difficult to identify one of them as the primary issue to be addressed.  
2.3.2.  Graphical representation of problem drivers 
These three main problems might be gene rated by various factors related to the 
functioning of public procurement regime (e.g. procedural issues, policy choices, 
market failures, etc). The problem drivers iden tified above as the origin of these three 
key problems have been grouped under  the following five headings: 
– Scope and coverage of public procurement rules; 
– Procedures; 
– Strategic public procurement;  
– Access to public procurement markets;  
– Governance (MS administrative organisation). 
Relationships between these problems and relevant drivers are summarised 
graphically in the problem tr ee (Figure 6) below. Further detail and information on 
the problem statement and driver s is provided in section 8.3). 
                                                 
40 " Europe 1992 - The overall challenge ", Commission of the European Communities, SEC (88) 524 final, 
Brussels, 13 April 1988. 
 
EN 28   EN Figure 6): Problem tree for the modernis ation of public procurement Directives 
 
 
EN 29   EN 2.4. How would the problem evolve, all things being equal? 
If no changes were introduced, the current trends in transparency and competition 
would probably remain high and could even increase slightly, with an associated 
“knock-on” benefit to prices. However, desp ite these positive influences, some less 
promising developments could be expected. 
– The current scope  of the Directives captures cert ain categories of transactions, 
actors or markets for which such rules may not be proportionate or productive 
(e.g. contracts relating to arrangements between two public entities or low 
value contracts). Continuing this appro ach would prolong uncertainty about the 
treatment of certain common forms of procurement (public-public co-
operation, shared services etc). Conti nued uncertainty ab out the scope of 
application could also resu lt in the non-application of  procurement disciplines 
to certain markets or transactions where they would be  appropriate (by 
allowing circumvention behaviour  or maintaining loopholes).  
– If no change is made to the existing procedures , any disproportionate costs of 
procedures (especially for lower value c ontracts) would persist. The continuing 
lack of flexibility for CAEs and fi rms could get worse, as could the 
consequences if they become more frus trated by their inability to adapt to 
changing markets or incorporate strategic criteria. This could ultimately result in lower compliance rates. Also, no in creased take-up of e-procurement could 
be expected. If no improvements or clarification of rules defining the 
aggregation of demand (e.g. CPBs, framework agreement, DPS) are introduced, lost opportunities (for example due to savings that could have been 
generated because of the economies of scale) would persist and accumulate.  
– The status quo would restrict the scope for CAEs to use public procurement to 
achieve strategic  goals. Within the limits imposed by the legislation, MS 
would continue to implement uncoor dinated national action plans or 
approaches, with the associated risks of creating legal or  policy barriers to 
cross-border procurement. 
– The current rates of cross-border and SMEs access  have been stable for the 
past five years or so and are unlikely to change if no action is taken. Similarly, 
there would be no real incentive to change the different models for governance , leading to a perpetuation of the cu rrent level of procedural failure, 
missed opportunities and sub-standard proc urement administration in those MS 
which do not, of their own volition, take  steps to overhaul their national 
procurement administration.  
To conclude, if no action is taken in the five above me ntioned problem areas, cost-
inefficiency will at best stay as it is, and could even deteriorate.  The fear of litigation 
which has lead to a tick-box approach to compliance, rather th an outcome driven 
could further increase costs and conti nue the trend of legal uncertainty. 
Administrative costs that are the so urce of missed opportunities for society41 would 
                                                 
41 For example, administrative costs borne by busine sses due to an obligation to provide documents and 
certificates during public procuremen t procedures would accumulate (all bidders). Usually, four out of 
 
EN 30   EN continue. Sub-optimal choices, particular ly in strategic terms, would continue  due to 
limits on, and inconsistencies in, approaches, which could also prevent convergence. 
Markets would continue to remain predominantly national  and hence it seems 
reasonable to assume that the full benef its of the Internal Market for public 
procurement would not be achieved.  
2.5. The EU's right to act and justification 
The EU competence to take action on public  procurement matters comes from the 
articles of the Treaty on the Functioning of the European Union (TFEU). Whilst this 
Treaty does not contain any sp ecific provisions regarding pu blic procurement, it lays 
down the fundamental principles which are generally applicable and which have to 
be observed by contracting authorities and entities when awarding all contracts. 
These principles are: the freedom of movement of goods (Article 34 et seq  TFEU ), 
the freedom to provide services (Articles 56 et seq. TFEU) and the freedom of 
establishment (Articles 49 et seq. TFEU).  
Finally, the right of the EU to act is al ready established by th e existence of the 
Directives. Given that many of the problem s identified above are the result of actions 
and interpretations resulting from these Direc tives, it follows that the EU level action 
is required to address these issues. 
3. OBJECTIVES  
The evaluation finds that the general object ives of existing public procurement policy 
are still relevant. Inde ed, given the current st rained public finances, they may be even 
more relevant since they seek to ensure that public procurement policy fulfils its potential and delivers value for money to society. As a result of the issues identified in the problem statement, the following object ives have been identified for the three 
different hierarchical le vels (i.e. general, spec ific and operational).  
3.1. General objectives 
The evaluation shows that the overall obj ectives of existing public procurement 
policy are still relevant. Ind eed, given the current strained  public finances, they may 
be even more relevant give n that that they seek to: 
– Promote EU-wide and cross-border competition for contracts (i.e. creating a 
fair / non-discriminatory and level playing field for all suppliers, so that the EU 
public procurement market is accessible to companies from across the EU); 
– Deliver best value for money whilst ach ieving the best possible procurement 
outcomes for society (and hence, ultimat ely, making the best use of taxpayer's 
money);  
– Aid the fight against corruption. 
                                                                                                                                                        
 
five bidders are not successful, so the time and effort that they i nvested in fulfilling administrative 
requirements is basically lost for the economy. Sim ilarly, time and cost spent currently by firms and 
CAEs on fulfilling publication requirements (filling in th e standard forms) would continue to be high, if 
no simplification measures are implemented.  
 
EN 31   EN 3.2. Specific objectives 
Given the problems outlined in  Section 2.3 above (Problem definition), the specific 
objectives identified for this intervention are to:  
– Improve the cost-efficiency of EU pub lic procurement rules and procedures;  
– Take full advantage of all opportunities to deliver the best possible outcomes 
for society; 
– Create European rather than national markets for procurement. 
3.3. Operational objectives 
Five different problem themes have been  highlighted. To address these individual 
themes and deliver focussed solutions, th e following operational objectives have 
been set: 
1. Scope and coverage 
– Ensure that the rules capture the appropriate actors and subject-matter of 
procurement; 
– Provide clarity and legal certainty with  respect to said scope and coverage. 
2. Procurement processes/procedures 
– Streamline and simplify procurement pro cedures to (i) reduce operational costs 
(ii) ensure proportionality and (iii) provide for more legal certainty;  
– Improve the flexibility of procedures to  better respond to purchasing needs of 
authorities.  
3. Strategic public procurement  
– Help public procurers to use public procurement to support other policy 
objectives (e.g. environmental, social, initiatives relate d to the innovative 
economy) in a legally compliant and fair manner. 
4. Market access 
– Simplify the rules and introduce instrument s to increase the tr ansparency of EU 
public procurement rules and open-up the markets to greater cross-border competition;  
– Ensure that the rules facilitate participation by SMEs. 
5. Administrative organisation 
– Ensure consistent application, controls  and monitoring of public procurement 
policy and outcomes across MS;  
 
EN 32   EN – Reduce errors and problems with co mpliance with EU public procurement 
rules. 
The table presented in section 8.4) summar ises the different levels of objectives 
which have been identified, mapping th em to the three key problems and the 
associated problem drivers which have been  identified. It is clear that there are 
tensions between these objectives, and as a re sult, certain trade offs will need to be 
considered42. The content of any amended rules and the concrete measures proposed 
should aim at making life easier for CAEs and firms whilst at the same time continuing to guarantee a high level of tr ansparency and efficient safeguards for 
equal treatment of bidders. These tensions and trade-offs will be highlighted further in the discussion of impacts presented in chapter 5. 
4. P
OLICY OPTIONS  
The problems identified above manifest themselves in many and diffuse ways. 
Tackling them comprehensively could enta il a large number of  changes affecting 
many different aspects of the legislation. The GP invited stakeholder comment on 
approximately 120 adjustments to the curren t legislation. This chapter proposes an 
approach for structuring this extensive se t of possible adjustme nts under a number of 
options which will then be analysed in chapter 5.  
Before considering the range of possible concrete adjustments to the Directives 
Section 4.1 presents some more radical optio ns – including outright abolition of the 
Directives or the application of fully ha rmonised rules to a larger set of public 
purchasing procedures including some  below-threshold procurement.  
4.1. Radical options 
When initially considering all the possible alternatives, four broad types of action 
were identified. At one extreme, consid eration was given to abolishing the EU 
directives, whilst action at the other end of the spectrum would lead to full harmonisation or the creation of a singl e, pan-European system for public 
procurement. In between these two extremes  fall two other categories of action: to 
keep the Directives as they are (no change) or to introduce changes within the current framework (some change). This section cons iders the two radical options - abolition 
of the Directives and full harmonisation.  
4.1.1.  Abolition of the Directives 
One radical option would be to abolis h the existing EU public procurement 
legislation and apply only the principles identified in the TFEU (i.e. move to a 
"principles based" set of procurement rules). However, the evaluation found that whilst improvements were possible, the Direc tives deliver benefits that significantly 
outweigh costs. The transparency and pr ocedural regulation introduced by the 
                                                
 
42 For example: simplifying the rules and procedures s hould not jeopardise essential guarantees for the 
open and free access of all European firms to public c ontracts in Europe. Depend ing on how it is done, 
the integration of wider policy objectives could lead to further checks and considerations which might, 
at least at first glance, complicate the ru les or the process of their application. 
 
EN 33   EN Directives have boosted competition, whic h in turn has yielded the hoped for 
improvements in procurement outcomes (bot h savings and qualitative performance). 
The Directives are conservatively estimat ed to deliver cash savings of around €20 
billion on the €420 billion advertised in accordance with the Directives. The total 
cost for purchasers and suppliers of orga nising public procurement procedures in 
compliance with the requirements of the legislation is around €5.6 billion per annum 
– and we estimate that 2/3 of this cost would remain even if the Directives were abolished. Therefore, the a bolition of EU public procur ement legislation would be 
self-defeating. Removing the Directives woul d also create a "vacuum" in relation to 
the EU's international obligations. Each MS is a signatory to these treaties and would 
have to individually put in place measures to comply with the conditions to which they have agreed.  
Many of the varied stakeholders at the Conference on 30 June  commented that " the 
Directives have proved their worth ", whilst nonetheless going on to identify areas for 
further improvement. Although not an explicit  question in the Green Paper, it could 
be inferred from many replies that su ch an approach was not supported.  
In view of the above, this option has not been considered further. 
4.1.2.  Full harmonisation 
An alternative broad approach would be to  propose a full harmonisation of the public 
procurement rule-book across the EU. This c ould entail deeper and more prescriptive 
harmonisation of the current ru les which currently leave considerable latitude to MS 
regarding their implementation. It could al so entail extension of EU procurement 
procedures to some of the estimated 2 million public procurement procedures for purchases below the thresholds of the Di rectives (an action likely to prove unpopular 
with stakeholders, even if  a majority of GP respondents recognised a need for 
additional guidance on below threshold proc urement). This could ensure greater 
consistency and legal certain ty, increase transparency, and increase the leverage 
effect of EU procurement legislation in support of other policy goals. It would 
however run directly counter to the concer ns regarding the over-intrusiveness of EU 
regulation and disproportionate costs re sulting from the imposition of strict 
procedural disciplines. Moreove r, it is not clear to what  extent such an approach 
would yield countervailing bene fits given the limited cro ss-border interest in small-
value procurement procedures.  
Given that this approach would exacerbate  some of the critical problems identified 
above without a strong probabi lity of delivering compensating benefits, this option 
has not been considered further.  
4.1.3.  Conclusions on radical options 
Neither of these radical options is examin ed further since this initial analysis 
suggests that the disadvantages w ould clearly outweigh any benefits. 
 
EN 34   EN 4.2. Development and screening of possible options 
The rest of the Impact Assessment analysis  will concern itself with policy options 
ranging from "no change", through a menu of  options which vary in terms of the 
level of change to the current legislation.  
In impact assessment terms, an option is defined by its content e.g. possible action(s) 
and the means by which that content will be  delivered e.g. soft law, legislative 
change. This section summarises how the options / option packages presented in Tables 2 to 6 were constructed.  
4.2.1.  "No change" options 
Preserving the current situation would perp etuate a system that gives rise to 
unintended consequences, missed opportunitie s and high costs. However, this 
solution can only be finally ruled out af ter measuring the impacts of any other 
proposals against the baseline of doing not hing. It could yet be possible that the 
status quo provides the best so lution for a particular problem area. Hence five no 
change options have been defined – for scope, procedures, stra tegic procurement, 
access and governance. The consequences of  following this course of action are 
discussed in more depth in section 2.4. 
4.2.2.  Non-legislative / soft law options 
Non legislative approaches may constitute  a viable and proportionate response to 
certain issues. There may be possibilities for soft-law solutions providing further 
guidance and explanation on pa rticular aspects of the ex isting rules. For example, 
benchmarking and best practice sharing betw een MS may be an effective means of 
improving public procurement administration and practice.  
4.2.2.1.  Narrowing down the soft law options 
Considerable guidance has already been provided addressing many aspects of the 
Directives. The Commission services have  also provided additional training and 
assisted in the development of training related to the existing public procurement 
rules. Some of the main initiatives and documents are listed in the following box. 
Interpretative documents, guidance and so ft law relating to the implementation 
of EU public procurement legislation: 
Interpretative Communication on "Community  law applicable to public procurement 
and the possibilities for integrating envi ronmental considerations into public 
procurement” (COM(2001) 274); 
Buying Green! – A Handbook on environmental public procurement (2004); 
"Buying Social - A Guide to Taking Account of Social Consider ations in Public 
Procurement" (SEC(2010) 1258 final); 
"Guide to the app lication of the European Uni on rules on state aid, public 
procurement and the internal market to services of gene ral economic interest, and in 
particular to social services of general interest" (SEC(2010) 1545 final); 
 
EN 35   EN Interpretative Communication on the Community law applicable to public 
procurement and the possibilities for integr ating social consider ations into public 
procurement (COM(2001) 566 final); 
Pre-commercial procurement “Pre-comme rcial Procurement: Driving innovation to 
ensure sustainable high quality public  services in Europe” (Commission 
Communication – 2007); 
Risk management in the procurement of innovation - Concep ts and empirical 
evidence in the European Unio n, Expert Group Report 2010 (24229 EN), 
Directorate-General for Resear ch, European Research Area; 
E-procurement: functional requiremen ts for conducting electronic public 
procurement under the EU framework, January 2005, produced by European 
Dynamics S.A. on behalf of  the European Commission; 
http://ec.europa.eu/idab c/servlets/Doc1ad3.pdf?id=22191 
While this guidance has helped to clar ify how the existing provisions can be 
implemented, it cannot compensate for gaps or  shortcomings in the legislation. Many 
of the problems in these areas stem from th e absence of a sufficient legal treatment of 
the issues, or restrictive provisions which prevent authorities from pursuing 
alternative policy approaches (e.g. as it is  the case for some potentially legitimate 
approaches for strategic procurement). By their very nature, interpretative documents 
or guidance cannot overcome problems whic h are inherent to the current legal 
framework. After considering in more detail the possible content of the five soft law 
options initially identified, it was decided th at no significant bene fits were likely to 
be achieved through the provisi on of further guidance/trai ning/clarification in the 
areas of Scope, Procedures and Strategic pr ocurement. Thus only soft-law options for 
Access and Governance will be considered further.  
4.2.3.  Framing the legal options  
The two recent GPs on public procurement asked over 120 questions, each relating to 
a potential issue for modificat ion or inclusion. Whilst very extensive, these two 
consultations were not necessarily exha ustive. Further concerns or areas for 
improvement were identified  through the evaluation and other independent sources 
and reports.  
Even after grouping together similar/related questions an d issues over 70 possible 
changes to the Directives have been iden tified, which are listed in full in section 
(annex) 8.5.  
A detailed and separate analysis of all th ese possible changes to the Directives would 
not be proportionate. It is not possible to undertake a meaningful analysis of the 
impacts of each and every legislative adju stment that could be envisaged, on the 
basis of existing information, with the resources availabl e and within the guidelines 
for impact assessment reports. The subsequent sections of this chapter explain in two 
steps the approach followed to permit a concrete assessment of such a wide number of different possible concrete changes to the Directives.  
 
EN 36   EN Step 1: Framing the critical strategic options 
The principal changes, identified thr ough consultations and evaluation, are grouped 
in terms of their relevance in tackli ng the key problems described above. These 
strategic options centre on the critical choi ces to be made in terms of the ambition 
and impact of the legislative change, a nd the degree of change compared to the 
existing legislation. This l eads to a menu of options fo r each problem area, ranging 
from 'soft law' through evolutionary/incre mental legislative change to a more 
fundamental departure from the current scope  or regulatory approach. These strategic 
options are mapped out in tables 2 - 6. 
Two broad categories of legislative change  have been identified, reflecting the 
different levels of ambition possible. In ge neral, the first legislative option presented 
considers changes and improvements, wh ich build on current principles and 
provisions (i.e. the left-hand side column  under LEGI options). Such actions would 
clarify existing legislation or introdu ce new possibilities, but not constitute a 
fundamental change to the scope or appro ach. In broad terms, stakeholders would 
continue to operate within a familiar fram ework. This corresponds to an incremental 
evolution of existing principles to res pond to changing market conditions or new 
policy challenges. 
The second legislative option for each pr oblem area considers changes which seem 
more fundamental in nature compared to the approaches within public procurement 
legislation until now (i.e. the right-hand side column under LEGI options). Such options consider more prescriptive action e.g. making compulsory a certain type of 
purchase or behaviour on the part of CA Es (e.g. moving away from "how to buy" 
and considering "what to buy") or actions  which entail a departure from core 
principles of existing legislation (e.g. th at recourse to negotiated procedure is 
exceptional). The classification of a particular  legislative adjustment in one or other 
category is based on an a ppreciation by DG MARKT of how radical a change is, in 
relation to both the current and previous acquis. The evaluation of options will 
abstract from the precise form of the legi slative instrument at this stage. Further 
discussion of the regulatory form  is provided in section 5.6.  
Step 2: Identification of headline actions under each legislative option for deeper 
analysis 
Once this grouping was establishe d, we have identified with in each strategic option, 
one or two headline actions from the fu ll menu of actions. The headline actions 
identified are expected to be the most significant changes under each option and the 
ones most deserving of deeper analysis in  terms of the expect ed impacts in the 
subsequent chapters. 
The "headline actions" have been sele cted from the extended list of around 70 
possible changes after assessment against the fo llowing criteria (the results of this are 
set out in annex 8.5): 
– Economic impact, in the sense of the size of the market affected and the 
potential change to the transaction pr ocess (scored 1 – 5, where 1 was Low, 
and 5 was High);  
 
EN 37   EN – Relevance to tackling implementation problems with the EU legislation 
(identified in chapter 2);  
– Ability to improve the functioning of  public procurement markets (scored 
High, Medium, Low); 
For each action, the balance of  stakeholder opinion, as e xpressed through responses 
to the GP, is also presented. (Annex) 8.6 pr ovides a more detailed description of the 
content of each headline action. 
The analysis of the impacts in subsequent  chapters will refer primarily to the 
expected impacts of the headline actions. The discussion will therefore be framed 
primarily in terms of these measures, but the analysis and reflections will provide a basis for drawing general conclusions on the critical choice and the related issues.  
The following acronyms are used to describe  the legislative options discussed: 
SCO.LEGI.TARGET: targeted adjustme nts & clarification of boundaries under 
Scope 
SCO.LEGI.REDUCE: signifi cant reduction of Scope 
PRO.LEGI.DESIGN: improve  design of Procedures 
PRO.LEGI.FLEXIB: increase choice av ailable to CAEs in Procedures 
STR.LEGI.FACILIT: facilitate Strategic public procurement, leaving the 
choice of action to Member States / CAEs 
STR.LEGI.ENFORC: enforce Strategic public procurement at an EU level 
ACC.LEGI.FACILIT: facilitate Access to EU public procurement markets 
ACC.LEGI.ENFORC: enforce at an EU level certain tools for Access 
GOV.LEGI.TARGET: optimise the use of resources to improve Governance 
GOV.LEGI.ENHANC: enhance control & responsibility to improve 
Governance 
 
EN 38   EN 4.2.4.  Detailed mapping of options 
Table 2): Scope 
SCO.NC SCO.SOFT SCO.LEGI.TARGET SCO.LEGI.REDUCE 
Maintain 
the status quo Guidance / 
training / clarification Critical choice: 
Targeted adjustments to current  scope of public procurement 
legislation Critical choice: 
Far-reaching change to scope of  the current rules involving 
exclusion of entire groups of purchasers or transactions. 
  Problems addressed: 
- Complex and unclear rules defining scope and coverage lead 
to uncertainty, circumvention behaviour, and arbitrary 
inclusion/exclusion of some transactions – all at margins. 
 The actions under this option should simplify the identification of who and what is covered by the EU public procurement 
rules. Problems addressed: 
- Complex and unclear rules defining scope and coverage lead 
to uncertainty, circumvention behaviour, and arbitrary 
inclusion/exclusion of some transactions. 
- Application of costly regulatory apparatus to large populations of purchasers or transactions without sufficient countervailing benefit. Greater certainty and clarity should result from the exclusion 
of particular groups or purchases where there are reasons to 
doubt that the current rules should apply,  
  Headline actions(s)43: 
- Higher threshold for social servi ces , with a special regime for 
social services above this threshold  - Inclusion of all former B-services (except for social services) in the regular regime  Headline actions(s): 
- Raise the thresholds 
 
  Examples of other (possible) actions: 
- Establish conflict of laws rule  to determine the applicable 
national law and jurisdiction 
- Clarify exemptions (e.g. fo r public-public cooperation and 
other); - Clarify notion of bodies governed by public law;  - Clarify exclusion grounds.  Examples of other (possible) actions : 
- Radically modify the material scope of the Directives by 
excluding sub-central authorities;  
- Radically modify the material scope of the Directives by exclusion of B services;  - Exclude the utilities from procurement rules altogether;  - Extending scope to below thresholds procurement.  
                                                 
43 For a more detailed description of the content of each headline action, pl ease refer to section (annex) 8.6. 
 
EN 39   EN Table 3): Procedures 
PRO.NC PRO.SOFT PRO.LEGI.DESIGN PRO.LEGI.FLEXIB 
Maintain 
the status quo Guidance / 
training / clarification Critical choice: 
Correct and enhance existing procedures. Critical choice: 
Expand menu of procedural options available to public 
purchasers and alleviate procedures where they result in disproportionate costs. 
  Problems addressed: 
- Disproportionate and inflexible procedures;  - Legal uncertainty; 
 The actions proposed under this option are intended to streamline 
many of the existing provisions , reducing administrative burden, 
procurement costs, and ensuring more efficient outcomes. By 
specifying when or how a procedure should be used, concerns 
about the legal requirements a nd conditions should be addressed.  Problems addressed: 
- Disproportionate and inflexible procedures for certain types of actor; 
- Legal uncertainty;   The actions proposed under th is option should address the 
inability experienced by some CAEs to tailor procedure to 
characteristics of market or purchase, which can lead to 
inefficient outcomes. The actions should where possible streamline the process, reducing administrative burden and procurement costs and clarify exactly when or how a procedure can be used.  
  Headline actions(s): 
- Improve tools for repetitive purchasing (DPS, framework agreements, e-Catalogues); 
- Increase use of electronic communication tools (e-procurement).  Headline actions(s): 
- Greater freedom for CAEs to use negotiated procedure; - New lighter publication regime for sub central authorities 
(possibility to use the prior in formation notice as a means of 
calling for competition).  
 
  Examples of other (possible) actions: 
- General shortening of time limits for tender procedures 
- Implementing legislation to ensure open/accessible e-procurement solutions; - More flexibility in selection and award (possibility for contracting 
authorities to examine selection before award; experience of staff 
taken into account in the award phase ) - Clarification of the notion of special or exclusive rights  Examples of other (possible) actions: 
- Allow MS to eliminate the lowest price only criterion; 
- Mandatory full use of electronic communication to be phased in by set deadline; - Mandatory transmission of notices in electronic form;  
- Mandatory electronic availability of tender documents; 
- Impose fully electronic communication on CPBs. 
 
EN 40   EN Table 4): Strategic procurement 
STR.NC STR.SOFT STR.LEGI.FACILIT STR.LEGI.ENFORC 
Maintain 
the status quo Guidance / 
training / clarification Critical choice: 
Enable CAEs to frame procuremen t needs in ways that integrate 
other policy goals. Critical choice: 
Remove discretion from CAEs: they must award (all or part) 
contracts on the basis of performance in respect of other policy goals. 
  Problems addressed: 
- Legal restrictions or ambiguity which prevent CAEs from explicitly introducing performance on range of other policy into 
selection, award process or contract.  This approach would permit CAEs  to reorient spending towards 
solutions. Whilst the EU would clarify and improve the possibility to conduct strategic procurement, it would stop short of imposing 
such policy goals on MS and CA Es. It should remove legal 
uncertainty and risk which preven ts some CAEs from integrating 
their policy choices into their public procurement strategy.  Problems addressed:  
- Legal restrictions or ambiguity which prevent CAEs from explicitly introducing performance on range of other policy 
into selection, award process or contract.  This approach would ensure that public purchasing is redirected towards solutions / technologies that are more beneficial/less harmful for society as a whole. It should 
remove legal uncertainty and ri sk which prevents some CAEs 
from integrating their policy choices into their public procurement strategy 
  Headline actions(s): 
- Allow consideration of entire life-cycle costs in award criteria 
- Allow inclusion of factors directly linked to production processes in award criteria and technical specifications  
- Introduce the "Innovation partnership": a new, special procedure 
for purchases not yet available on the market Headline actions(s): 
- Introduce obligations on "what to buy" (quotas); 
- Require CAEs to use certain defined award criteria and / or technical specifications   
  Other (possible) actions: 
- Possibility for contracting authorities to explicitly require certain 
labels (certification schemes), but saf eguard that equivalent labels 
must also be accepted;  - Violation of obligations from EU  environmental or social law or 
from certain international labour law provisions = ground for 
exclusion of bidders;  
- Tenders which are abnormally low because of non-compliance with obligations from EU environmental or social law, including throughout the supply chain, must be rejected. Other (possible) actions: 
- Allow CAEs to source only from local or regional suppliers 
to limit emissions, support local culinary traditions; - Mandatory use of life-cycle costing when determining the economically most advantageous offer or lowest cost - Allow CAEs to take cons iderations having no link to 
production/performance to be ta ken into account (e.g. gender 
balance on company board); - Incentives/measures to further promote and stimulate innovation through public procurement (obligatory use of performance related technical specifications and/or variants). 
 
EN 41   EN Table 5): Access 
ACC.NC ACC.SOFT ACC.LEGI.FACILT ACC.LEGI.ENFORC 
Maintain 
the status quo Guidance / 
training / clarification Critical choice: 
Remove administrative barriers to SME participation & cross-border 
access. Adopt non-coercive measures to increase SME participation & cross-border access at reduced costs, whilst maintaining high levels of 
transparency. Critical choice: 
Introduce prescriptive measures to reserve parts of 
public procurement markets for SMEs or require structuring of purchases in way that favour SME 
participation. 
 In particular, 
possible 
training campaign on doing business 
abroad 
 Problems addressed: 
- Regulatory and administrative market access barriers leading to 
asymmetric market access;  - Insufficient participation of SMEs in public procurement markets and low cross-border participation/access. Under this option, many of the bur densome and sometimes difficult to 
fulfil (especially in the cross-border context) requirements placed on 
business would be reduced by EU level action limiting and standardising the information requested and only asking for original proof to be provided by the winning bidder. This s hould have particular benefits for 
SMEs and firms interested in bidding across borders.  Problems addressed: 
- Insufficient participation of SMEs in public 
procurement markets and low cross-border participation/access. Under this option actions would be proposed to use public spending to support diversity of the economic 
base and support start-ups and SME innovators. The 
actions foreseen here would force Member States and CAEs to take action to ensure that public procurement markets are made accessible to SMEs and non-national firms.  
  Headline actions(s): 
- Mandatory acceptance of self-declarations as prima-facie evidence for selection;  
- Introduction of a European Procurem ent passport: a standard document, 
validated at MS level, which confirms that a bidder is compliant with certain, frequently requested criteria.  Headline actions(s): 
- Impose mandatory use of lots for all above threshold contracts 
- Introduce quotas for share of procurement contracts/budget awarded to SMEs  
 
  Other (possible) actions: 
- List of possible requirements for selection of candidates made exhaustive 
- Turnover cap: CAEs may not require  that economic operators have a 
turnover greater than e.g. 3 times the contract value in order to participate 
in the procedure 
- Increased use of lots under certain circumstances  - Obligation for MS to feed e-Certis (an electronic repository of certificates required for selection criteria)  Other (possible) actions: 
- Obligation to subcontract a certain share of the main 
contract to third parties;  - Obligation to draw up tender specifications for high-
value contracts in a second language;  
- Instruments to prevent the development of dominant suppliers (e.g. obligation to cancel the procedure if only one or two valid bids received) 
 
EN 42   EN Table 6): Governance 
GOV.NC GOV.SOFT GOV.LEGI .TARGET GOV.LEGI.ENHANC 
Maintain 
the status quo Guidance / 
training / clarification  Critical choice: 
Leverage achievement of economies of scale and optimal outcomes 
for CAE through the use of specialised, professional bodies which aggregate purchasing where appropriate. Critical choice: 
Oblige MS to identify a national authority in charge of 
implementation, control & monitoring of public procurement which reports annually on performance 
 In particular, 
guidance on 
better 
monitoring and control; possible introduction 
of peer 
review and/or benchmarking (perhaps through MS 
committees) Problems addressed: 
- Different capabilities of CAEs; (possible limited improvement to the different models leading to different public procurement 
capacities developed across MS).  This option should lead to further improvements in the professionalisation of bodies which can either perform procurement 
on behalf of a CAE or offer advice. This should improve the 
consistency of application across the EU and reduce non-compliance with the EU rules. In particular, it should benefit smaller CAEs who may have little /no experience of conducting 
large procurements and following EU rules.  Problems addressed: 
- Different models leading to  different public procurement 
capacities developed across Member States;  
- Different capabilities of CAEs   Under this option the EU would oblige MS to take action to monitor and control the application of EU rules. National 
oversight bodies would be res ponsible for controlling public 
procurement, checking for and re-acting to any problems in a timely and efficient manner. This should improve the overall application of EU rules, increase consistency and ensure firms operate in a single market.  
  Headline actions(s): 
- Establish clear rules for purchases made through CPBs (inc. safe 
haven concept; small contracting authorities could transfer responsibility for procurement to CPBs). 
 Headline actions(s): 
- Obligatory designation of central national oversight body 
by Member States, with clear obligations on monitoring, enforcement and reporting. 
 
  Other (possible) actions: 
- EU definition of conflict of in terest in public procurement;  
- Safeguards to prevent, identify and resolve conflict-of-interest 
situations; 
- Better assistance to CAEs and businesses ("knowledge centres").  
 Other (possible) actions: 
- Better administrative coopera tion between MS, using IMI 
for information exchange; 
- Additional instruments to tackle organised crime in public 
procurement; - Annual report of oversight body shall include reporting on SME success in public tenders. 
 
 
EN 43   EN 4.3. Summary of options to be analysed further 
The probable consequences of the five "no change" options have already been 
presented in section 2.4. So, the next s ection will look at the advantages and 
disadvantages of the remaining 12 different  option packages in global terms, using 
the headline actions identified to discu ss the expected impacts and changes.  
This analysis may lead to the conclusion that it is not always an "either/or" choice in 
favour of one of the options. In some in stances, the best solution could combine 
different options within a particular problem group. For example, while concluding 
that the more ambitious approach is justif ied, it would also be possible to implement 
the incremental improvements in the ar eas covered by Scope, Procedures and 
Governance/administrative capacity. For St rategic procurement and Access, the 
legislative options are essentially alternat ives and address the same problems. Under 
these headings, one option rela tes to the adoption of a permissive approach (which 
enables contracting authorities to pursue certain purchasing preferences) whilst the 
other one is coercive (the revised directives would impos e an obligation on CAEs to 
favour a particular procurement outcome).  
Table 7): Summary table of retained options for the analysis of impacts (retained – marked in grey) 
Options 
Problem groups No change 
options 
(NC) Soft law 
options 
(SOFT) Legislative – generally 
within current framework 
(LEGI._) Legislative – new or 
significant change 
(LEGI._) 
Scope (SCO) SCO. NC   SCO.LEGI.TARGET 
(targeted adjustments & 
clarification of boundaries)  SCO.LEGI.REDUCE 
(significant reduction of 
scope) 
Procedures (PRO) PRO. NC   PRO.LEGI.DESIGN 
(improve design)  PRO.LEGI.FLEXIB 
(increase choice) 
Strategic (STR) STR. NC   STR.LEGI.FACILIT 
(facilitate strategic public 
procurement)  STR.LEGI.ENFORC 
(enforce strategic public 
procurement)  
Access (ACC) ACC. NC  ACC. 
SOFT  ACC.LEGI.FACILIT 
(facilitate access)  ACC.LEGI.ENFORC 
(enforce tools for access)  
Governance 
(GOV) GOV. NC GOV. 
SOFT GOV.LEGI.TARGET 
(optimise the use of 
resources) . GOV.LEGI.ENHANC 
(enhance control & 
responsibility)  
5. ANALYSIS OF IMPACTS  
In general, the most visible impacts resu lting from the options set out above are 
economic in nature. They will take the form of changes in supplier and purchaser operating conditions and behaviours with c onsequent impacts on market conditions 
(competition, transparency). In many instances, the immediate social and 
environmental impacts are limited. The ex ception is for the op tions addressing the 
problems relating to a more strategic use of public procurement policy and which are, by their very nature, intended to affect (in a positive way) the social and 
environmental impacts. None of the policy options analysed are expected to have impacts affecting fundamental rights. 
The global impacts of each option are analysed below, grouped by the five 
previously defined problem blocks. For each option, the effects on four main 
 
EN 44   EN categories of stakeholder have been identi fied – CAEs, businesses (including SMEs), 
MS and the Internal Market.  
As explained, in section 4, the impacts of every possible legislative adjustment are 
not analysed here for presen tational and feasibility reasons44. The approach adopted 
(and discussed in the Steering Group) is to concentrate on a high-level analysis of the critical policy choices that will determine th e thrust and content of the future policy 
initiative. Each of the options as framed in chapter 4) is discussed as a whole. Further 
detail is provided through analysis of th e impacts of the indivi dual headline actions.  
For these options in particular, the time period within which any changes would be 
adopted is very important. In general,  the shorter the time allowed, the more 
unfavourable the trade-off between costs and benefits
45.  
Finally, some of the measures proposed under various options discussed in this 
Impact Assessment might influence the administrative costs and burden46. The 
expected effects of such measures are su mmarised for each of the options discussed. 
5.1. Scope  
5.1.1.  Impacts of SCO.NC option 
The expected consequences of the "no cha nge" scenario are presented in section 2.4. 
5.1.1.  Impacts of SCO.LEGI.TARGET option 
Critical choice: 
Targeted adjustments to current scop e of public procurement legislation. 
Headline action(s) : 
- Higher threshold for social services, with a special regime for social services above 
this threshold; 
- Inclusion of all former B-services (except for social services) in the regular regime. 
5.1.1.1.  Impacts for CAEs 
Clearer definition of the Directives' boundaries  should make it easier for CAEs to 
identify which rules apply when they wa nt to buy something. Th is should in turn 
reduce the perceived risks and incidence of  litigation. Reducing the costs of legal 
assistance associated with avoiding (perce ived) legal uncertaint y, managing risk and 
dealing with legal chal lenges should generate budgetary savings. Around 350,000 
                                                 
44 Where data permits, more detailed analysis of  some actions is provided in section 8.7. 
45 In the very short-term transitional or switchover costs need to be absorbed by purchasers and suppliers; 
the benefits of the policy change may take longer to materialise (e.g. positive externalities following a 
shift of production technologies to more sustainable/innovative solutions in response to policy driven changes in public procurement). 
46 Recent research estimates administrative burden associ ated with the implementation of the Directives at 
€216 million, see: 8.8.56. 
 
EN 45   EN person days are spent annually across Europe on managing complaints and litigation 
for government authorities47, with an estimated associated cost of up to €54 million 
per year48. To this must be added the costs of risk-avoidance behaviour which are 
more difficult to measure. 
Clarification (through targeted  legislative intervention) of  the applicability of EU 
rules could bring valuable support to the development of  public-public cooperation in 
procurement. These types of collaborativ e purchasing between  groups of public 
purchasers (often for purposes of achieving scale or administrative efficiency) seem 
set to increase as local aut horities look for ways to optim ise the use of scarce public 
resources. Improved clarity could also help  to reduce the unnece ssary application of 
EU procurement disciplines. Many below threshold contracts are published in 
OJ/TED, sometimes because of a lack of knowledge and misunderstanding of what is 
and is not covered by the EU rules and a de sire to minimise exposure to legal risk. 
These problems may be part icularly acute for small CA Es, who may not apply such 
rules very often and as a re sult may not achieve optimal outcomes when they do. In 
2010, 14,000 local contracting auth orities published notices in OJ/TED; of these, 
over half (8,000) published only one notice in that year. It is these inexperienced and 
often under-resourced purchasers who are most  likely to suffer from lack of clarity 
surrounding the scope of Directives. 
Under this option, the current  separation of services in to two categories – A-type, 
which are assumed to be more tradable across borders and to which the full rules 
apply; and B-type which are less tradable ac ross borders and as a result, covered by a 
lighter regime - would be altered. Analysis of the classification of  services according 
to these two categories points to many errors which result in the wrong regime being applied. The catch-all category of 'other services' is unclear and consequently improperly used by CAEs resulting in non-co mpliance with the rules in over 30% of 
cases (see 8.3.1.3 for more detail). Revisi ng these lists would therefore remove 
unnecessary costs and risks curr ently faced by CAEs i.e. if they follow the full 
regime when it is not appropr iate or the light regime wh en they should be compliant 
with the full set of rules. Equally, recent re search shows that several of the B type 
services exhibit higher rates of  cross-border tradability than originally expected (e.g. 
legal services
49) and hence it would be more appropr iate and consistent to submit 
them to the same rules as A-type services.  
                                                 
47 PwC study, page 80. 
48 See: section 8.8.3. 
49 Ramboll study, page 64. 
 
EN 46   EN Table 8): Economic importance of potential intervention targets 
Intervention target Number of CANs 
removed (% of CANs ) Value of CANs 
removed (% of total value) 
All service contracts 68,000 (49%) €160 billion (38%) 
B-type service contracts 20,000 (14%) €40 billion (10%) of 
which approx. €18 billion covered by 
social services 
Source: DG MARKT estimates based on OJ/TED data 
Several "services to the person" or "social services" (hereafter: social services) are 
characterised by very low tradability50 and a general absence of cross-border 
interest51. For these services, it would therefore be appropriate to maintain a lighter 
regime. However in the interests of transparency and to ensure that potentially interested bidders are at least aware of possible opport unities, greater publication 
requirements could be introduced than currently exist. Whilst this might increase slightly their related worklo ad, such change should be offset by the increased legal 
certainty it provides in terms of the general transparency obligations that a CAE must 
meet under the Treaty.  
5.1.1.2.  Impacts for businesses (including SMEs) 
Excessive regulatory requirements and complic ated rules can be an important barrier 
in accessing public procurement markets.  Around 60% of firms consider that 
participation in EU-regulated procurement procedures is more, or much more, time-
consuming and costly than supplying the privat e sector. This is pa rticularly valid for 
SMEs. Whilst most of the changes relating to  this option would affect CAEs, a better 
definition of scope should help firms to identify confidently va lid opportunities and 
organise themselves accordingl y. It should also increase the consistency with which 
such rules are applied and ensure markets of  interest are open to firms across the EU. 
Currently, problems arise from the unclear  and sometimes arbitrary allocation of 
services between the A and B lists. Related issues arise from the "fuzziness" of the 
border-line between works and services or mixed services /works contracts. Greater 
clarity and confidence around th ese issues, coupled with in creased transparency may 
help suppliers to maximise their bidding and could even lead to greater competition 
in some areas, including social services, where increased transparency requirements could make it easier for firms to iden tify opportunities (bot h national and cross-
border). 
5.1.1.3.  Impacts on Member States 
Greater legal certainty about the rules applicable to public -public cooperation, or to 
certain common classes of "body governed by public law" would allow national 
                                                
 
50 See: section 8.7.1. 
51 For example, in 2009 only 0.1% of social services contracts were awarded cross-border. 
 
EN 47   EN authorities to implement EU legislation more  effectively, and work with CAEs to this 
end. The targeted adjustments to services a nd the creation of a new regime for social 
services should simplify the identificatio n of the rules applyi ng to a key area of 
government expenditure.  
5.1.1.4.  Impacts on the Internal Market 
Overall, we could expect that increasing th e clarity of the Directives would improve 
the functioning of the Internal Market, as  clarity improves efficiency and reduces 
regulatory burden. It would also reduce th e likelihood that risk-averse CAEs would 
follow more burdensome rules than needed.  
A review of the categorisation of services as  tradable or non-trad able could help to 
re-align the scope of the Directives to economic/commercial reality. It would also 
reduce the number of anomalies due to mi sclassification. The new, higher threshold 
for social services should ensure that such contracts remain open and transparent, where there is a probable cross-border interest
52. Increasing the number of services 
under category A would increase the markets open to third countries under the GPA; 
reciprocal changes from other partners  would then have to be discussed.  
5.1.1.5.  Summary of stakeholde r views on this option 
A slight majority of stakeholders responding to the GP support the idea of reviewing 
the distinction between A and B services although almost 2/3 reject the idea of 
applying the same regime to all services. The most frequently re peated arguments in 
favour of reviewing the two lists refer to th e fact that some of the B-services might 
not merit differentiated/lighter treatment (f or example restaurants, legal services). 
Stakeholders argue that the market in a numb er of services classified as category B is 
now developed and these should now be moved to category A (whilst new or 
emerging services could be classified  as B, until the markets mature).  
In relation to social services, there is again some disparity between the different 
stakeholder groups. Civil societ y organisations and a slight  majority of contracting 
authorities call for a special procurement regime to better take into account the 
specificities of social services. Many of th em consider that the procurement of these 
services should be less regulated at EU level. 
Businesses are generally not in favour of a special regime for social services, and 
clearly oppose further reduci ng the density of EU regula tion for the procurement of 
these services, as does the clear majority of MS. Many civil society organisations and 
providers of social services are also in favour of prohibiting or limiting the use of the 
lowest price criterion for the procurement of social services. Other stakeholders 
groups are sceptical about this idea. 
5.1.1.6.  Impacts on administrative burden and simplification 
No change in terms of information oblig ations would be expected under option 
SCO.LEGI.TARGET (i.e. the administrative  burden for businesses should neither 
                                                 
52 The level of such threshold could be established for example by analysing the value of contracts that in 
the past were awarded cross-border, for example by taking their median value  
 
EN 48   EN increase nor decrease). However, this option seeks to clarif y and simplify public 
procurement rules and therefore it is expe cted to optimise the way procedures are 
carried out. For example, improved clarity and reduced legal uncertainty should also 
lower "business as usual" costs. Equally, CAEs should find it easier to identify whether a particular contract warrants app lication of the EU rules, with less checking 
or need for specialised legal advice, hen ce reducing their administrative costs. 
5.1.2.  Impacts of SCO.LEGI.REDUCE option 
Critical choice: 
Far-reaching changes to scope  of the current rules invo lving exclusio n of entire 
groups of purchasers or transactions. 
Headline action(s) : 
- Raise the thresholds.  
5.1.2.1.  Impacts for CAEs 
In countries where approximately the same  rules apply for procurement following the 
EU or national rules, no change (to any aspect) would be expected as a result of 
excluding certain contracts from the scope of the EU rules. However in MS where 
these national rules are "lighter" and less burdensome for CAEs, exclusion would be 
expected to reduce complexity and allow more proportionate procedures, making the 
process easier for CAEs. In these countries there should be a ne t reduction in the 
operational cost, as CAEs could be more flexible, choosing the process which suits 
them best. Based on the findings of a recent survey53 they should also take less time 
to procure. However, regulatory costs for th ese procedures would not fall to zero. On 
the contrary, a number of MS are progre ssively strengthening transparency and 
procedural requirements for be low-threshold procurement. 
The impact on the price paid by CAEs is lik ely to be negative: transparency at both 
EU and national level would drop as a re sult of the different country-defined 
publication methods which woul d apply. Given the clear finding from the evaluation, 
that transparency triggers competition which in turn yields savings, this reduction in 
transparency would lead to higher pri ces being paid by CAEs. However in the 
medium to longer term, this option is, on ba lance, expected to deliver efficiency 
benefits for the CAEs concerned. The effi ciency case is stronger if any envisaged 
exclusions are targeted at smaller CAEs  or small value procurement procedures 
where running full procedures is found to be demanding and can generate 
disproportionate costs.  
The exact impact on CAEs of increasing the EU thresholds would be determined by 
the degree of increase introduced. Other than  to reflect currency fluctuations, the 
current thresholds have not been adjust ed for some 20 years despite inflation. 
Doubling the existing thresholds would remove around 20,000 contracts from the 
current scope. The exact impact on indivi dual CAEs would vary – some would not 
                                                 
53 See: section 8.7.1. and 8.7.2. 
 
EN 49   EN be affected either because their contracts remained in scope or because their national 
rules were not so different to the EU ones. Smaller CAEs, which in general let 
smaller value contracts, would be nefit most from such a move. 
5.1.2.2.  Impacts for businesses (including SMEs) 
As a number of contracts would no longer be  advertised EU-wide in a single source 
(OJ/TED), firms would need to check  other sources to identify business 
opportunities. This would take more tim e and make participating in public 
procurement more costly. Firms operating ac ross borders would clearly be affected, 
but there could also be national level c onsequences, depending on how centralised 
publication is within a given country. For some (often incumbent) firms, reduced 
transparency could have a positive impact, lowering the level of competition they 
might face, and possibly allowing them to raise prices. Overall there would be an 
expectation that for the excluded markets the rates of cross- border bidding would 
probably drop. Nowadays, even if foreign fi rms do not win a contract, the fact that 
they can enter domestic markets at any tim e, influences the behaviours of domestic 
firms (contestability of markets) and again, without this pressure, prices could rise.  
If the exclusions broke inte rnational agreements, firms active on those markets could 
also lose out on international trade, as pa rtner countries would exclude some of their 
target contracts from international competition.  
The consequences for SMEs could be relativ ely greater as they do not have the same 
resources to address the a dditional costs of finding opportu nities or adapting to new 
rules. In particular, higher thresholds would increase the mark et entry barriers for 
SMEs since contract value is a key factor  in determining SMEs' chances of winning a 
public procurement contract54.  
SMEs win a relatively high share of contract s close to or just above EU thresholds. 
Doubling the thresholds would remove ar ound 20,000 contracts from the scope of the 
current rules and could have a significant and negative impact on SMEs competing in 
these markets. Reducing the vi sibility of these opportuni ties and not applying the EU 
rules could reduce transparency and reduce guarantees of fairness and objectivity in 
award of these contracts. This could be to the detriment of successful SMEs. 
5.1.2.3.  Impacts on Member States 
At MS level, excluding certain contracts should reduce the administrative and 
regulatory overheads linked to  public procurement. Firstly national rules are 
expected to be cheaper than EU rules.  A study for the evaluation found that overall 
CAEs and firms consider that the above thre shold procedures are more or much more 
costly than below thresholds55. However, the additional cost  due to the Directives is 
limited – it accounts for perhaps one third of the €5.6 billion estimated cost of the procurement regulatory apparatus or around € 1.7 billion (divided between MS as a 
function of the size of their procurem ent governed by the Directives). The 
                                                
 
54 The results of a recent econometric an alysis show that as the contract value rises, the probability that an 
SME wins the contract falls "[…] increasing the contract value by  172% decreases the chance of SMEs 
winning by 8%" , source: GHK study, page 39. 
55 See: section 8.7.1 and 8.7.2.  
 
EN 50   EN regulatory/administrative savings  are likely to be offset by higher prices due to the 
lower transparency, which may reduce the average number of bids submitted. This 
reduced competition is also expected to  reduce the total savings to the economy. 
There could also be some negative impacts on the integrity of procedures, as the below threshold systems may have weaker  procedural safeguards against fraud.  
A significant additional complication for MS would result from the market access 
compensations due to violating any intern ational obligations. For MS with firms 
which win contracts in these partner countries, the implications could be quite considerable. Losing contracts could lead to  reduced profits and might cause firms to 
lay-off staff, with a subsequent cost to society of supporti ng them. The current 
thresholds in place at EU level are derived from the GP A (the values are set in 
Special Drawing Rights or SDR) and any ch anges, other than those specifically 
agreed to reflect currency fluctuations  over a given period, would lead to re-
negotiation and possible sanctions.  
5.1.2.4.  Impacts on the Internal Market 
Any exclusion reduces the si ze of the Internal Market covered by the EU rules. 
Within the wider public procurement mark et, cross-border pr ocurement would be 
likely to reduce and many markets would re main (or even become more) national.  
Table 9): Impacts of exclusions (number and volume of CANs is based on 2009 data) 
Exclusion Number of CANs 
removed (% of 
CANs ) Value of CANs 
removed (% of 
total value) Internat. 
conse 
quences Comments 
Double thresholds around 20,00056 Around €20 billion57 
(5%) Yes Could be less – depends 
on CAEs reaction58 
Exclude sub-central authorities 45,000 (33%) €116 billion (28% ) Yes Could be more – "other" 
or "bodies governed by public law" not counted 
Exclude all services 68,000 (49%) €160 billion (38%) Yes  
Exclude B services 20,000 (14%) €40 billion (10%) No  
Source: DG MARKT estimates based on OJ/TED data (e xcept "double thresholds" – see: footnotes 56 and 57) 
Transparency and competition, two corner stones of EU public procurement policy, 
would be reduced, leading to lower savi ngs which might not be off-set by lower 
costs. From the table above it can be seen  that a doubling of the current thresholds 
would reduce the number of CANs advertis ed at EU level by around 14%. This level 
of reduced transparency could have significant effects on competition and 
procurement outcomes in the markets affected.  
                                                 
56 Estimates based on PwC study, page 71. 
57 Estimates based on PwC study, page 71. 
58 Due to voluntary publication patterns, see: section 8.3.2.1. 
 
EN 51   EN Exclusions relating to thresholds, par ticular sectors or actors would have 
international impacts and force the renegot iation of the GPA and other individual 
agreements. GPA partners would be likel y to demand compensation and retaliate by 
withholding a similar percentage of their own market and could decide for strategic 
reasons to restrict EU access in areas were the latter is competitive (and where a 
GPA partner industry is actually less competitive). Re-negotiation would be time-consuming and costly, creating uncertainty and increasing the potential for litigation 
during the negotiation period. 
5.1.2.5.  Summary of stakeholde r views on this option 
A majority of CAEs responding to the GP supports an increase in the thresholds, 
whilst a slight majority of Member States would be opposed to such a change. Many 
CAEs argue that contracts with a value cl ose to the existing thresholds generally 
attract little interest from firms based in  a different Member State but that they 
nonetheless generate an addi tional administrative burden.  Business representatives 
reject such an increase, pointing out that  higher thresholds would lead to lower 
transparency and less cross- border business opportunities.  
5.1.2.6.  Impacts on administrative burden and simplification 
If certain transactions are excluded from the scope of the Directives, the information 
obligations, which currently fall on CAEs , firms and MS would be reduced in 
proportion to any exclusion adopted.  
However, the excluded transactions would then be covered by national rules on 
public procurement which are also likely to be subject to some administrative 
requirements. Therefore it is unlikely th at all information obligations would be 
removed, it is more likely that they would be replaced by national rules (that might be equally burdensome). Hence the overal l impact of option SCO.LEGI.REDUCE in 
terms of the administrative burden is expect ed to be positive to neutral – depending 
on the national rules in force in each MS. 
5.1.3.  Summary of impacts of options in  Scope against speci fic objectives 
Substantial revision of the scope of the Directives is sometimes advocated as a 
straightforward and effective way to a ddress the issues of complex rules and 
disproportionate procedures. At a stroke, it is argued, it would remove certain actors 
or transactions from the EU regime. This reasoning assumes that exempted procedures would be subject to less cos tly national requirements (or none at all). 
While national procurement is generally subject to less prescriptive requirements, there will continue to be a substantial regulatory cost for any exempted regulation 
resulting from national provisions, and th e inherent and unavoi dable costs of sound 
management of public procurement. More  importantly, the ex clusion of certain 
transactions or purchasers from the scope of the Directives will also  entail costs – in 
terms of reduced transparency and weaker  competition. Extensiv e re-scoping of the 
Directives may be an effective but very  blunt instrument whilst clarifying the 
boundaries and improving definitions woul d remove the grey areas. However, 
neither option provides a direct respons e to the underlying policy problem of 
excessively onerous or dispr oportionate requirements for some types of procurement. 
 
EN 52   EN Table 10): Summary of impacts of all options in Scope  
Specific objectives 
Option Improve cost efficiency Realise opportunities to 
achieve best outcomes for 
society Create EU wide rather than 
national markets 
SCO.NC 0 0 0 
SCO.LEGI.TARGET (+) 
Elimination of grey zones 
and better targeting of rules 
improves outcomes for 
transactions concerned (+ / ≈) 
Scope remains largely 
constant: greater 
transparency on former B 
type service contracts and 
rules on social services 
better suited to their 
specificities (+) 
Improves the consistency 
of how the market is 
defined across all EU 
countries 
SCO.LEGI.REDUCE (++) 
Based on assumption 
national measures are 
“lighter” and easier to 
apply; if necessary, might 
need to offset international 
consequences (-) 
Smaller scope reduces 
leverage of EU legislation 
in implementing strategic 
procurement (--) 
More/less significant 
exclusions from scope of 
EU legislation: increased 
scope for nationally driven 
policy/market 
fragmentation 
 
5.2. Procedures 
5.2.1.  Impacts of PRO.NC option 
The expected consequences of the "no cha nge" scenario are presented in section 2.4. 
5.2.2.  Impacts of PRO.LEGI.DESIGN option 
Critical choice: 
Correct and enhance existing procedures. 
Headline action(s) : 
- Improve tools for repetitive purchas ing (DPS, framework agreements, e-
Catalogues); 
- Increase use of electronic comm unication tools (e-procurement). 
5.2.2.1.  Impacts on CAEs 
Improved design is expected to facilitate  the achievement of better procurement 
outcomes by CAEs and lead to cost effi ciencies during the procurement process. 
Savings generated by better use of repetitiv e purchasing and more widespread use of 
e-Procurement tools should above all impr ove the proportionality of procedures and 
their cost efficiency.  
 
EN 53   EN Under this option, provisions to improve design by more frequent use of repetitive 
purchasing would be envisaged, also thr ough a more intense use of e-Procurement 
tools (e.g. DPS, e-Catalogues). The latter can create savings and reduce operational 
costs for CAEs, who would be able to  procure more quickly and efficiently59. This 
could generate significant savings for CAEs both in terms of lower prices paid for 
contracts60 and in operational costs. Some trials  have reported price reductions of 
20% or more and reduced transaction costs (both in time and monetary terms). In addition, e-procurement can open up cross- border opportunities, reduce information 
barriers and streamline document exchange.  
Making e-procurement mandatory at EU le vel would ensure the critical mass and 
force the pace of change. It would also re move any uncertainty on the part of CAEs 
as to whether paper procedures still ha ve to be permitted and remove the "risk 
averse" culture of conducting double circuits  (i.e. both paper and electronic) which 
has evolved. However, there are risks to  blanket imposition of e-procurement on all 
CAEs for all procedures. Although the t echnology to undertake e-procurement is 
now widely available and its use is steadily gaini ng ground, only around 5% of 
procurements involve e-tendering/e- submission. Full switchover, will involve 
investment in the capacity to organise pr ocedures electronica lly, and training CAEs 
to use these possibilities
61. Therefore, a phased or targeted imposition of e-
procurement would currently appear most appropriate at CAE level, allowing them 
greater choice to make the transition at a time which is appropriate to them.  
For professional bodies such as CPBs, who ar e already strong users of e-procurement 
and repetitive purchasing techniques, there ma y be reasons to move more quickly to 
a mandatory use of electronic communication – allowing them to make better use of 
repetitive or aggregation techniques whils t also involving more suppliers thereby 
keeping the competition higher. The DPS is a fully electronic procedure (albeit one 
requiring some adjustment); framework ag reements may be or ganised on paper but 
also electronically. In the latter case there w ould be little additional cost involved in 
running a framework with many operators as  the bulk of the administrative work 
could be automated.  
5.2.2.2.  Impacts for businesses (including SMEs) 
Improving the design of the current system and making procedures more 
proportionate should also lead to benefits for businesses. Whilst there may be some 
initial costs in adapting to such change , in general the expected savings should 
outweigh the benefits. Increased use of e-procurement has the potential to create 
savings and reduce the costs of procedures for all ty pes of suppliers. 50% of 
companies replying to the e-procurement GP  were in favour of its mandatory use. 
                                                 
59 Examples of such savings obtained by practitioners see: section 8.7.3. 
60 "E-procurement increases the number of potential bidd ers, forcing them to cut prices" source: Deutsche 
Bank Research paper, February 2011 (hereafter: Deutsche Bank Research).  
61 In view of the risks and potential costs linked to  blanket imposition of e-procurement, the legislative 
review could consider making e-procurement mandatory for: certain types of contracting authority or 
entity (e.g. CPBs), for certain types of purchasi ng method (DPS, catalogue based purchasing of 
commonly bought goods and services), and certain phas es of e-procurement e.g. the notification phase, 
or the provision of access to bid documents. In add ition, regulatory incentives  to encourage CAEs to 
use e-procurement could be examined. 
 
EN 54   EN They consider that e-procurement would increase transparency and access to on-line 
tender opportunities. Action to reduce techni cal fragmentation via the specification 
of clear standards and norms would reduce entry barriers for firms. However in the 
current situation where there are many system s with different tec hnical requirements, 
many businesses face high learning costs in  relation to using these systems which 
would need to be addressed, possibly thr ough the development of EU level standards 
and/or templates. These problems are not  just limited to would-be cross border 
procurers; even within a single country, many different systems and interfaces may 
exist. In Germany, the X-Vergabe project is seeking to create a common interface, 
irrespective of the actual syst em being used, thereby fac ilitating supplier access.  
The risk that e-procurement could exclude SMEs, because they have less access to 
this technology, is not borne out  by experience. A recent study62 shows that many 
SMEs are already "e-procurement sa vvy" and taking full advantage of the 
opportunities it provides. Some  MS/countries (Portugal, Wales) that have made the 
transition have found that SMEs can incr ease their share of market for public 
contracts.  
Many businesses are interested in participa ting in repetitive purchasing arrangements 
and competition for such contracts is ge nerally high. However there is general 
recognition that such practices may close th e market, particularly to SMEs and so 
there would be a need to build in safeguard s and ensure that wider use of such tools 
was not abused.  
5.2.2.3.  Impacts on Member States 
Improving the cost efficiency of public  procurement procedures by redesigning 
procedures to make them more proportionate  could bring significant net savings for 
Member States. As mentioned before, " a full switch to e-procurement may save 
between € 50 to 75 billion on public procuremen t in the EU per year. On top of that 
are increases in transparency and public accountability which are arguably the most 
interesting categories but also the hardest to quantify "63. Increasing the uptake of e-
procurement could increase the visibility of  how money is spent as it allows clear 
monitoring of spend and eas y benchmarking. This could al so enable MS to track 
"socially responsible " and "environmental friendly"  spending and improve their 
planning. 
Some proportion of the fixed costs lin ked to the introduction of greater e-
procurement at EU level would be incurr ed by MS or their principal procurement 
agencies. As a result, this option can have budgetary consequences, although, based 
on recent experience such investment costs (i.e. in terms of building e-procurement capacity) are important but manageable and can generally be recouped in a fairly 
short period of time. The costs to CAEs  and suppliers of adapting to the new 
communication processes present a greater and more diffuse set of costs for the economy. The time-frames involved before  new technology is bedded down and 
market participants have become familiar with it can be relatively long. However, 
                                                
 
62 Source: GHK study, chapter 5. 
63 Source: Deutsche Bank Research. 
 
EN 55   EN this reflects costs in experimental 'first -movers'; time-frames and the cost benefit 
trade-off should be more favourable for MS which implement proven solutions. 
Greater use of repetitive purchasing techni ques can generate economies of scale and 
also reduce transaction cost s associated with purchasi ng/supplying. Often repetitive 
methods can be opened to several CAEs allowing the purchase r to maximise the 
benefits and share them out over a wider circ le of users. Where such contracts are let 
by CPBs, who have greater experience a nd knowledge, procurement should be done 
to higher standards, ensuri ng greater compliance with th e EU rules and reducing the 
risks associated with poor capability and uncertainty. 
5.2.2.4.  Impacts on the Internal Market 
Better designed, efficient procedures should incentivise greater and more correct use 
of the EU rules by CAEs and attract more suppliers, ensuring high competition with the associated benefits. Increased use of  e-procurement should reduce information 
barriers in procurement markets and provi de less cumbersome on-line methods for 
compliance with documentary and procedural requirements. On both counts, e-procurement can be expected to reduce the transactional impediments to cross-border 
tendering – particularly if cheap soluti ons to e-signatures/ e-identification are 
introduced. The removal of these barriers would not in itself remove underlying 
structural or economic barriers to ente ring new markets – language, logistic and 
competitive obstacles to market entry may still discourage bidders. However, over time, greater use of e-procurement could be expected to erode these natural and 
economic barriers. 
Care should be paid to ensuring repetitive purchasing techniques which can also lead 
to greater aggregation do not close the market to competition nor take contracts out of the reach of SMEs. The DPS which is designed as a fully open procedure should 
combine the best of both electronic an d repetitive purchas ing, ensuring open, 
competitive and cost efficient procedures. Additional safeguards on the use of framework agreements should permit similar benefits to be achieved. 
5.2.2.5.  Summary of stakeholders views on this option 
In the e-Procurement GP consultation 65% of respondents believe that EU 
procurement legislation should clarify the possibility for individual MS to impose the 
use of e-Procurement. Many believe that MS  already have, implicitly, the possibility 
to impose e-Procurement but would welcome making this possibility explicit. Those 
who do not support such clarifications believe ei ther that this is not  necessary or they 
prefer the mandatory imposition of e-Procur ement at EU level. Alternatively, they 
believe that CAEs should be the ones to decide to use e-Procurement. 
A vast majority (76%) of respondents to th e e-Procurement GP also believe that the 
EU legislative framework should be modifi ed with respect to the way it handles e-
Procurement issues. The remaining 24% believ e that the EU legislative framework is 
adequate and sufficient or be lieve that new legislation should be undertaken with 
caution. Changes are proposed in the following four main areas: 1) e-signatures, 2) 
DPS, 3) e-Catalogues and 4) attestation/selection criter ia. Virtually all respondents 
(80%) propose legislative changes in the ar ea of e-signatures and DPS, with a view 
to simplifying their use. 
 
EN 56   EN 5.2.2.6.  Impacts on administrative burden and simplification 
Option PRO.LEGI.DESIGN probably contains so me of the most important measures 
in terms of reducing administrative burden. In particular, the various e-procurement 
solutions presented as part of this option should improve the ease with which CAEs and firms can track and audit data. As such, it should be possible to introduce 
automated reporting at all levels, reduci ng the time taken to produce reports. 
Depending on the individual solutions adopt ed, the administrative burden placed on 
the CAEs or firm should reduce – for example, more ambitious e-Catalogue 
solutions, whilst creating a certain set-up a nd familiarisation cost, should facilitate 
the process of bidding for suppliers, standa rdising the data required and the format 
for submission. Equally evaluating bids and providing information back to suppliers 
should be easier for CAEs due to a sta ndardise recourse to electronic means. 
Finally, the reporting efficien cies possible via increased use of e-procurement could 
equally improve the collection of other data which might be required under other 
options analysed in this impact assessmen t (e.g. strategic targets, SME wins), in 
some way mitigating or even nega ting any potential increases. 
5.2.3.  Impacts of PRO.LEGI.FLEXIB option 
Critical choice: 
Expand menu of procedural options avail able to public purchasers and alleviate 
procedures where they result in disproportionate costs. 
Headline action(s) : 
- Greater freedom for CAEs to  use negotiated procedure; 
- New lighter publication regime for sub central authorities ( based on use of annual 
or Periodic Information Notices).  
5.2.3.1.  Impacts on CAEs 
Simpler, streamlined and more flexible procedures would pr ovide greater legal 
clarity and improve the cost-efficiency and proportionality of procedures. For example, greater freedom to use negotiations  is expected to directly improve the 
flexibility of CAEs to achieve  better procurement outcomes.  
In the GP consultation, a majority of stak eholders called for greater freedom to use 
the negotiated procedure as th ey believed that this would allow them to get a better 
match between their desired procuremen t outcome and solutions offered by the 
market
64. CAE' staff would have to acquire  higher expertise to validly conduct 
negotiations. Big CAEs could be expected to possess the necessary skills and buyer 
power to negotiate “smartly”, but smalle r CAEs may lack the necessary resources. 
This option could also gene rate certain positive strategic impacts as the increased 
flexibility would facilitate the purchas e of innovative (e.g. eco-innovative) goods and 
services.  
                                                 
64 Replies to question 19 of the GP.  
 
EN 57   EN However, there would be a need for more  clarity and stricter rules governing the 
increased use of the negotiated procedure to  guard against potenti al risks of misuse 
and to avoid problems with inequal ity of treatment and discrimination65. Increased 
negotiation could potentially reduce the opportunity for cartels, as the less 
predictable behaviour of a CAE during ne gotiation prevents collusion between 
participants beforehand. 
In terms of cost-effectiveness, as far as increasing the flexibility of procedures is 
concerned, the example of the negotiated proc edure shows that it is marginally more 
expensive for CAEs than the open procedure, but cheaper than the restricted procedure
66. Additionally, CAEs may pay higher pr ices per purchase as in general 
the negotiated procedure is less efficient in generating savings than the open and 
restricted procedures67. This evidence would seem to contradict the views of CAEs, 
who generally claim that they can ach ieve better outcomes through increased 
negotiation. 
Another example – giving sub- central authorities the possi bility to use a lighter 
regime - should be the source of significant savings for CAEs in terms of the costs of 
procedures. This procedure would simplif y the way smaller CAEs announce their 
willingness to award a contract as, for instance, the award of contracts would be 
made without publishing an individual cont ract notice (provided that the contracting 
authority has announced its intention and pub lished specific information in a periodic 
indicative notice). Increased choice and simp lification through the introduction of a 
PIN-based procedure for (usually sma ller and less-professional) sub-central 
contracting authorities would nonethele ss maintain some common elements of 
transparency to sustain wide s upplier involvement and competition.  
5.2.3.1.  Impacts for businesses (including SMEs) 
Many firms who replied to the GP favoured increasing the possib ility to negotiate 
with CAEs68. However, such procedures usua lly take much longer than open 
contests69. More negotiation would permit suppliers to present their offers and 
address more efficiently the needs of CA Es. Finally, as prices in the negotiated 
procedure are estimated to be higher than in the open contest70 suppliers may be able 
to secure better terms for their deliver y. Generally, wider use of negotiation would 
not incur any major costs in terms of lear ning new processes, si nce, by and large, 
suppliers have some experience with th ese concepts from supplying the private 
sector.  
                                                 
65 In particular, there would need to be strong transparency around all communications with the actors 
involved at the different steps of the procedures. Based on the responses to questions 19-21 of the GP, a 
distinct majority of respondents favours the introdu ction of additional safeguar ds for transparency and 
non-discrimination in order to compensate for the higher level of discretion. 
66 € 5,800 for CAE per transaction in the negotiated procedure compared to € 5,100 in the open procedure; 
see: section8.8.4. 
67 " Using the open procedure is associated with benefits of a 3 % lower award value when compared to 
cases where non-standard procedures were used ", source: Europe Economics study, page 52. 
68 Replies to question 19 of the GP. 
69 As mentioned previously, awarding a contract under the negotiated procedure takes more than twice as 
long as under the open procedure; see: section 8.7.5.3. 
70 Source: Europe Economics study, page 52. 
 
EN 58   EN Depending on the design of the lighter pro cedure, suppliers and particularly SMEs 
would benefit from being able to transa ct more easily with sub-central CAEs, 
particularly if there are less onerous procedural or documentary requirements. 
However, this procedure could reduce procedural guarantees and possibly the 
redress/remedy procedures available to s uppliers in the event of problems. The 
design of the transparency requirements woul d also need to be carefully conceived to 
avoid depriving suppliers of access to info rmation of potential interest to them. 
5.2.3.2.  Impacts on Member States 
Almost all MS favour greater flexibility in public procurement and measures which 
make it easier to meet individual country/C AE needs. They are generally in favour 
for example, of greater freedom to use the negotiated procedure71. This possibility is 
also compatible with the GPA. While us ing negotiations, CAEs should find it easier 
to make purchases which meet their precise needs - at the MS level this could result 
in more effective use of public funds. If the negotiated procedure with publication was more easily available, there could be le ss incentive to circumvent the Directives 
(e.g. by direct awards) and agai n, this could result in mo re effective use of public 
funds. Such measures could also generate  some reduction to the total cost of 
procurement, as this procedure is globally cheaper than the open procedure
72. 
A new lighter regime for sub-central author ities would be in line with international 
obligations (GPA), therefore no significan t negative impacts on the international 
level are expected.  
5.2.3.3.  Impacts on the Internal Market 
More flexibility and increased choice in procurement is expected to generally 
improve procurement outcomes. The typical  negotiated procedur e attracts fewer 
tenders than the correspondi ng open procedure. However, a higher proportion of 
negotiated contracts are awarded to cross-border suppliers.  
The impacts of a lighter regime would de pend on the details of provisions to be 
introduced – if for example publication obligations were to be lighter for certain 
actors (e.g. publication of a PIN instead of a CN), transpar ency would diminish. This 
measure could also have implicati ons on the international level.  
5.2.3.4.  Summary of stakeholders views on this option 
The GP replies have shown that there is broad support for the suggestion to allow 
more negotiation in public procurement proced ures and/or generalising the use of the 
negotiated procedure with prior publication of a contract notice. With the exception 
of citizens and, to a certain extent, SME representatives, all stakeholder groups 
favour more negotiation in award proce dures for all types of contracts and 
contracting authorities. However, stakeholde rs are well aware that an increased use 
of negotiated procedures can have negative consequences in terms of transparency, 
non-discrimination and fair and objectiv e proceedings. A clear majority of 
                                                 
71 Replies to question 19 of the GP. 
72 Negotiated procedure - €26,000, compared to €27,200 for the open procedure, mainly due to lower 
number of bidders; see: section 8.8.4. 
 
EN 59   EN respondents share the view th at a generalised use of th e negotiated procedure might 
entail risks of abuse and discrimination and that additional safeguards for transparency and non-discrimination would be  necessary in order to compensate for 
the higher level of discretion. 
The GP analysed the possibility of provi ding a lighter proce dural framework for 
local and regional authorities allowe d under the GPA rules for sub-central 
authorities. Responses on such suggestio ns are mixed. A majority of public 
authorities and civil societ y organisations support such  a regime while all other 
groups of stakeholders are against it. Some  respondents – mainly  public authorities – 
question the appropriateness of a special treat ment for local and regional authorities, 
arguing that it would be prefer able to simplify the rules for all contracting authorities 
instead of creating new classes and distinctions. 
5.2.3.5.  Impacts on administrative burden and simplification 
The new lighter regime proposed under PRO.LEGI.FLEXIB option would simplify 
procedural steps in procurement of goods, works and services by sub-central 
contracting authorities. It would reduce the level of detail  and frequency of 
publication requirements, thereby making the procedures less time-consuming and 
involving less paperwork. Some positive impact s could be also expected with regards 
to limiting administrative burden for companie s - as a result of the introduction of a 
new lighter regime the information oblig ations during the bi dding phase should 
generally be less burdensome (less detailed, as a shorter PIN woul d replace a CN as a 
means to announce a call for competition). 
Enhanced flexibility of procedures (for example by permitting unlimited recourse to 
the negotiated procedure with publication)  could also be the source of some 
improvements in terms of lessening the administrative workload for companies – if the negotiated procedure is used, tender doc uments could be more general (than for 
example in restricted and open proce dures) and more information could be 
transmitted to CAEs via non-paper based means (i.e. through negotiations). 
5.2.4.  Summary of impacts of options in Pr ocedures against specific objectives 
Improving the design of certain tools and pr ocedures, together with the provision of 
greater legal clarity on their appropria te use would improve the overall cost-
efficiency and proportionality of pro cedures. Introducing changes that would 
increase choice and improve the flexibility of procedures could also improve procurement outcomes, although certain safeguards would be necessary.  
 
EN 60   EN Table 11): Summary of impacts of  all options in Procedures  
Specific objectives 
Option Improve cost efficiency Realise opportunities to 
achieve best outcomes 
for society Create EU wide rather 
than national markets 
PRO.NC 0 0 0 
PRO.LEGI.DESIGN (++) 
Aggregation/repetitive 
purchasing can improve 
proportionality of 
procedures & makes the 
most of economies of scale; 
e-procurement and other 
modifications should 
streamline & simplify 
provisions on procedures (+) 
Aggregation can facilitate 
strategic procurement; e-
proc can reduce time taken 
and allow greater 
monitoring of strategic 
procurement (+) 
Joint cross-border 
procurement facilitates/ 
strengthens EU public 
procurement markets; 
Greater use of paperless 
procurement removes 
some geographic barriers 
and strengthens EU 
public procurement 
market 
PRO.LEGI.FLEXIB (+ ) 
Increases flexibility and 
provides more legal 
certainty  (+) 
Increases flexibility of 
CAEs to address strategic 
issues (innovativeness, 
eco-innovativeness) (+ / ≈) 
Better / more flexible 
procedures improve the 
functioning of IM in 
general 
5.3. Strategic public procurement 
5.3.1.  Impacts of STR.NC option 
The expected consequences of the "no change " scenario are presented in section 2.4). 
5.3.2.  Impacts of STR.LEGI.FACILIT option 
Critical choice: 
Enable CAEs to frame procurement needs in  ways that integrat e other policy goals. 
Headline action(s) : 
- Allow consideration of entire li fe-cycle costs in award criteria 
- Allow inclusion of factors directly linked  relating to production processes in award 
criteria and technical specifications 
- Introduce the "Innovation partnership"(new,  special procedure for purchases not 
yet available on the market) 
5.3.2.1.  Impacts on CAEs 
Under the first headline action, contractin g authorities would be able to use 
performance on environmental and other dime nsions as a valid criterion for making 
their purchasing decision. Many contracting authorit ies report that they have tried to 
 
EN 61   EN integrate environmental or other considera tions into performance related technical 
specifications, contract clauses and other i ndirect routes. Such action would permit 
them to use measurable performance in resp ect of these considerations as a possible 
criterion for distinguishing be tween offers. This would pr ovide new possibilities and 
legal certainty to t hose CAEs which spontaneously or  under the impetus of national 
or EU initiatives, wish to favour proc urement outcomes which perform better on 
environmental or welfare grounds.  
To make use of these possibilities, CAEs would need off-the-shelf methodologies for 
measuring and comparing costs generated by the different tenders. Life cycle costing 
(LCC) is an established methodology which a llows the evaluation of  the costs of an 
asset throughout its entire lif e-cycle. The calculation of life cycle costing is highly 
dependent on the training and experience of  the staff involved in tender specification 
and evaluation and based on the current levels of experience and use, increased use, even drawing on standardised (EU provi ded) methodologies could reasonably be 
expected to trigger learning and application costs. Also, the results of a survey of 
contracting authorities in th e Adelphi study indicate that fe w currently have  the skills 
or systems in place to be able to verify  whether the goods or services provided by a 
contractor actually meet th e specifications required.  
However, experience with some of thes e approaches has been growing quickly. 
Under Directive 2009/33/EC contracting author ities are required to take into account 
the energy and environmental impacts of vehicles over their life time and an 
appropriate methodology is provided to calcu late the LCC for such vehicles. On a 
voluntary basis, examples of environmental cr iteria have been esta blished for a set of 
18 product and service groups (s ee the GPP training toolkit
73), which, to the extent 
possible, take into account life cycle costing considerations There is already a 
considerable amount of information availabl e, including estimates in monetary terms 
of the costs of emission of green house gasse s and particulate matte r and fact sheets 
on how to apply life cycle costing. However ma ny issues such as applicable discount 
rates and transport costs would need to be considered further before a complete common methodology for the calculation of  life cycle costs for procurement 
purposes would be ready for adoption.  
There would be a need for clear and competent execution of procedures under this 
option. In the event of question-mark s over the objectivity and fairness of 
procedures, CAEs may be confronted  with increased legal challenge. 
According to a recent survey of CAEs, 48% seek innovative products, solutions or 
services in their tender documents on at least some occasions; 7% indicate that they aim to do this as much as possible a nd 10% indicate that they do so regularly
74. The 
idea of a tailor-made procedure (the innova tion partnership) is to allow CAEs to 
support the development and subsequent purchase of innovative solutions. The CAE 
could clearly indicate their interest in such proposals, while retaining broad 
competition and ensuring that the proce dure could be conducted in stages and 
reviewed as the solution approached fu ll scale production. There would be an onus 
on the contracting authorities to frame desi red outcomes as clearly as possible at the 
                                                 
73 See http://ec.europa.eu/environment/gpp/toolkit_en.htm 
74 Source: Adelphi study page 82, for complexity (below) see page 140. 
 
EN 62   EN outset, and engage in iterat ive rounds of negotiation with  suppliers. Experience with 
comparable procedures (e.g. competitive dial ogue) shows that these procedures entail 
longer periods and higher cost. However, thei r growing use testifies to the fact that 
they respond to a real n eed of CAEs and help purch asers and suppliers explore 
promising solutions prior to investment / commitment which may ultimately deliver 
significant financial savings a nd/or strategic benefits.  
Whilst there would be some costs associ ated with adapting these measures, the 
voluntary approach proposed would allo w CAEs to retain a greater choice on 
whether to adopt such measures or not a nd thereby better reflect their immediate 
needs and situation. This would allow them  to balance the (generally financial) 
implementation costs against the achievement  of wider policy goals, which may also 
translate into financial as well as more societal benefits. 
Strategic procurements are perceived to cost more than traditional procurements, 
more often than vice versa. To the extent that CAEs are subject to a fixed budget 
constraint, this may imply lower volumes of purchasing. However there is some 
evidence from green procurement that stra tegic procurement can deliver lower costs 
as well as higher environmental benefits . For example, the draft revised Buying 
Green Handbook (to be published during 2011) reports that: 
• The City of Vienna saved €44.4 milli on and over 100,000 tonnes of CO2 between 
2004 and 2007, through its EcoBuy programme. 
• £40.7 million (€47.2 million) could be saved in the UK if the proposed 
Government Buying Standards (GPP cr iteria) are applied by all central 
government departments and executive ag encies, according to a cost-benefit 
analysis which monetised the potential impacts. 
5.3.2.2.  Impacts on businesses (including SMEs) 
Under this option, suppliers would be faced  with more sophisticated and demanding 
procurement specifications fr om public authorities – expressed in new award criteria, 
or framed over the course of new procedures. This might prompt them to adopt one of two strategies: 
– Develop their proposals and capacity to re spond to these demands, and in so doing 
contribute to a transition of  production/supply base toward s superior technologies; 
– Exit these markets and focus on supplying less demanding purchasers. 
The decision would vary from supplier to  supplier, and market to market as a 
function of the demands of public purchas er. Generalised exit from markets could 
reduce the intensity of competition for individua l contracts. However, this is likely to 
be a transitional phenomenon, as suppliers w ould probably re-enter the market after 
an adaptation period. In the absence of comprehensive and consistent guidance on 
how to provide information relating to L CC or the production process, suppliers 
could be expected to respond in a range of poten tially very different ways, providing 
different levels of detail. They would ofte n incur costs in colle cting and processing 
such data. It could also make it di fficult for CAEs to assess the bids. 
 
EN 63   EN There may be direct costs for suppliers whic h take the form of acquisition of labels, 
or certificates to demonstrate compliance with certain requirements. These costs and challenges could be more significant in situat ions where demands relate to aspects of 
the supply chain beyond the direct control or responsibility of the bidder (such as 
compliance of inputs from third countries with requirements). These costs could be 
onerous for SMEs. Also, longer and iterativ e procurement procedures are likely to 
discourage suppliers who do not have 'deep pockets'.  
The operating environment for suppliers woul d become more challenging if they are 
faced with more varying demands and a pproaches from different contracting 
authorities (e.g. competing labels, or  different certification methods). 
78% of respondents to the Green Paper consu ltation were of the vi ew that SMEs in 
particular would encounter difficulty in re sponding to these requirements. This view 
was particularly pronounced amongst CAEs whereas Member States and 
representative bodies were more sa nguine about the prospects for SMEs. 
Innovation partnerships would provide research oriented economic operators with a 
structured long-term partners hip with CAEs enabling them  to understand the specific 
needs of CAEs and to develop new persona lised innovative solutions to be delivered 
to agreed performance levels and costs. The framework of the innovation partnership 
would guarantee a sufficient degree of  competition during the innovation partner 
selection phases and should provide for the ne cessary IPR transfer and protection 
arrangements depending on the individua l circumstances. The structure of the 
innovation partnership and th e possible participation of multiple CAEs should 
provide the necessary "market pull" for innovative solutions enabling the economic 
operators to reach the thresholds of econom ic profitability without foreclosing the 
market. 
5.3.2.3.  Impacts on Member States 
Strategic procurement can be expected to shift consumption and supply towards 
welfare-improving outcomes. There is anecdotal evidence from across the EU of how properly conceived and executed proc urement procedures have led to the 
selection of promising offers and helped improve performance against strategic goals. In Italy, for example, fifteen major projects for central government websites 
and hardware procurement (worth €71 milli on) were assessed to evaluate their 
compliance with laws on accessibility in  2006. Construction contracts awarded by 
the National Road Administration contain a standard clause placing an obligation on 
the contractors to comply with certain (core ILO) conventions when performing 
contracts in Sweden
75. 
However, 68% of surveyed CAEs admitted that they did not verify whether the 
promised performance was actually deliver ed. Moreover, expectations must be 
tempered by awareness that the public sector is not the dominant purchaser in any market (except defence). The impact would vary from product group to product 
group; for some products, the impact would be low, whereas in other cases (e.g. copy machines, street lighting), the public sector  has a strong power to steer the market. 
                                                
 
75 Source: Buying Social, pages 33 and 45. 
 
EN 64   EN However, it is likely that 'voluntary' stra tegic procurement would change outcomes at 
the margins and only progressively. 
As mentioned above, CAEs would need ope rational and reliable methodologies for 
implementing these approaches. They ca nnot be expected to invent these 
methodologies independently. Central guidan ce – ideally from the EU, but possibly 
also from national procurem ent authorities – would be  needed if contracting 
authorities are to implement these possibili ties. There would therefore be a cost to 
Member States of developing and disseminating these techniques. 
It is crucial for Member States to support innovation in order to keep their 
infrastructure at the upper edge of tec hnological efficiency. Apart from R&D funding 
by traditional means in form of grants a nd financial incentives, public procurement 
budgets present an important financial 'market pull' that can provide for a sensible effect when oriented to specific directi on. Member States ther efore need clear and 
efficient tools enabling them to seek for innovative solutions  in their public 
procurement procedures. 
5.3.2.4.  Impacts on the Internal Market 
To the extent that the pattern of consumption and production moves towards more 
sustainable patterns, the benefits (particula rly environmental) may also spill-over to 
other Member States. The transition could also stimulate the search for competitive advantages and actually stimulate greater competition in particular clusters or 
markets. Survey responses from seven vangua rd Member States s uggests that  45% of 
the value of expenditure on 10 product gr oups frequently purchased by the public 
sector was oriented towards green contracts
76. 
The possibility for contracting authorities to introduce additional considerations into 
their purchasing decisions would increase th e complexity of the award decision. In 
the absence of operational and fairly implem ented methodologies, there is a risk that 
award decisions would involve a greater degr ee of subjectivity. If methodologies are 
not common and widely understood, suppliers  from partner Member States may be 
disadvantaged – for example if jurisdicti on specific labels or certificates were 
required, or methods for calculating extern alities led to different valuations. 
In particular, the decision to permit envi ronmental impacts linked to transport costs 
could penalise suppliers from remote regions  of the single market. There would be a 
need to ensure a proportionate and objectiv e approach to valuing these costs, and 
adopting common positions on how such re sults were taken into account for 
purposes of award decision. 
It would, to the greatest exte nt possible, be necessary to mitigate this risk through the 
definition of common valu ation and measurement methodologies. This has already 
been done in the case of clean vehicles. If life-cycle costing is ch osen as part of the 
award criteria by a CAE, a provision to enforce the use of a common methodology 
(when it has been adopted by a legislative act of the European Union), could be 
designed to allay these concerns. The use of life-cycle costing would thereby be 
                                                 
76 Source: PwC 2009 study. 
 
EN 65   EN encouraged and facilitate d, but remain voluntary, so that certain contracting 
authorities retain the choice to apply it or not. 
Greater encouragement of innovation could l ead to the development of new solutions 
which could change the market. Whilst this is unlikely to happen in all markets, even 
a small change could lead to significa nt benefits to the internal market. 
5.3.2.5.  Summary of stakeholders views on this option 
Opinions were divided on whether EU procurement legislation should allow 
considerations other than strict price/quality to be taken into account. 41% of respondents supported this approach, while 59% opposed. 80% Of Member State and 
50% of contracting authoritie s opposed this idea while repr esentatives of civil society 
(NGOs) were strongly supportive.  
There was a certain degree of support for concrete measures such as allowing 
directly linked externalitie s in production/performance of  goods or services to be 
taken into account particular ly in the award phase (inclu ding clearer acceptance of 
life cycle costing). Contracting author ities are not in fa vour of making the 
consideration of life-cycle costs mandato ry and many respondent s emphasise that 
such measures presuppose the establishm ent of a clear and agreed methodology and 
common criteria to ensure correct assessment of the life-cycle cost. 
Stakeholders clearly advocate further pr omoting and stimulating innovation through 
public procurement. They recommend for instance a greater use of procedures particularly suited for innovative procuremen t such as competitive dialogue, design 
contests and in particular the negotiated pr ocedure, as well as a wider allowance of 
variants and performance re quirements in technical spec ifications. Another idea 
brought up by some stakeholders is that c ontracting authorities should be given the 
possibility (framed in the procurement rule s) to react to unsolicited proposals. 69% 
of stakeholders supported th e idea of tailor-made procedur es (as an alternative to 
competitive dialogue) to promote innovative responses to procurement needs. MS, CAEs and representative bodies were uniformly supportive of this approach. 
In a recent Eurobarometer (363), a clear majority of respondents were willing to 
accept that CAEs did not choose the cheapest bid for a public contract when social 
aspects, such as job creation, were taken in to consideration. Similar high levels of 
support were expressed in relation to the consideration of environmental (green) 
factors. 
5.3.2.6.  Impacts on administrative burden and simplification 
The obligations under option STR.LEGI.FACI LIT would not be greater than under 
the more prescriptive STR.LEGI.EFNFORC option and could be less, depending on 
the level of take-up by MS. The main  difference between the impacts on 
administrative burden between the two legislat ive options is that up-take of strategic 
procurement would be voluntary under ST R.LEGI.FACILIT. Each CAE would be 
allowed to make its decision on whether or not the benefits of strategic procurement 
outweigh more burdensome pro cedures in the short-term. 
 
EN 66   EN As far as firms are concerned, once a CAE make s a decision that it wishes to pursue 
strategic goals using the enhanced toolbox th at would be put at their disposal under 
option STR.LEGI.FACILIT, firms would anyway face additional administrative 
burden (information obligations). While subm itting offers in response to invitations 
to tender that involve strategic requirements,  firms would have to provide more detail 
on their costs and processes (e.g. to fulfil life-cycle co sting methodologies). As a 
result, the costs of biddi ng would probably increase. Ho wever there may be some 
mitigating solutions, which could decrease th ese costs – for example, provision of a 
limited set of methodologies, databases contai ning standardised cost information e.g. 
CO 2 offsets, transport costs (t hat this option envisages).  
5.3.3.  Impacts of STR.LEGI.ENFORC option  
Critical choice: 
Remove discretion from CAEs: they must awar d (all or part) contracts on the basis 
of performance in respect of other policy goals. 
Headline action(s) : 
- Introduce obligations on "what to buy" (quotas); 
- Require CAEs to use certain defined award criteria. 
5.3.3.1.  Impacts on CAEs 
The imposition of EU level quotas or the de finition of certain award criteria could 
have a powerful effect in ensuring that cer tain considerations were given greater 
weight in individual purchas ing decisions. It would howev er tie the hands of CAEs 
when it came to defining their purchasing ne eds or eligible solutions. The regulatory 
imposition of such requirements, without regard  to the real needs, circumstances, and 
resources available to CAEs could lead  to sub-optimal procurement, reduce 
allocation efficiency and complicate sour cing of inputs to s upport public service 
delivery Renewable energy sources, for exam ple, can cost three or four times as 
much as their non renewable equivalents and not all are equally av ailable across the 
EU. The estimates made by different mode ls gave a range of €24–31 billion to the 
additional production cost in the year 2020 of achieving a 20% share of renewable 
energy77. 
Many contracting authorities report that strategic procurements entail greater risk or 
cost than traditional procurements. When s tipulating environmental requirements, for 
example, 37.9% of the survey participants  experience cost increases, whereas costs 
remain constant for 33.2%. Only 1.7% report no increase in cost78. To the extent that 
this perception is borne out, it suggests that  strategic procurement may entail higher 
costs which may impose choices on CAEs  who may not have budgets which allow 
them to meet the costs in volved without affecting thei r other purchases/operations. 
                                                 
77 Source: The renewable energy impact assessment SEC(2006)1719, page 15-18. 
78 27.1% had no opinion on the change in cost. 
 
EN 67   EN There would be a need for investment in  monitoring and quota management capacity 
at the level of CAEs. In th e case of award crit eria, CAEs would need to demonstrate 
that the rating of different tenders agains t the additional criter ia had been conducted 
fairly and properly, and that scoring rules (weighting) had not distorted the outcome 
of the procedure. Despite the simplicity of  the legislative approach, the imposition of 
obligatory award criteria would present c onsiderable implementation challenges for 
CAEs. 
5.3.3.2.  Impacts on businesses (including SMEs) 
Under a system of quotas, certa in parts of the market woul d be reserved to suppliers 
being able to propose solutions embodying par ticular characteristics. Other suppliers 
would be excluded from these markets. Depending on how lucrative these markets 
are, this could lead to extensive investment by suppliers in qualifying to participate in these markets, or in demonstratin g the eligibility of their tenders.  
A system where multiple considerations we re introduced as award criteria could 
compromise the ability of suppliers to respond to public tenders. The framing of 
award criteria, and their accumulation, should ha ve close regard to the feasibility of 
the supply side to respond to these demands . Absent this, the over-specification of 
mandatory award criteria could undermin e competition for public contracts. 
5.3.3.3.  Impacts on Member States 
The introduction of reserved budgets woul d give a strong impetus for CAEs and 
suppliers to adopt production/performa nce methods capable of meeting these 
demands. In addition, it is like ly to lead to appreciable investment in demonstrating 
formal compliance with qualification requir ements. It could lead  to over-investment 
in certificates or labels demonstrating th at suppliers meet certain requirements. 
However it could, over time, deliver signif icant strategic benefits and advances 
against wider policy objectives. 
The fixing of operational and meaningful quotas would be a challenging process for 
policy-makers. They would at the same tim e need to be meaningful – the market 
should be capable of supplying the aggregat e needs of all public purchasers subject 
to the quotas. They should also be set hi gh enough to encourage suppliers to shift 
resources in order to benefit from privileg ed access to reserved markets, and change 
consumption/production patterns. Setting such quotas in EU public procurement 
legislation would require quotas affecting a range of different po licy areas to be 
grouped under this one umbrella policy. This  could lead to problems in terms of 
updating and ensuring consistency with sect or specific developments, or Member 
States' individual strategies.  
There would be a need to implement a system for compliance monitoring and 
measurement, both to assess procurement practice and to measure the strategic 
impacts.  
5.3.3.4.  Impacts on the Internal Market 
The use of firm regulatory requirements or quotas should be framed and 
implemented in a way that does not forecl ose tender procedures to suppliers from 
 
EN 68   EN other Member States. The means for demons trating compliance with award criteria 
would need to be comparable and viable. Th ey should not emerge as a technical trade 
barrier. 
The way in which quotas and award criteria  were employed should be monitored to 
avoid their manipulation to restrict co mpetition from non-domestic suppliers. The 
need to meet quotas should not become a pretext for exempting procedures from 
compliance with open tendering requirements for example. In particular, the decision to take account of environmental impacts linked to transport costs could penalise 
suppliers from remote regions of the single market. There would be a need to ensure 
a proportionate and objective approach to valu ing these costs and ta king results into 
account for purposes of award decision. 
5.3.3.5.  Summary of stakeholders views on this option 
68% of responses to the Green Paper opposed the imposition of obligations on what 
to buy through EU legislation. Around 80% of responses from Member States, 
contracting authorities, and all responses from EU leve l organisations and citizens 
took this view. Only representatives of civil organisations took the opposite view 
(65%). The most frequently raised arguments against such obligations are: the fear of 
too much interference from the EU in the decisions of public purchasers; increased 
complexity of the legal framework; the ri sk of affecting cont racting authorities’ 
ability to adapt their purchasing decisions to their specific needs; risks of price 
increases and of disproportionate admini strative costs for public purchasers and 
businesses, particularly SMEs. 
5.3.3.6.  Impacts on administrative burden and simplification 
To a large extent, the impact on the information requirements that would result from 
option STR.LEGI.ENFORC would depend on th e degree to which strategic quotas 
are set or the detail involved in defining and applying certain award criteria and the 
associated necessary monitoring. Under th is option, EU obligations would follow 
from mandatory targets or quot as and MS would have to provide information on their 
progress against these objectives. Quota monitoring obligations imposed on MS 
would also generate additional reporti ng obligations on each and every public 
purchaser who awarded a contr act involving strategic goals.  
Increased administrative requirements and obligations linked to the selection and 
award stages of procurement would almost  certainly affect CAEs, who would also 
have to verify and validate the informa tion provided by firms when checking if they 
complied with particular criteria or technical specifications. As these new 
requirements would be based on comp lex methodologies (e.g. to monetise 
externalities), they might be burdensome to CAEs (if not even  beyond the capacities 
of smaller, less professional buyers).  
For firms, the new provisions propos ed under STR.LEGI.ENF ORC would be the 
source of significant additional administrative burden (information obligations) as bidders would have to provide more detail on their costs and processes (e.g. to fulfil 
life-cycle costing methodologies or to prove fu lfilment of certain social criteria). The 
costs of bidding would probably increase.  
 
EN 69   EN As mentioned in section 5.3.2.6), there may be some mitigating solutions, which 
could decrease these costs – for example, provision of a limited set of methodologies, 
databases containing standardis ed cost information e.g. CO 2 offsets, transport costs.  
5.3.4.  Summary of impacts of options in St rategic against specific objectives 
The strategic impacts of the facilitative op tion would generally be lower than under a 
mandatory approach, as there would probably  be some variation in the degree of 
implementation across MS. However, it would permit buyers to make choices 
depending on their individual circumstances and available resources, which could be 
considered particularly important in the present environment of  financial strain.  
The coercive approach could potentially ha ve strong impacts in achieving strategic 
goals as CAEs across the EU would be compelled to purchase in accordance with these rules. The principal drawback is that the coercive option would remove 
discretion from the CAE to frame its proc urement needs in the areas covered by the 
requirements. This could potentially lead to inferior procurement outcomes and, over 
time, possibly have the perverse effect of  locking public procurement into outdated 
preferences. At the present time, the diffe rent countries, sectors and actors exhibit 
widely different levels of maturity. Forcing the pace of change through changes to 
the EU public procurement rules setting quotas  or targets would not  appear desirable. 
However, there is no reason to discontinue  the current approach  of using sector 
specific legislation, which can been target ed at specific markets, based on more 
detailed information and analysis.  
Table 12): Summary of im pacts of all options in Strategic public procurement 
Specific objectives 
Option Improve cost efficiency Realise opportunities to 
achieve best outcomes for 
society Create EU wide rather 
than national markets 
STR.NC 0 0 0 
STR.LEGI.FACILIT ( ≈/-) 
Variable take up could 
limit impacts of more 
complex evaluation 
methodologies and 
potential greater costs of 
strategic purchases (+ +) 
More consistent use of pp 
to achieve strategic goals; 
differences across MS 
lower the impact but better 
adaptation to local 
specificities (+/≈ ) 
Effort needed to develop 
and implement common 
metrics and approaches to 
limit possible complexity 
and fragmentation (due to 
permissive nature of 
change) 
STR.LEGI.ENFORC (-) 
In the short term lower cost 
efficiency due to lack of 
experience and knowledge; 
improving over the long 
term, depending on 
availability of standardised 
methodologies  (+) 
Public procurement used 
more forcefully to achieve 
other policies objectives – 
however deprive CAEs of 
possibility to frame 
outcomes, lock society into 
certain preferences (+/≈) 
Strategic objectives more 
convergent across the EU: 
but detailed supporting 
metrics and measurement 
needed 
 
 
EN 70   EN 5.4. Access 
5.4.1.  Impacts of ACC.NC option 
The expected results of the "no change" option have been discussed in section 2.4. 
5.4.2.  Impacts of ACC.SOFT option 
The impacts of soft-law instruments to im prove access are difficult to estimate, since 
the uptake of such actions would be voluntary and vary from MS to MS. Broadly 
speaking, non-legislative instruments s hould result in increased cross-border 
participation and higher SMEs success rate in  public procurement, but their ultimate 
impacts might vary (e.g. if trainings on doing business abroad are organised, 
participation will remain voluntary and eff ects in increased cross-border participation 
cannot be guaranteed) and are generally expe cted to be lower than similar actions 
which are introduced via legislation. 
New guidance relating to selling abroad coul d go some way to addressing the current 
inertia identified as affecting many firms and help them design strategies to identify and enter new markets. This could benef it both SMEs and cross-border procurement. 
5.4.3.  Impacts of ACC.LEGI.FACILIT option 
Critical choice: 
Remove administrative barriers to SME participation & cross-border access. 
Headline action(s) : 
- Mandatory acceptance of self-declarations as prima-facie eviden ce for selection;  
- Introduction of a European procurement passport. 
5.4.3.1.  Impacts on CAEs 
This option would have predominantly positive impacts for CAEs as it would 
provide operational solutions to key barriers which may be reducing competition, but would not impose their use, hence allowing CAEs to exercise choice and judgement 
based on individual ci rcumstances. If measures reducing the information obligations 
placed on firms were to be implemented (e.g. through generalising the "winning bidder provides"
79 provisions), this coul d theoretically reduce the efficiency of the 
evaluation process for CAEs if, in some cases , a firm identified as a winner fails the 
evidentiary tests (and the CAE would have to go to their s econd choice or repeat the 
process). From the information available, such instances are not  that common, and in 
most cases CAEs should save time by accepting  self-certification of compliance from 
bidders who ultimately do not win the contract. Also, if more firms feel able to bid, competition could increase, which could lead to greater price savings or improvements in quality for the CAE. 
                                                
 
79 Rather than all bidders providing the requested evidentiary documents, these would be only requested 
from the winner i.e. when submitting a bid, supplie rs could include a self-certification of compliance. 
 
EN 71   EN Introducing a new generation of IT tools fo r the publication of notices would further 
enhance transparency at EU level, leading to more competition that could lower the price paid. New IT tools co uld also be the source of important savings for CAEs, 
introducing further automation and hence, co nsuming less time and effort. In a new 
generation of standard forms
80, data would become re-usable and input would be 
more frequently limited to ti ck-boxes (rather than text fi elds), reducing the costs to 
CAEs. Other tools, such as a more widesp read use (accompanied by more consistent 
updating by MS) of e-Certis  or the introduction of an EU public procurement 
passport would also help CAEs to carry out procurement involving the participation 
of non-national bidders. The EU public procurement passport would contain information, validated at Member State leve l, confirming that a business is compliant 
with certain, frequently requested crite ria. Such measures would remove any 
uncertainty relating to the validity or appr opriateness of a give n piece of evidence, 
even when written in an unfamiliar langua ge. They should also make the process 
more efficient for the CAE, especially as it would not have to approach different national entities to request or validate particular evidence.  
5.4.3.2.  Impacts on businesses (including SMEs) 
Increasing the use of self- certifications could signifi cantly reduce administrative 
burden for firms
81 and result in cost savi ngs of around €169 million, since 
approximately 4 firms per bid would not have to provide the detailed information requested. Similarly, using a European public procurement passport should be 
simpler for firms who would have a docum ent whose validity would have to be 
recognised by all CAEs, including those in other Member States. Mutual recognition 
of such passports should also reduce the n eed for translation, thereby reducing cost. 
This could encourage greater participation in public procurement contracts, both in 
their domestic markets as well as in those of other countries. 
Revised tools to enhance transparency (e .g. a new generation of  standard forms) 
would equalise access to public procurement markets for all companies irrespective 
of their size. Encouraging more langua ge provision through wider translation 
possibilities in OJ/TED (as a minimum thr ough greater standardisation of structured 
data and less reliance on free text which requires translation) would also improve 
access to business opportunities for all firm s (including SMEs), allowing firms to 
decide if the opportunities presented in a particular market are worth the costs of 
entry
82. An improved e-Certis would help fi rms to identify which documents and 
certificates they need to submit when  tendering cross-border, reducing their 
uncertainty and speeding up their ability to bid. If the mutual recognition of such 
forms was introduced, firms would also incur fewer translation costs.  
                                                 
80 Regulation (EC) 1150/2009 defines the different forms for publishing information about public 
procurement opportunities in OJ/TED. 
81 It could reduce administrative burden for firms by over 80% (as there are on average 5.4 bidders per 
contract, therefore 4.4 no longer would have to provide the information). This measure alone would 
significantly reduce the total administrative burden, reducing the initial figure by around €169 million 
and far exceeding the EU's target of a 25% reduction; see: section 8.8.6. 
82 However, improved translation in OJ/TED can not re move the language barriers; firms would still have 
to operate in the language of the country and obey its laws, which are unlikely to be available in a 2nd 
language. 
 
EN 72   EN 5.4.3.3.  Impacts on Member States  
Increasing access to government market s should lead to hi gher competition and 
lower prices/improved quality. Whilst both the headline measures should increase the 
degree of competition national firms may face from businesses based in other Member States, these firms should also en joy equal access to markets in other EU 
countries. The costs of setting up an EU procurement passport would vary depending 
on the format chosen (e.g. el ectronic vs. paper), the number of different evidences 
covered by the passport and the infrastructu re in place to provide key information 
through national/central data bases. Such choices would be made on a country by 
country basis, to reflect their own res ources and policy. Whilst the set up costs of 
such systems could be quite large in some countries where little such infrastructure 
exists, the use of such passports would be be neficial both within a country as well as 
outside.  
Improved tools for publication in OJ/TED would increase transparency and facilitate 
access to structured statistical information on public procurement markets that can be shared by Member States with the Co mmission. The widespread use of new, 
streamlined IT tools for publication which should be less time consuming for CAEs 
and firms, when aggregated, could generate  important budgetary saving for Member 
States. Increased use of e-Ce rtis would put some additi onal control and maintenance 
duties (in terms of updating th e content of the database) on MS. This would require 
certain involvement from the national administrations in charge of public procurement. These costs however would be marginal from a budgetary perspective. 
5.4.3.4.  Impacts on the Internal Market  
In general, measures which improve  cross-border bidding such as self-
certification/winning bidder provides and the EU procurement passport, should 
benefit the internal market and should improve competition. Improved tools for publication in OJ/TED would significantl y increase transparency as they would 
facilitate access to structured statistical information on EU public procurement markets.  
Encouraging more language provision through  wider translation possibilities in 
OJ/TED would generate additional costs for the Commission (i.e. the Publication 
Office in particular). The current year ly cost of managing OJ/TED is around €14 
million. If more investment in translation functionalities was to be undertaken, these 
costs could increase, but should be sma ll compared to the related benefits.  
Care would need to be taken to specify the conditions under which MS could 
introduce SME specific measur es. If this is not done, it co uld actually create some 
access barriers and decrease convergence acr oss the EU (if Member States chose 
different solutions).  
5.4.3.5.  Summary of stakeholders views on this option 
Many stakeholders who replied to the GP consultation consider that SME access to 
public contracts should be further improved, also through changes to the EU legislative framework. Specific obstacles  for SME access that are recurrently 
highlighted are administrative burdens and co sts of participation, particularly with 
 
EN 73   EN regard to documentation for qualificati on of candidates (evi dence for selection 
criteria).  
Hence, a vast majority of stakeholders th ink that business and in particular SMEs, 
would benefit greatly from an alleviation of  the administrative bur den related to the 
choice of bidders. In partic ular, stakeholders from all interest groups advocate the 
use of self-declarations and the introducti on of a rule according to which original 
certificates may only be require d from the winning bidder.  
A majority of business and public authoriti es – but not MS - think that additional 
measures are needed to st rengthen the innovation capac ity of SMEs, recommending 
for instance financial support scheme s and compensation of bidding costs. 
Finally, stakeholders identify a clear need for better rec ognition of certificates across 
borders and a better coordination of national systems in this context. Some respondents think that certificates shoul d have a European-w ide standardised 
content; others recommend a greater use of electronic databases for facilitating the 
use of certificates in a cross-border context, such as e- Certis. The idea of a European-
wide prequalification system finds some  support from business but meets opposition 
from contracting authorities. 
5.4.3.6.  Impacts on administrative burden and simplification 
Option ACC.LEGI.FACILIT focuses on propos als and headline actions that can 
significantly reduce administrative burden for companies. New provisions aimed at 
reducing the information obligations placed  on firms, by requiring only the winning 
bidder to provide information, would imme diately reduce the administrative burden 
by just over 80% (on average there are 5.4 bi dders per contract, so 4.4 no longer have 
to provide the information) i.e. far exceeding the EU's target of a 25% reduction. Coupling this with the creation of a Eu ropean procurement passport, whereby 
processes would be put in place to allow a national agency to provide some of the 
requested information could significantly reduce the information requirements on a 
bidder. 
Similarly, simplification of publication re quirements through an overhaul of the 
standard forms could be a milestone in th e reduction of administrative burden for the 
thousands of firms that participate each  year in public tenders above the EU 
thresholds. A new generation of standard forms would be expected to be (to the 
extent possible) automated so that a vast majority of information introduced in TED would be re-useable by the IT systems (e .g. information introduced in PIN would be 
re-used in a CN and a CAN). Such a new ge neration of standard forms would also be 
principally based on tick-boxes (t o reduce the number of text fields), so that the time 
spent by the different partie s on completing these proced ural obligations could be 
limited to an absolute minimum. 
5.4.4.  Impacts of ACC.LEGI.ENFORC option 
Critical choice: 
Introduce prescriptive measures to reserve parts of public procurement markets for 
SMEs or require structuring of purchases  in way that favour SME participation. 
 
EN 74   EN Headline action(s) : 
- Impose mandatory use of lots fo r all above threshold contracts; 
- Quotas for share of procurement contracts/budget awarded to SMEs. 
5.4.4.1.  Impacts on CAEs 
If coercive tools that seek to force an  increase in market access were introduced, 
CAEs would loose a certain element of flexib ility and not always be able to adapt to 
their individual circumstances at a given poi nt in time. The time required to carry out 
procurement procedures would probably increase which could have some cost 
implications. For example, if the mandatory use of lots or SMEs quotas were to be 
introduced, CAEs would have  to spend time ensuring compliance and checking that 
these conditions were met. To verify comp liance, more documentation would need to 
be requested, analysed and evaluated in  the selection stage (e.g. additional 
information concerning bidders to verify th eir SME status) or award stage (checking 
bids for many individual lots rather than a single contract), increasing the duration 
and hence procedural costs.  
The introduction of the mandatory use of lots would increase the complexity of the 
award procedure, as each new lot could require a separate definition of requirements 
and a separate evaluation of offers83. Similar issues would aris e in terms of verifying 
that quotas for SMEs were being met. There c ould also be some incr eases in price, as 
firms try to recuperate their resultant a dditional administrative expenses. Finally any 
coercive measures would limit the flexibili ty and autonomy for CAEs to determine 
the most appropriate way of conducting public procurement and there could be 
tensions between choosing the best bid and meeting certain quotas.  
Excessive uniformity, which might be inhere nt in some of the proposed actions (e.g. 
a mandatory pan-European pre-qualificatio n system) could have negative impacts on 
the quality of selection of bidders, as CAEs  would no longer be able to ask for very 
specific (tailor-made to their needs) requirements, but would have to accept candidates fulfilling more general/standardised qualifications. In the case of obligatory subcontracting, CAEs would lose a certain degree of control over contract 
execution that could have negative impacts and reduce the cost-effectiveness of 
                                                
 
83 An alternative solution (proposed under the ACC.LEGI.FACILIT option) would be to introduce the 
compulsory subdivision into lots only where certain conditions are satisfied, thereby alleviating some of 
the negative consequences discussed above. Variants of this solution are already being used in France 
(e.g. compulsory subdivision into lots unless it is technically difficult, expens ive or purely restricts 
competition to local markets) and Germany (exception based on technical or economic reasons). Even 
with a "lighter" approach, the burden of justifyi ng any exceptions would fall on the CAE, resulting in 
procedures which are potentially more complex and information intensive. CAEs might need to seek additional legal advice to ensure compliance with the rules (e.g. to judge if an obligation to split 
contracts into lots could be waived or not). Legal uncertainty risks would be most significant for smaller 
CAEs who often have less expertise/experience. In France where a similar so lution operates, caveats 
have already given rise to quite some, sometimes contradictory, court decisions. (most important 
decisions: Decision of the "Conseil d'Etat" of 11.08.2009 "Communauté urbaine Nantes Métropole", Decision of the "Conseil d'Etat" of 09.12.2009 "Département de l'Eure", Decision of the "Conseil 
d'Etat" of 21.05.2010 "Commune  d'Ajaccio" and Decision of th e "Conseil d'Etat" of 24.10.2010 
"Syndicat mixte d'assainissement de la région ouest de Versailles"). 
 
EN 75   EN procurement. Some of these actions (e.g. obligatory subcontracting) could interfere 
in civil law relationships – again, this coul d be a potential source of complexity and 
legal uncertainty and might result in higher litigation.  
Similar effects would be likely if obligat ory requirements concerning the acceptance 
of bids in a 2nd language were introduced (and wh ich could be counter-productive as 
bidders should be able to operate in the native language of a CAE if they wish to 
fully understand the business and legal environment).  
5.4.4.2.  Impacts on businesses (including SMEs) 
Measures proposed under this option c ould increase transparency and access to 
information for firms, as certain re quirements linked to public procurement 
procedures would be similar/the same acr oss all MS. For example a mandatory pre-
qualification system for bidders would provi de the firms with clear, pan-European 
requirements that they would need to meet in order to be accepted in the system.  
A mandatory division of contra cts into lots would lower the typical value of a single 
contract (lot) which should make public procurement contracts (at least from the 
financial point of view) more accessible for SMEs84. In the case of SME quotas, 
SMEs shares in the public procurement ma rket would most probably increase, but 
bidding would become more information in tensive as firms would be obliged to 
provide additional documentation (e.g. concerning their turnover, headcount, etc.). This would lower the cost-effectiveness of  procedures. Obligatory subcontracting of 
contracts would increase competition for SMEs while acting as subcontractors, but could disadvantage them significantly as pr ime contractors (i.e. this measure would 
probably favour big undertaki ngs, as SME would not be qu alified/have the capacity 
to act as prime contractors and supervisors of other firms).  
As far as the GP replies are concerned, SMEs are favourable to subdivision of 
contracts into lots, however there is much more resistan ce among firms with regards 
to all other measures potentially  considered under this option
85.  
5.4.4.3.  Impact on Member States 
Coercive measures considered under this option might increase administrative 
burden, complexity and duration of the award procedures – at the level of MS this 
may result in less efficient procurement pr ocedures that lower the efficiency of 
public spending. 
An obligation to divide contracts info lots is likely to improve SMEs' access to 
procurement markets (directly or indirectly). However, there is no data available on the impact of introducing a bl anket obligation to use lots. However, in France, where 
an obligation to split contract s into lots (except in certain cases) was introduced in 
2006, rates are relatively high in terms of the SME share in public procurement 
                                                
 
84 As high contact value is an important obstacle for SMEs in accessing public procurement markets 
above thresholds; source: GHK study, page 39. 
85 Replies to questions 46 to 52 of the GP. 
 
EN 76   EN markets (France awards 44%86 of contract value to SMEs, as compared to the EU 
average of 34%). Unfortunately, little other co mparative data is avai lable in this area, 
but further analysis is planned.  
5.4.4.4.  Impacts on the Internal Market 
Measures proposed under this option shoul d increase transparency and access to 
public contracts at the EU level, but this ga in would be realised at a certain cost. For 
example, the establishment and monitori ng of compliance with such systems (e.g. 
SME quotas, mandatory use of lo ts) would have to be carri ed out by the Commission 
and involve some potentially significant budgetary cost, not just as a one-off 
expense, but also in regular maintenan ce costs (see also actions proposed under the 
legislative options relating to Govern ance). Overall the probable additional 
administrative burden and more time consuming and complex procedures would lead to a lower cost efficiency of public pr ocurement markets at the EU level.  
Finally, this option raises some  doubts in relation to the subsidiarity principle, as it 
seems likely that several of the actions that  are proposed to be coordinated at the EU 
level (e.g. mandatory subcontracting or SM Es quotas), could be performed more 
effectively at a more immediate or local level.  
5.4.4.5.  Summary of stakeholders views on this option 
The GP replies show mixed support for the introduction of additional measures more 
specifically focused on improving SME access, such as mandatory splitting of contracts into lots or turnove r caps. Public auth orities are in gene ral quite sceptical 
about such coercive measures; business' opinions are divided. 
Many stakeholders are rather  sceptical about the introduction of more specific EU 
level measures to encourage participation of bidders from other Member States. In 
particular, the idea of requiring contracting authorities to draw up tenders in a second 
language and/or to accept bids in a differe nt language is rejected by a very large 
majority of all stakeholder groups. 
5.4.4.6.  Impacts on administrative burden and simplification 
As with the prescriptive option under th e strategic procurement section, impacts on 
the information requirements that woul d result from option ACC.LEGI.ENFORC 
would depend on the degree to which quotas  are set and monitoring is required. 
Under this option, EU obligations would follow from mandatory targets or quotas 
(e.g. mandatory use of lots or quotas for awards to SMEs). Any quota monitoring obligations imposed on MS to provide in formation of their pr ogress against these 
objectives would also generate additi onal reporting obligations on all public 
purchasers.  
Increased administrative requirements and obligations linked to the selection and 
award stages of procurement would clearl y affect CAEs, who w ould also have to 
verify and validate the information pr ovided by firms when checking if they 
                                                
 
86 However, according to statistics of the French réseau de commande publique,  SMEs' market share in 
value terms is 35% of public purchases. 
 
EN 77   EN complied with particular criteria. By splitti ng a contract into lo ts, CAEs would often 
have to repeat the same evaluation a nd award process several times with the 
corresponding increase to both time taken and burden generated. The new procedural 
requirements might be burdensome and tim e consuming for CAEs (e.g. additional 
verifications to check the size of economic operators).  
For firms, the new provisions proposed  under ACC.LEGI.ENFORC would be the 
source of additional information obligations as bidders would have to provide more detail on their status (e.g. data on workforce, turnover and ownership structure), 
which would need to be consistently and periodically updated. However, as firms are 
already required to have some similar information (turnover, balance sheet, number 
of employees) in the context of other EU legislation, e.g. the EU’s accounting 
Directives, the additional costs of providi ng this information in the context of 
procurement procedures may not be signif icant. Overall, the costs of bidding may 
marginally increase.  
Finally, some increase in administrative burden could be seen depending on the 
introduction of further requirements to ve rify sub-contracting arrangements. This 
burden would be higher depending on th e degree of prescription enforced. 
5.4.5.  Summary of impacts of options in  Access against speci fic objectives 
Whilst the introduction of coercive measures  should lead to more SME and possibly 
more cross-border access to EU public procurement markets, it is not clear that it would actually streamline and simplify the rules. The introduction of more 
information requirements could increase co mplexity and administrative burden. Non-
coercive instruments which aim to fac ilitate access to EU public procurement 
markets could result in simpler and less burdensome processes for SMEs and cross-
border bidders, which could encourage incr eased participation, although with some 
associated costs for CAEs and MS. 
Table 13): Summary of impact s of all options in Access  
Specific 
objectives 
Option Improve cost efficiency Realise opportunities to 
achieve best outcomes for 
society Create EU wide rather than 
national markets 
ACC.NC 0 0 0 
ACC. 
SOFT (≈) 
New training and guidance 
neutral in terms of cost-
efficiency (+ / ≈) 
Some strategic goals (incl. 
increasing SMEs and cross-
border access) can be 
achieved more effectively, but 
a voluntary measure, so 
positive impacts not 
guaranteed  (+ / ≈) 
Increased cross-border 
strengthens integration of EU 
public procurement market, 
but a voluntary measure, so 
positive impacts not 
guaranteed  
ACC. 
LEGI.FAC
ILIT (++) 
"Winning bidder" clearly 
lowers administrative burden (+) 
Differences across MS lower 
the impact but better (+ ) 
If allowed to go unchecked, 
differences in implementation 
 
EN 78   EN Specific 
objectives 
Option Improve cost efficiency Realise opportunities to 
achieve best outcomes for 
society Create EU wide rather than 
national markets 
improving cost efficiency and 
motivates more firms to 
participate. Costs of other 
measures depend on choices 
made by individual MS/CAEs adaptation to local 
specificities and different policy choices 
across MS could generate lack 
of convergence in the EU, 
thereby negating some of the 
improvements to cross border 
ACC. 
LEGI.ENF
ORC (-) 
Proposed obligatory measures 
expensive and 
disproportionate at least in the 
short term (+) 
Some strategic goals (incl. 
increasing SMEs and cross-
border access) could be 
achieved more effectively via 
coercive measures (+) 
Increased cross-border 
strengthens integration of EU 
public procurement market 
5.5. Governance 
5.5.1.  Impacts of GOV.NC option 
The consequences of pursuing a "no change " policy are discussed in section 2.4). 
5.5.2.  Impacts of GOV.SOFT option 
Under this option, the Commission could in itiate an informal process of mapping 
national institutional arrangements for public procurement administration, and 
identify areas of recurrent difficulty in procurement policy and practice. This could 
evolve into a process of l earning from 'best practice' a nd benchmarking and provide a 
focal point for convergence of administrative practice. 
Current efforts to provide assistance to  national administrative bodies (through 
structural fund assistance to some countries) with the correct implementation of 
procurement procedures could be con tinued or stepped up. The benefits of 
channelling public procurement through sp ecialised or centralised procurement 
entities (such as central purchasing bodies using electronic procurement facilities) 
could be highlighted and promoted. 
In general, new soft law opti ons such as the provision of assistance to administrative 
structures for monitoring and control of pub lic procurement, as well as for ensuring 
the integrity of procuremen t (e.g. training for the admini stration of MS) would be 
expected to have a weaker impact th an those described for GOV.LEGI.TARGET. 
There would be no formal or legal basi s for MS to cooperate in provision of 
information (e.g. on review and remedy procedures), and no legal basis for the Commission to give effect to conclusions drawn from the analysis. For example, 
article 81 of the 2004 Classic Directive provi des the option for MS to create a single 
authority to play the above roles. Howeve r, only one MS has ex ercised this option. 
Some other MS have neverthe less taken steps in this di rection with the creation of 
specialised services or units within  existing administrative structures. 
It is unlikely that a consistent appro ach to the policing of compliance with 
procurement rules across EU would be de veloped under this option. Differences in 
 
EN 79   EN the provision or severity of appropriate  administrative powers to monitor and 
penalise non-respect of procurement rule s could lead to pronounced differences in 
the degree of regularity, transparency a nd openness of MS procurement markets. 
5.5.3.  Impacts of GOV.LEGI.TARGET option 
Critical choice: 
Leverage achievement of economies of scal e and optimal outcomes for CAE through 
the use of specialised, professional bodies which aggregate purchasing where 
appropriate. 
Headline action(s) : 
- Establish clear rules for purchases made  through CPBs (inc. safe haven concept). 
5.5.3.1.  Impacts on CAEs 
Optimisation of resources through the aggregation of demand could generate 
considerable positive effects for CAEs, such as diminished costs of procedures. For example running a framework agreement is asso ciated with lower co st for CAEs than 
running "standard" restricted  or negotiated procedures
87. However, procurement 
techniques that involve aggregation usually take longer to award than non-
aggregated procurement processes88. 
Greater aggregation could also enhance the buyer power of CAEs and improve 
opportunities to pool skills and expertise (a nd thus share the procurement related 
costs and risks). Procedures run through CPBs  should be visible to a wide range of 
market participants, traceable and less prone to conflicts of interest or subjectivity 
that may distort traditional procurement ad ministration. They could also facilitate 
strategic procurement of new, innovative products and services. Since CAEs could 
decide on a case by case basis whether to us e these possibilities or not, they would 
also see a certain increase in the range of choices available to them i.e. their flexibility would increase, which could be of particular benefit to smaller CAEs 
which rarely publish contracts with values above the EU thresholds. 
Achieving more legal clar ity concerning public procur ement procedures and in 
particular, clarifying and standardising th e responsibilities and roles falling to each 
party when using a CPB, should, from a CA E perspective, reduce the perceived risks 
of litigation, legal assistance costs (as external counselling would no longer be 
needed) and diminish the number of legal challenges. This could lower overall transaction costs in procurement. Equally, if procedures are clarified, CAEs should 
be less inclined to implement risk-averse procurement practices (that e.g. stifle innovation) which could be resulting in  sub-optimal procurement outcomes. 
                                                
 
87 The costs per procedure for CAEs are €5,400 in the case of a framework ag reement, whereas it is 
€9,000 for the restricted and €5,800 for the negotiated procedures, although the framework contracts are 
still slightly more expensive for CAEs than the open procedure, which typically costs €5,100 per transaction; for more details see: section 8.8.4. 
88 66 calendar days in case of framework agreements and joint purchasing, compar ed with an average of 
58 day for all procurement or 53 days for non-framework contracts; see: section 8.7.4.1. 
 
EN 80   EN 5.5.3.2.  Impacts for businesses (including SMEs) 
Aggregation of demand could have some  negative impacts on transparency and 
opportunities for competition: as contracts ar e aggregated (i.e. over time and in value 
terms), the publication of notices would b ecome less frequent but their value would 
become higher. For firms this could make access to business opportunities more difficult. In particular, SMEs might be threat ened as the typical contract value rises. 
Aggregation also intensifies the risks of  weakening competition (e.g. reissuing 
consecutive frameworks might favour larger incumbents
89). To remedy the above, 
tools such as the Dynamic Purchasing Sy stems (hereafter: DPS) could be used, 
offering an alternative that combines th e benefits of aggr egation with open 
competition between suppliers. 
Aggregation of demand (e.g. through framew ork contracts) is expected to lower 
procedural costs for firms90. The use of CPBs and framew ork agreements could also 
offer suppliers more scope for economies of scale which could potentially reduce the prices offered to CAEs. More clarity w ith regards to definitions would undoubtedly 
be welcomed by firms, potentially allowing lit igation and legal assi stance costs to be 
scaled down. 
5.5.3.3.  Impacts on Member States 
Better harnessing of scale benefits through aggregation
91 could deliver significant 
advantages and budgetary savings92. However, national authorities should be 
attentive to the potential for greater ma rket aggregation to undermine competition 
between suppliers. These risks could be m itigated by clearer rules and safeguards, 
and by giving CAEs alternatives to fram ework agreements. Member States could 
consider a range of CPB models, adapted to  their circumstances and needs – this may 
mean the creation of more than one CPB, to allow vertical procurement (e.g. medical 
and health related purchases)  as well as horizontal (nat ional, regional or local). 
Aggregation of demand could offer more scope for economies of scale which could 
potentially be passed on as reduced prices  to the administration. Finally, MS could 
gain more leverage in achieving st rategic goals in public procurement93 . 
5.5.3.4.  Impacts on the Internal Market 
As mentioned above, aggregation of dema nd could increase the typical value of 
contracts, thereby attracting increased at tention from potential suppliers in other 
jurisdictions. Clarif ying the rules concerning cro ss-border coope ration between 
contracting authorities from different  MS could have positive impacts on 
convergence between EU procurement market s. Aggregation of demand can also 
                                                 
89 Based on 130 interviews with firms frequently active in public procurement, PwC study, page 115. 
90 See: section 8.8.4. 
91 Note, CPBs are often users of e-procurement, l eading to opportunities for synergy with the actions 
discussed under PRO.LEGI.FLEXIB. 
92 See: section 8.7.4. 
93 Aggregation of demand can be seen as a tool that facilitates the achievement of strategic goals in 
procurement - CPBs are more qualified and experienced purchasers and therefore are assumed to be 
capable of conducting more far-reaching and comple x procedures that may be necessary to achieve 
societal goals (e.g. inno vation, social aspects). 
 
EN 81   EN facilitate the achievement of strategic goals  in public procurement - CPBs are better 
resourced to implement complex or sophisticated procurement policies.  
5.5.3.5.  Summary of stakeholders views on this option 
The GP replies lead to a conclusion that st akeholders are in general in favour of a 
stronger and more generalised aggregati on of demand. Many respondents consider 
that there are various obstacles to an e ffective aggregation of demand and that the 
current public procurement legal framework  does not provide sufficient tools to 
overcome them. Nearly all stakeholders believe that the a ggregation of demand 
implies a certain amount of risk for competition and may hinder SME access to public contracts. They also agree on the f act that some areas are more convenient for 
aggregation of demand than others. 
5.5.3.6.  Impacts on administrative burden and simplification 
Option GOV.LEGI.TARGET seeks to optimise th e use of resources, in particular by 
the aggregation of demand. This has important potential in simplifying procurement procedures as less professional public purch asers could delegate the buying functions 
to specialised bodies (CPBs). As far as firms are concerned, centralised demand 
might also mean less frequent bidding (f or higher value cont racts) that could 
ultimately mean that firms spend less time on meeting procedural requirements. Less 
paperwork would also mean less administrative burden.  
Finally, central purchasers ar e often the front-runners in using e-Procurement tools – 
as a result the simplification and savings  expected from elec tronic methods of 
procuring would be relevant also for a ggregated purchases but  with (potentially) 
more significant positive impacts achieved through the economies of scale. 
5.5.4.  Impacts of GOV.LEGI.ENHANC option 
Critical choice: 
Oblige MS to identify a national authority in charge of implementation, control & 
monitoring of public procurement wh ich reports annually on performance. 
Headline action(s) : 
- Obligatory designation of central national oversight body by Member States, with 
clear obligations on monitori ng, enforcement and reporting. 
5.5.4.1.  Impacts on CAEs  
CAEs (especially larger entities) woul d be subject to monitoring and reporting 
obligations from the national designated body or intermediary agencies at national 
level. This would entail so me additional burden for CAEs  in the form of keeping 
records and providing them (in the appropriate format) to central oversight bodies or 
inspectors and general reporting. Clearer (a nd possibly more consistent) monitoring 
and controls would on the othe r hand increase the legal certainty for CAEs, as these 
would serve as tools for the detection and early resolution or pr oblems before they 
become litigation issues. 
 
EN 82   EN Clearer and more authoritative guidance, plus greater provision of the appropriate 
professional support would increas e legal certainty as CAEs would be able to obtain 
clarification on scope, procedures, etc. As  a consequence the number of litigations 
would be reduced, the time taken to run a procedure could be shortened and ultimately this would lead to increased co st-efficiency. Moreover, the possibility of 
regular and systematic training of personnel and sharing of best practices would lead 
to improved administrative capacity build ing, more legal certainty and increased 
efficiency.  
5.5.4.2.  Impacts on businesses (including SMEs) 
More professional procurement and stronger anticorruption measur es would increase 
transparency, legal certainty and competiti on. Failure to publicise and administer 
public procurement procedures implies lost  business opportunities  and may result in 
costly litigation for suppliers. The (poten tially) high level of corruption in some 
national markets/sectors could be distor ting competition and denying opportunities to 
competitive suppliers. Efforts to enhance th e quality and professionalism of public 
procurement administration would reduce fr iction, complexity and cost, increase 
legal certainty and confidence in the system. The supply side  of the market would be 
the first beneficiary of these improve ments in the operating environment. 
5.5.4.3.  Impacts on Member States  
Having in place a national body with responsibility for monitoring and strategic 
oversight of public procurement would provide a source of feedback on the functioning of the policy at national le vel, allowing for rapi d identification of 
systemic problems. This would increase th e opportunity for timely remedial actions 
by means of guidance or even legislative changes. This system could, within a 
relatively short time-frame, be  expected to generate impr ovements in terms of overall 
management of public procurement expend iture – at least through the principal 
spending agencies and departments. 
Some Member States would have to make  the necessary legal and administrative 
arrangements to designate a single body in charge with public procurement 
implementation and control. This process coul d involve some start- up cost to create 
or adapt the mandate of existing entitie s and resource them. The monitoring and 
control powers could be assign ed to an already existing body
94 which would act as a 
single contact point at national level. In th is case the impacts in terms of cost and 
complexity should be limited. However, in the case where Member States decide to 
create a completely new body, this  could generate additional cost95. 
Some Member States have already esta blished knowledge centr es, or provide the 
services of a knowledge centre through another body in charge of public 
procurement meaning that these Member Stat es would not incur additional cost (of 
                                                 
94 The monitoring and implementation of EU and nationa l procurement rules is cu rrently scattered across 
different institutions or different departments/offices  of the same institution which are not necessarily 
co-ordinated.  
95 A yearly labour cost of €272,656 was estimated for every 10 people, by multiplying the average 
monthly labour cost of € 2,272.13, (calculated as average Eurostat cost of labour in the 27 MS for 
2006). 
 
EN 83   EN labour) in setting up any such centres. However for those Member States which 
would have to create new knowledge centres  this could generate additional costs96. In 
small Member States such as Ireland or the Netherlands agencies carrying out these 
tasks have around 25 staff of all grades. 
Clear rules at national level on anti-corruption, anti-fraud, a nd conflict of interest or 
professional misconduct would increase conf idence in the system and allow for 
better enforcement of the rules. This shoul d result in a more attractive environment 
for investments in Member States and increased transparency and competition. 
This option could be considered to stray into areas previously  not covered due to 
subsidiarity concerns. However, the evalua tion has shown that Member States do not 
consistently monitor and control public procurement policy. This is a significant 
impediment not only to the correct impleme ntation of provisions stemming from the 
EU Directives which is a major source of co st and uncertainty in itself. The absence 
of effective national arrangements also  undermines the capacity of national 
administrations to effectively account for and manage overall public procurement expenditure. Therefore, there is, in additi on to the case for enha ncing control of the 
implementation of EU rules, a strong self-interest for Member States to step up the 
quality of their public pr ocurement administration.  
5.5.4.4.  Impacts on the Internal Market  
The advantage of a single central counterpa rt in each Member States would be in 
having first hand and timely information part icularly in relation to different problems 
affecting the implementation of public procurement law. This would allow immediate feedback on the functioning of th e policy; identification of the potential 
weak points in national legislation as well in  EU legislation; and a subsequent timely 
pro-active approach in solving such issu es (through guidance, soft law, etc).  
5.5.4.5.  Summary of stakeholders views on this option 
Whilst the GP consultation did not ask any explicit questions about national 
administrative capacity, there is a general vi ew in support of further steps to increase 
the professionalisation of public  procurement. In general, stakeholders are against the 
introduction of criminal sanctions to addre ss certain violations of public procurement 
rules and feel that Member States should be  left to determine any detailed measures 
or additional instruments to tackle or ganised crime in public procurement. 
5.5.4.6.  Impacts on administrative burden and simplification 
Increasing the controls and monitoring c onducted by Member States, as suggested 
under this option, would probably lead to an increase in info rmation obligations, 
which would affect the cost at national and CAE level. The exact costs would depend 
on the individual arrangements put in pla ce compared to the ex isting situation. In 
some instances costs could be reduced as tasks which are currently spread over several departments and reports are centralised  into one and made more efficient. In 
others, where less reporting occurs at  present, costs would increase.  
                                                
 
96 A yearly labour cost of €81,796 was estimated fo r every 3 people, by multiplying the average monthly 
labour cost of € 2,272.13, (calculated as average Eurostat cost of labour in the 27 MS for 2006). 
 
EN 84   EN However, the new structure of public procurement administration could be the source 
of simplification, as various functions which are currently performed by many 
organisations in some Member States woul d be more clearly allocated and possibly 
brought together. 
5.5.5.  Summary of impacts of options in Governance against specific objectives 
Whilst choices relating to greater aggregation have overall positive benefits, there are 
some concerns about market clos ure (GOV.LEGI.TARGET). The option 
GOV.LEGI.ENHANC considers possible actions  to improve the control, monitoring 
and application of public procurement ru les at both national and EU level. By 
considering actions to intr oduce similar conditions and ar chitecture in all MS, it 
should improve the effectiveness of these functions at both national and EU level. 
Both the LEGI options should generate so me improvements to legal certainty and 
effectiveness. In some instances, simila r actions could be taken under the option 
GOV.SOFT but adoption would be  voluntary and might not lead  to a desired level of 
convergent and consistent procurement overs ight and professionalisation. However, 
soft law action could be used to comple ment any legislative change, providing 
further detail/examples and guidance and if  appropriate to support/provide training. 
Table 14): Summary of impacts of all options in Governance  
Specific 
objectives 
Option Improve cost efficiency Realise opportunities to 
achieve best outcomes for 
society Create EU wide rather than 
national markets 
GOV.NC 0 0 0 
GOV. 
SOFT (+ / ≈) 
Improvements due to new 
guidance, but take-up 
voluntary (+ / ≈) 
Improvements due to new 
guidance, but take-up 
voluntary (+ / ≈) 
Improvements due to new 
guidance, but take-up 
voluntary 
GOV. 
LEGI. 
TARGET (++)  
Increases legal certainty and 
reduces costs through 
economies of scale and lower 
error rates (+) 
CPBs are more professional 
and aggregation may permit 
greater strategic buying power (+) 
Greater transparency and ease 
of access for firms wishing to 
find business 
GOV. 
LEGI. 
ENHANC (+)  
Increases legal certainty and 
reduces likelihood of error 
through tighter controls (+) 
Optimal choices are more 
likely to be made  (+ +) 
More uniform and EU wide 
monitoring & control 
increases cross border 
convergence 
5.6. Regulatory form 
Many of the problems identified for this Imp act Assessment relate to instances where 
the current legislation has been identified as too complex. This complexity may arise 
for a range of reasons, including the existence of a multiplicity of reference sources. Many of the legal options identified a bove would aim to simplify the current 
 
EN 85   EN legislation whilst reflecting any new juri sprudence or information/experience. 
Depending on what, if any, legislative propos als are presented, a transposition date 
would be set to ensure that  MS have sufficient time to transpose and create new 
legislation. As such, when developing such proposals, consideration would be given 
to two key issues: 
– The need to maintain two separate Direc tives i.e. to keep the current Classic 
and Utilities Direct ive approach; and 
– The use of implementing / comitology m easures to permit a later adoption of 
more technical or detailed rules which it  may not yet be possible to specify. For 
example, this could include, if appr opriate, regulations  relating to new 
standards for e-procurement; methodologi es and data sources for measuring 
costs related to production and/or life-cy cle; methodologies a nd indicators for 
future monitoring. 
The suggestions on the exact legal form could only be taken once any initial 
proposals have been fully drafted and would only be confirmed at adoption, 
following detailed discussion and consulta tion with MS. The decision about whether 
to maintain two separate Directives woul d be informed by a detailed comparison of 
the final proposals, assessing how different/similar their content is. Due to the nature 
of the reforms being discussed and the problems identified, close consideration 
would be paid to issues a ffecting clarity and simplicit y, coherence with other EU 
policy and monitoring and control arrangements.  
The Directives provide a general framew ork for public procurement and to-date, 
other sector-specific legisla tion has been used to set out  particular strategic goals. 
Careful consideration would need to be give n as to whether this approach would be 
maintained or, particularly if mandatory strategic obligations were introduced, such sectoral objectives would be included in or cross-referenced by EU public 
procurement legislation. This approach of tackling specific market failures or 
opportunities for strategic procurement in a targeted way (e.g. energy efficient public 
purchasing or clean cars) may remain a va lid approach – subject to a coherent 
application of these sector al solutions in as great accordance with the general 
principles and framework for pub lic procurement as possible. 
If it is decided to provide any additional soft law measures such as guidance or 
training, these would be de veloped and discussed with  relevant stakeholders 
including through the various MS committees. 
6. C
OMPARING THE OPTIONS  
Having presented the impacts on each of the five groups of problems (i.e. 
administrative organisation, scope, proce dures, strategic public procurement and 
access), the following table compares the va rious options by assessing their overall 
effectiveness, efficiency and coherence with the objectives. 
 
EN 86   EN Table 15): Comparison of retrained options  
Specific 
objectives 
Policy  
options  Effectiveness - extent to 
which options achieve the 
specific objectives Efficiency - the extent to 
which objectives can be 
achieved for a given level of 
resources / at least cost 
(cost-effectiveness)  Coherence – the extent to 
which options are coherent 
with the overarching 
objectives of the EU policy  
All NC 
options 0 0 0 
SCO.LEGI.
TARGET (+ / ≈) 
Expected gains in cost 
effectiveness, are 
counterbalanced by neutral 
effectiveness in achieving 
best outcomes for society and 
potential losses in creating EU 
public procurement market  (+ / ≈)  
Benefits are expected to 
outweigh the cost of 
implementing new measures (+) 
Improves on but still 
consistent with current 
Internal Market policy 
SCO.LEGI.
REDUCE (+ ) 
May be cost efficient for 
individual procedures, but 
global cost-efficiency affected 
by possible international 
consequences.  (+) 
Doesn’t require new systems / 
resources to be put in place (-) 
Contradicts Internal Market 
policy by reducing the size of 
EU-wide market and could 
cause problems with 
international agreements 
PRO.LEGI.
DESIGN (+) 
Effectiveness from very 
positive (in terms of cost-
efficiency) to neutral in 
creating EU wide market, 
hence overall slight positive  (+ +) 
Certain tools will increase the 
economies of scale; benefits 
are expected to outweigh the 
cost of implementing new 
measures (+/ ≈) 
Improves on but still 
consistent with current 
Internal Market policy 
PRO.LEGI.
FLEXIB (+ +) 
Effective in achieving all 
three specific objectives  (+) 
Significant gains expected 
compared to the resources 
invested (+) 
Improves ability to achieve 
Internal Market policy whilst 
increasing choice and 
modernising procedures 
STR.LEGI.
FACILIT (+)  
Effective in achieving best 
outcomes for society, but 
marginal effectiveness in 
terms of cost-efficiency and 
slightly negative in creating 
EU wide market, thus the 
overall score is slightly 
positive (+ ) 
Respects subsidiarity and 
proportionality while allowing 
CAE / MS to make choices 
that best suit their objectives 
and resources (+/ ≈)  
Improves on, but still 
consistent with current 
Internal Market policy whilst 
respecting subsidiarity and 
proportionality principles 
 
EN 87   EN Specific 
objectives 
Policy  
options  Effectiveness - extent to 
which options achieve the 
specific objectives Efficiency - the extent to 
which objectives can be 
achieved for a given level of 
resources / at least cost 
(cost-effectiveness)  Coherence – the extent to 
which options are coherent 
with the overarching 
objectives of the EU policy  
STR.LEGI.
ENFORC (+) 
Slightly positive effectiveness 
(mainly driven by positive 
impacts in achieving best 
outcomes for society, but 
counter-balanced by low cost-
effectiveness) (-) 
Mandatory solutions would be 
burdensome and costly at this 
point in time (lack of EU-
wide data, methodologies and 
standards tested in practice) (-) 
Depends on how trade-offs 
between wide set of policy 
objectives which may 
sometimes conflict are 
managed 
ACC. 
SOFT (+ / ≈) 
Guidance has been issued and 
has not brought the expected 
results (≈) 
Low costs, low impacts (+ / ≈) 
Consistent with current 
Internal Market policy, 
unlikely to improve the 
situation  
ACC.LEGI.
FACILIT (+/ ≈)  
Effective in achieving best 
outcomes for society and cost-
effectiveness, but marginal / 
slightly negative effectiveness 
in terms of creating EU wide 
market, thus the overall score 
is only slightly positive (+) 
Respects subsidiarity and 
proportionality while allowing 
CAE / MS to make choices 
that best suit their objectives 
and resources (+) 
Improves on, but still 
consistent with current 
Internal Market policy 
ACC.LEGI.
ENFORC (+) 
Slightly positive effectiveness 
(mainly driven by positive 
impacts in achieving best 
outcomes for society, but 
counter-balanced by low cost-
effectiveness) (-) 
Mandatory solutions would be 
burdensome and costly at this 
point in time (e.g. 
construction of new systems, 
lack of EU-wide data, 
methodologies and standards 
tested in practice) (+) 
Supports both Internal Market 
policy and wider EU2020 
goals 
GOV. 
SOFT (+ / ≈) 
Improvements due to new 
guidance, but take-up 
voluntary (+ / ≈) 
Small investment but the take 
up would be voluntary (and 
track record suggests that 
little is likely to change)  (≈) 
Unlikely to generate large 
changes 
 
EN 88   EN Specific 
objectives 
Policy  
options  Effectiveness - extent to 
which options achieve the 
specific objectives Efficiency - the extent to 
which objectives can be 
achieved for a given level of 
resources / at least cost 
(cost-effectiveness)  Coherence – the extent to 
which options are coherent 
with the overarching 
objectives of the EU policy  
GOV.LEGI.
TARGET (+) 
Potential economies of scale 
and increased 
professionalisation should 
improve pp outcomes (+) 
Most MS already have CPBs. 
Mandatory use of e-
procurement should generate 
cost efficiency; Certain tools 
will increase the economies of 
scale (+ / ≈) 
Aggregation/centralisation 
may lead to economies of 
scale and there is potential for 
increased strategic 
procurement, but safeguards 
necessary to prevent SMEs 
being excluded 
GOV.LEGI.
ENHANC (+ +)  
Positive impacts in terms of 
all strategic objectives (+) 
Possible increased monitoring 
costs but no major 
establishment costs expected 
as functions currently 
conducted (in most MS); 
savings through coordination 
and improved monitoring  (+) 
Greater coordination across 
MS strengthens application of 
Internal Market policy 
 
The evidence gathered through the evalua tion and the present Impact Assessment 
suggests that action is warranted.  
Clearly there are certain trad eoffs between the different solutions, particularly across 
the different problem areas. The most obvious examples are in the options relating to 
procedures and governance or strategic pr ocurement where cost-efficiencies and 
benefits realised through im provements to procedures can be used to meet the costs 
of certain actions. E-procurement and its inherent tracking and monitoring could off-
set costs related to new monitoring requireme nts, particularly in governance but also 
in addressing issues affecting access and st rategic procurement. As mentioned in the 
impacts section, the strategic costs of ad apting to new methodol ogies etc will reduce 
over time and increasing the use of concepts such also life cycle costing allow more attention to be paid to the wider cost ba se and contribute to achieving other policy 
goals, particularly those iden tified in the EU2020 strategy. 
6.1. Preferred solution 
Based on the analysis presented in this report, a preferred solution based on a 
combination of nine of the options disc ussed has been identif ied (summarised in 
Table 16). However, it should be noted that  this package of preferred options only 
reflects the opinion of DG MARKT Services and does not prejudge the final form of 
any decision to be taken by th e wider Commission Services.  
6.1.1.  Scope 
The radical approach to rede finition of scope would be mo re simple and effective in 
reducing the compliance costs resulting from the application of Directive thresholds 
 
EN 89   EN to small-value contracts or to contracts operated by small and less procurement savvy 
local purchasing bodies. Howe ver, it would come at a heavy price in terms of 
reduced transparency and weaker disciplines on public procurement across the EU. The evaluation confirms the expectation that  transparency translates into increased 
competition and delivers price and quality savings. Small firms are also relatively 
more active and successful in competing for contracts for values close to the 
Directive thresholds. Therefore radically  reducing the scope of the Directives 
through significant increases to the thre sholds (or the exclusion of important 
populations of purchasers such as sub-centr al authorities) would have significant 
unintended consequences. Increasing the thre sholds would also have international 
consequences as it would trigger a breach of the GPA and lead to the closure of 
(parts of) certain 3
rd country markets. 
Consequently, a targeted approach to any redefinition of the Directives' scope is 
preferred (SCO.LEGI.TARGET). This would en tail for example, exclusion of all but 
the very largest value contracts for so cial services. The special regulatory 
arrangements operated by Member States in re spect of social services or services to 
the person, mean that these markets are characterised by limited tradability. 
Conversely, the impact assessment conclude s that targeted actions to improve the 
definition of scope would also permit the elimination of grey areas such as the 
treatment of many forms of cooperative pu rchasing arrangements (public-public). In 
sum, this impact assessment concludes in favour of the targeted approach to scope redefinition. 
6.1.2.  Procedures 
It is necessary to correct certain shortcomings in the current legislation if the latent 
potential of certain procedures (DPS, comp etitive dialogue) is to be realised. Such 
changes would allow CAEs to tailor the or ganisation of the purchasing procedure to 
the characteristics of the pur chase. More widespread use of e-procurement holds out 
the prospect of significant and enduring gains in admini strative efficiency and an 
intensification of transparency and competition driven savings – which far exceed the switchover costs for CAEs and suppliers. Th erefore, it is deemed desirable to 
proceed with the changes envisage d under the option PRO.LEGI.DESIGN. 
The cost-benefit analysis suggests that ch anges to expand the freedom for CAEs to 
choose between procedural op tions and alleviate publicat ion requirements are also 
worth pursuing. Removal of the presumpti on in favour of the open procedure would 
allow CAEs to make greater use of ot her possibilities in cluding negotiation (as 
proposed under option PRO.LEGI.FLEXIB). 
Hence it is suggested that bot h the legislative options propos ed to tackle issues where 
the current procedures are found to be di sproportionate and in flexible be taken 
forward. 
6.1.3.  Strategic procurement 
Experience from different Member States  and markets suggests that strategic 
procurement can result in the selection of superior solutions in specific instances 
without undermining the provisi on of fair or effective aw ard procedures. However, 
these approaches are still in their infancy. The jury is still out on whether strategic 
 
EN 90   EN procurement can have a decisive impact in supporting the general dissemination of 
superior technologies or solutions. 
It is therefore considered in appropriate and excessively ris ky at this point in time to 
require, through changes to EU legislation, c ontracting authorities to allocate some 
part of their budget to purchases meeting certain criteria. Member States have 
already established national action plans (NAP) in order to set (generally non-
obligatory) targets for increased levels of  green public procurement within certain 
groups of products. These NAPs have not yet be en evaluated in most MS and it is not 
clear whether they are having a signifi cant impact on contrac ting authorities' 
behaviour. Establishing mandatory quotas w ithin the public procurement legislation 
would seem premature while the effectiv eness of voluntary measures has not yet 
been assessed. However there would be no reas on not to advance su ch strategic goals 
via sector specific legislation as different markets mature. 
Instead, it is preferred to pursue the option of allowing c ontracting authorities to take 
account of the performance of proposals in respect of a number of considerations 
directly linked to the production process an d to provide additional procedures to 
support innovative procurement (STR.LEG I.FACILIT). The conclusion of the 
impact assessment is that there are significan t risks associated with this approach – 
relating in particular to a more comp lex operating environment for CAEs and 
suppliers. There is also a ri sk of market fragmentation if implementation methods 
(measurement and weighting systems, labels  and certificates) ar e developed in an 
inconsistent manner across the single mark et. However, the benefits on offer are 
worth striving for. Policy - both legislative and non-legislative (gui dance, relating to 
the legislative changes introduced) - should invest heavily in measures to mitigate 
the risks for contracting authorities, s uppliers and the single market that this 
approach entails. 
6.1.4.  Access 
The impact assessment analysis strongly s upports additional actions to remove 
administrative barriers to particip ation in public procurement markets 
(ACC.LEGI.FACILIT). This should deliver  benefits across the full spectrum of 
impacts – particularly for CAEs and supplie rs in the form of lower administrative 
burden. Some of the actions (e.g. European  procurement passport) could involve 
building the capacity to retrieve company da ta and issue approvals. This cost would 
fall on national administrations or delegated bodies rather than indi vidual purchasers.  
The impact assessment argues against th e imposition of quotas for a proportion of 
contracts/spend to be allocated to SMEs and other prescriptive measures to increase access to public procurement markets (A CC.LEGI.ENFORC). SMEs are relatively 
successful in competing for EU regulated contracts and should be incited to remain competitive on their own merits: the focus should be on removing features of the 
legal or administrative environment which hamper their effective participation. The 
mandatory imposition of lots for all contract s above EU thresholds risks imposing an 
artificial structuring of cont racts on CAEs. This could comp romise the quality of cost 
of the procurement outcome. However, whilst the impact assessment concludes that this approach could not be imposed on a bla nket basis, an increased use of lots under 
certain circumstances is foreseen unde r ACC.LEGI.FACILIT option, which should 
lead to improved access and participation by SMEs. 
 
EN 91   EN The impact assessment concludes in favour of facilitating access and removing 
access barriers. Such actions could usefu lly be supported by appropriate soft law 
measures (ACC.SOFT). It rejects the opt ion of imposing outcomes in terms of 
market share to be reserved to certain categories of actor. 
6.1.5.  Governance 
The cost-benefit analysis supports the inclus ion in the Directives of a clear set of 
provisions regulating aggregat ion, generally via the activities and organisation of 
CPBs. These structures are emerging as key hubs in th e European public 
procurement landscape. Procedures run thr ough these structures should be visible to 
a wide range of market participants, traceable and less prone to conflicts of interest or subjectivity that may distort traditional procurement administration. The most notable drawback of centralisation is the potential impact on the supplier base if 
contracts are too large for SMEs to bid for, or if they foreclose markets for excessive 
periods. These risks need to be mitigated bu t do not overturn th e case in favour of 
this option (GOV.LEGI.TARGET). 
The analysis also examined the need to iden tify a national level c ounterpart to assist 
the European Commission in ensuring the s ound implementation of  EU legislation, 
and to assist with the development of a coherent response to new procurement 
challenges (development of common appr oaches for strategic procurement, 
consistent design of e-procurement models).  Such structures c ould also provide a 
focal point for national efforts to exer cise strategic or central control over 
excessively fragmented public purchasing administration. Many Member States have 
recognised this and are moving in this di rection themselves (e.g. UK Cabinet Office 
efforts to drive efficiency in UK public pr ocurement). This should reduce political 
resistance to this direction. Ho wever, when proposing this option 
(GOV.LEGI.ENHANC), the impact assessmen t recognised that such action would 
require some element of institution buildi ng within some Member States, as well as 
investment in monitoring and reporting syst ems. In broad terms, the benefits of 
provided by such oversight bodies through improved compliance and more efficient 
procurement are expected to outweigh the costs of creating and running them. 
The impact assessment therefore concl udes in favour of actions to strengthen 
administrative capacity by regul ating CPBs, and to require Member States to identify 
a national authority with res ponsibility for oversight of aggregate national purchasing 
and implementation of EU legislation. A ny legislative actions proposed should be 
supported and complemented by soft law measures to provide further detail, 
guidance and if appropriate, training. 
6.2. Conclusions 
Taken together the proposed package of  solutions should address many of the 
problems identified, reducing the cost of conducting public procurement and 
supporting the use of EU rules to achie ve wider political goals, whilst still 
safeguarding fair and open competition. Whilst such actions are not designed to force a greater integration of public procurement markets, they should remove many of the 
existing barriers and improve the way thes e markets function. The proposed package 
consists of seven legislative options a nd two soft law options which have been 
identified on the basis of their ability to address the problems identified. Whilst 
 
EN 92   EN alternative packages could be considered, they would be composed of options that 
have been shown to be less effective than the proposed selection. The package 
proposed should optimise the synergies betw een the different solutions allowing 
savings due to one type of action to neut ralise related costs due  to another (e.g. 
possible increased information requirement s under the strategic procurement actions 
should be partly neutralised by the reduc tions relating to the improved design of 
procurement procedures).  
Many of the measures are designed to simplify and streamline the current 
environment and increase its cost-effec tiveness. Where the checks and balances 
required to ensure the proper functioning of the Internal Market could run counter to 
this simplification, effort has been taken to reduce their complexity.  
Table 16): Summary ta ble of preferred options (marked in grey) 
Options 
 Problem groups No change 
options 
(NC) Soft law 
options 
(SOFT) Legislative – generally 
within current framework 
(LEGI._) Legislative – new or 
significant change 
(LEGI._) 
Scope (SCO) SCO. NC  SCO. 
SOFT  SCO.LEGI.TARGET (clarify 
boundaries)  SCO.LEGI.REDUCE 
(significant re-scoping) 
Procedures (PRO) PRO. NC  PRO. 
SOFT  PRO.LEGI.DESIGN(improve 
definitions and design)  PRO.LEGI.FLEXIB 
(Increase choice, increase e-
procurement) 
Strategic (STR) STR. NC  STR. 
SOFT  STR.LEGI.FACILIT 
(facilitate strategic public 
procurement)  STR.LEGI.ENFORC 
(enforce strategic public 
procurement)  
Access (ACC) ACC. NC  ACC. 
SOFT  ACC.LEGI.FACILIT 
(facilitate access)  ACC.LEGI.ENFORC 
(enforce tools for access)  
Governance 
(GOV) GOV. NC GOV. 
SOFT GOV.LEGI.TARGET 
(optimise the use of 
resources) . GOV.LEGI.ENHANC 
(enhance control & 
responsibility)  
 
Finally, following the wider consultation of  other DGs at the Commission, a proposal 
to set a target date for th e adoption of the use of elec tronic means of  communication 
for all CAEs has been put forward. This r ecognises the arguments presented in this 
impact assessment stating that the market is currently not ready for an immediate 
switchover, but suggests setting a deadline by  which such action should be possible. 
In so doing, it builds on the phased appro ach adopted (CPBs must be ready to use 
electronic communication exclusively at the date of adoption; the phases for 
electronic notificati on and access to documents are made mandatory at the same 
point) and signals clearly to the markets and stakeholders the future direction. 
7. MONITORING AND EVALUATION  
There are already certain obligations on Memb er States to provide annual statistical 
reports which are linked to their internati onal obligations under the GPA. The quality 
and consistency of these reports has been improving over the last few years, but these obligations not provide all the information that would be needed to monitor closely 
the performance of EU public procurement ma rkets. The Services of the Commission 
generate a certain number of indicators, de rived from data provided to Eurostat and 
 
EN 93   EN from data contained in the procur ement notices published in OJ/TED97. However it is 
often necessary to supplement this data. 
In the recent evaluation of the Directives  it was necessary to  conduct a number of 
surveys, studies and interviews in order to  provide sufficient data to allow detailed 
analysis of the extent to which the legislation was meeting its objectives98. 
Additional information about bidders was important to analys e the cross border 
activity and access of firms by size. In particul ar, it has proved useful to examine the 
how the Directives have been implemented by MS, not simply in terms of transposition, but to see how the different administrative structure and arrangements 
for procurement below and outside the scope of the Directives had affected the way 
in which goods and services we re acquired in different MS. 
Since the costs of collecting some of this  information could involve an additional 
burden on CAEs, firms or Member States the detailed requirements may need to be 
investigated in more detail and combined with the data collection needs of Member 
States. If the preferred gove rnance solutions were to be adopted, there would be 
clearer responsibility  for conducting monitoring at Member States level and 
designated bodies which would interact w ith Commission Services to identify and 
define the content of annual performan ce reports. This shoul d ensure greater 
consistency in reporting and enable a cl ear EU overview of progress, allowing a 
timely identification of potential problem areas. Such obligations could be further 
clarified and formalised through future implementing measures. 
Areas for further consideration would in clude developing statistics and monitoring 
methodologies to appraise consistently a nd with the appropriat e periodicity areas 
such as: 
• The cost of conducting public procuremen t according to the EU rules, covering 
the costs for both CAEs and firms,  including further measurement of 
administrative burdens;  
• Integration and cross-border participation in procurement; 
• The use and savings/costs associated  with switching to e-procurement; 
• The approaches, use and associated savi ngs/costs of proced ures which aim to 
integrate wider policy objectives into public procurement.  
A commitment to evaluating the impacts of  any new legislation, if proposed, would 
be included in the draft text.  
                                                
 
97 See: sections 8.2.1 - 8.2.3. 
98 See: the Evaluation Report. 
 
EN 94   EN 8. ANNEXES 
8.1. ANNEX 1 – Procedural issues 
8.1.1.  Inter-service steering group 
List of Directorate Genera ls participating in the inter-service steering group: 
• Directorate General Internal  Market and Services,  
• Secretariat General, 
• Directorate General Regional Policy,  
• Directorate General Economic and Financial Affairs, 
• Directorate General Informa tion Society and Media,  
• Directorate General Environment,  
• Directorate General for Employment , Social Affairs and Inclusion,  
• European Commission European  Anti-fraud Office (OLAF),  
• Directorate General Competition,  
• Directorate General Budget,  
• Directorate General Energy,  
• Legal Service,  
• Directorate General Mob ility and Transport,  
• Directorate General Enterprise and Industry,  
• Directorate General Trade,  
• Directorate General Justice,  
• Directorate General Home Affairs  
• Directorate General Climate Action.  
The Group met four times:  
• 4 February 2011 
• 10 April 2011 
• 17 June 2011 
 
EN 95   EN • 26 July 2011 
The minutes of meeting on 26.07.11 (where the draft Impact Assessment report 
circulated on 15.07.11 was discussed) are sent  to the IAB in a separate document. 
8.1.2.  External expertise 
• Adelphi, Belmont, PPRC (2011), " Strategic use of public procurement in 
Europe",  available at: 
http://ec.europa.eu/internal_market/public procurement/docs/modernising_rules/str
ategic-use-public-procurement-europe_en.pdf  
• Eurobarometer (2011), The awareness, Pe rception and Impacts of the Internal 
Market, 2011. 
• Europe Economics (2006), Evaluation of Public Procurement Directives, London, 
2006. Available at: 
http://ec.europa.eu/internal_market/ publicprocurement/docs/final_report_en.pdf  
• Europe Economics (2011), Taking Stock of  Utilities Procurement, 2011; available 
at: 
http://ec.europa.eu/intern al_market/publicprocurement/docs/modernising_rules/ta
king-stock-utilities-procurement_en.pdf  
• Europe Economics (2011), Estimating Bene fits and Savings from the Procurement 
Directives, 2011; available at: http://ec.europa.eu/intern al_market/publicprocurement/docs/modernising_rules/es
timating-benefits-procurement-directives_en.pdf  
• European Commission (2009b), Public pr ocurement indicators, Brussels, 2009. 
Available at: 
http://ec.europa.eu/internal_market/ publicprocurement/docs/indicators2009_en.pd
f 
• GHK (2010), DG Enterprise and Industry, Ev aluation of SMEs’ Access to Public 
Procurement Markets in the EU , Brussels 2010. Available at: 
http://ec.europa.eu/enterprise/dg/file s/evaluation/pme_marches_publics_report_en
.pdf 
• European Commission (2011) DG Regiona l Policy Working Document, Main 
audit findings regarding application of public procurement rules in MS found in 
projects co-financed by ERDF and the Cohesion Fund under cohesion policy, Brussels 2011 
• EU Project on baseline measurement and re duction of administra tive costs; Final 
Report-Measurement data and analysis as specified in the specific contracts 5&6 on Modules 3&4 under the Framework Cont ract n° ENTR/ 06/61; Report on the 
Public Procurement Priority Area, March 2009 
• PricewaterhouseCoopers, London Economi cs and Ecorys (2011), Public 
Procurement in Europe – Procedures and techniques – A st udy on the cost and 
 
EN 96   EN effectiveness of procurement re gulation, London 2011; available at: 
http://ec.europa.eu/intern al_market/publicprocurement/docs/modernising_rules/co
st-effectiveness_en.pdf  
• PricewaterhouseCoopers, Significant and Ec orys (2009), Collecti on of statistical 
information on Green Public Procurement in the EU Report on data collection 
results, Available at: http://ec.europa.eu/environmen t/gpp/pdf/statistical_information.pdf
 
• Rambøll (2007) DG Internal Market: Im proving and automating the collection of 
statistical data concerning public proc urement in Belgium, Denmark, France, 
Ireland, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Spain and the 
UK, 2007; available at: http://www .portal-vz.cz/Uploads/Mezinarodni-
spoluprace/Improving-and-automa tingthe-collection-of-statist  
• Rambøll (2011), Cross-border procurem ent above EU thresholds, May 2011; 
available at: http://ec.europa.eu/intern al_market/publicprocurement/docs/modernising_rules/cr
oss-border-procurement_en.pdf  
8.1.3.  Public consultations 
8.1.3.1.  The GP on the modernisation of EU public procurement policy 
On 27 January 2011, the European Commi ssion launched a public consultation on 
modernisation. The Commission servi ces received 621 contributions. The 
consultation document, associated papers, synthesis report of the responses and the 
non-confidential contributions can be c onsulted on the Commission's website under 
the heading “Consultation on the modernisa tion of EU public procurement policy” 
(http://ec.europa.eu/internal_market/public procurement/modernising_rules/consultati
ons/index_en.htm ). 
8.1.3.2.  The e-procurement GP 
On 18 October 2010, the European Commission launched a consultation on the 
Green Paper on expanding the use of e-Pr ocurement in the EU. The consultation 
contained fifteen questions. In all, 77 res ponses were received. These were provided 
by stakeholders in 21 MS, 12 European Orga nisations, 3 Internat ional Organisations 
and 1 EFTA State (Norway). 80% of the re sponses come from the two main user 
groups of e-Procurement: public author ities (48%) and bus inesses (32%). 
The responses authorised for publication can be found at: 
http://ec.europa.eu/internal_market/publicprocurement/e-
procurement/consultations/index_en.htm  
 
EN 97   EN 8.2. ANNEX 2 – Additional information related to Section 2.2. Background 
8.2.1.  Total expenditure on work s, goods and services  
Table 17): Total expenditure on works, goods an d services in 2005-2009 in billion € by EU MS 
 2005 2006 2007 2008 2009
Belgium 49,75 46,94 48,67 51,95 55,91
Bulgaria n/a n/a 4,72 5,67 6,41
Czech Republic 20,39 30,21 32,14 37,54 36,50
Denmark 29,61 32,08 33,79 35,47 39,17
Germany 362,11 375,61 399,05 419,26 461,84
Estonia 2,10 2,27 2,67 2,92 2,60
Ireland  19,79 22,13 26,09 27,80 27,56
Greece 18,72 20,23 22,67 22,84 26,28
Spain 126,88 142,49 160,84 164,50 194,96
France 303,30 315,63 328,90 342,14 367,27
Italy 204,49 212,99 215,12 221,49 241,15
Cyprus 1,53 1,73 1,65 1,80 1,91
Latvia 2,11 2,68 3,38 3,62 3,15
Lithuania 2,81 3,98 5,05 5,62 4,69
Luxembourg 4,16 4,48 5,01 5,41 5,90
Hungary 16,33 19,41 21,98 21,09 20,77
Malta  0,76 0,76 0,76 0,87 0,80
Netherlands 123,65 136,92 146,20 156,09 176,85
Austria 45,35 44,46 49,45 54,81 60,89
Poland 39,03 50,33 56,66 67,65 56,43
Portugal 23,18 24,00 27,10 29,21 32,17
Romania n/a n/a 27,18 27,89 27,72
 
EN 98   EN  2005 2006 2007 2008 2009
Slovenia 4,08 6,03 5,22 5,80 6,04
Slovakia  8,77 11,36 13,98 15,89 13,96
Finland 25,27 26,75 28,89 31,54 33,32
Sweden 51,32 55,43 59,08 60,74 59,28
United Kingdom 316,75 356,90 365,40 344,89 324,91
Total EU 27 1 802,23 1 945,80 2 091,63 2 164,47 2 288,44
Source: DG MARKT estimates 
8.2.2.  The estimated value of tenders published in TED  
Table 18): The estimated value of tenders publishe d in TED in 2005-2009 in billion € by EU MS 
 2005 2006 2007 2008 2009
Belgium 6,94 7,65 10,56 12,35 13,53
Bulgaria n/a n/a 2,45 2,96 4,14
Czech Republic 2,68 5,86 5,21 7,90 7,11
Denmark 4,60 6,49 7,31 6,92 8,83
Germany 36,10 38,39 27,07 29,65 34,14
Estonia 0,79 0,97 1,13 1,32 1,15
Ireland 4,19 5,78 6,37 4,48 3,52
Greece 9,49 11,81 7,98 6,64 8,70
Spain 39,10 41,17 42,97 39,28 35,45
France 51,44 62,23 63,96 71,86 73,11
Italy 38,19 44,86 35,50 36,32 38,67
Cyprus 0,48 0,64 0,81 0,81 1,41
Latvia 1,27 2,22 2,61 2,21 1,59
Lithuania 0,74 1,16 1,20 1,17 1,29
Luxembourg 0,74 0,47 0,45 0,51 0,57
 
EN 99   EN  2005 2006 2007 2008 2009
Hungary 6,02 6,14 4,57 5,45 5,86
Malta 0,05 0,09 0,11 0,07 0,40
Netherlands 8,23 12,44 10,19 11,13 11,60
Austria 4,86 4,31 4,55 6,86 6,40
Poland 18,63 14,24 18,13 25,95 25,54
Portugal 3,19 2,97 2,90 4,33 5,75
Romania n/a n/a 9,12 10,29 7,56
Slovenia 0,91 1,56 2,26 1,90 2,12
Slovakia 2,43 1,36 1,97 2,41 4,31
Finland 5,17 5,10 6,39 7,30 8,36
Sweden 9,41 9,62 10,24 11,82 12,43
United Kingdom 64,21 89,52 81,19 80,55 96,89
Total EU 27 319,87 377,06 367,20 392,42 420,44
Source: DG MARKT estimates based on OJ/TED data 
8.2.3.  Number of contract notices and contract  award notices published in OJ/TED  
Table 19): Number of contract notices and contract award notices published in OJ/TED in 2005-2010 by 
EU MS 
 2005 2006 2007 2008 2009 2010
Contract notices 
(CN)  126 897 133 147 142 025 150 282 153 783 161 733
Contract award 
notices (CAN)  77 813 88 915 115 738 127 347 138 021 143 782
Source: DG MARKT estimates based on OJ/TED data 
8.2.4.  Legal detail - overview of publ ic procurement legislation 
The Treaty on the Functioning of the European Union (TFEU), drawing on earlier 
treaties, lays down fundamental and genera l principles applicab le to contracting 
 
EN 100   EN authorities in the context of public procurement99. However it was decided, that on 
their own, these prohibitions were not suffici ent to establish a single market in this 
area. Differences between national rules a nd the absence of requi rements to open up 
contracts to EU-wide competition often resu lted in national markets being closed to 
foreign competitors. Secondary legislation was therefore needed to ensure this 
openness, as well as to make procedures  more transparent. Since 1971, several 
Directives have been adopted to supplem ent the general provisions of the Treaty, 
based on three main principles:  
• Community-wide advertising to foster cross-border competition; • The prohibition of techni cal specifications liable to discriminate against 
potential foreign bidders; and  
• Application of objective criteria for ev aluation and award of public contracts.  
Over the years new Directives were adopt ed both to expand the coverage of the 
Directives (eventually to wo rks, supplies and services) an d to exclude certain sectors 
(e.g. transport, energy, water and tele communications). Other changes were 
necessary to integrate requirements re lated to GATT/WTO agreements and to 
address deficiencies of earli er legislation, such as nati onal markets which were still 
not sufficiently open. The first Utilities Directive (90/531/EEC), in 1990 was based 
on the same principles as the previous Dire ctives, and introduced a higher degree of 
flexibility for contracting entities. In April 2004 the Council adopted Directives 
2004/18/EC and 2004/17/EC which replaced th e previous Directives. They were 
intended to modernise and simplify public procurement procedures, and recognised 
for the first time in EU procurement law,  the possibility of using electronic 
procedures. To ensure the rights given to firms by the EU-rules were observed 
everywhere in the EU, the first Remedies  Directive (89/665/EEC) was introduced in 
1989
100. The Defence Directive was introduced in 2009 to cover the procurement of 
arms, munitions and war material for defence purposes101. The EU is also party to a 
range of international agreements, most importantly, the GPA102. In view of the 
                                                 
99 The provisions of the economic freedoms ban discriminatory measures and unfair treatment on grounds 
of nationality, in order to promote the internal market objective of removing barriers to trade and 
economic flows within the EU. The general ban on discrimination allows some flexibility in relation to 
security, health, environmental and consumer pr otection justifications, under certain conditions.  
100 The current Remedies Directive is 2007/66/EC. It gives all economic operators access to procedures to 
seek redress if they consider a co ntract has been unfairly awarded. 
101 Directive 2009/81/EC covers the rules for the proc urement of arms, munitions and war material (plus 
related works and services) for defence purposes. As a result some procurement will continue to be 
excluded from the scope of all public procurement legislation pursuant to (the narrowly construed) 
Article 346 TFEU, but much will fall within the scope  of the Defence Directive. Contracts awarded in 
the field of defence not involving military or sens itive equipment are subject to Directive 2004/18/EC. 
102 To date the GPA is the only legally binding agreement in the WTO focusing on the subject of 
government procurement. The version dates from the 1994 Uruguay Round and entered into force on 
1 January 1996. It is a pluri-lateral treaty covering the WTO Members that are parties to the GPA, and 
thus have rights and obligations under the Agreement. 
 
EN 101   EN international rights and commitments de volving on the EU as a result of the 
acceptance of the GPA, CAEs must appl y the provisions of this Agreement103. 
Public procurement legislat ion is supplemented and co mplimented by rulings by the 
European Court of Justice (ECJ). 
                                                 
103 Council Decision 94/800/EC (of 22 December 1994) concerning the conclusion on behalf of the 
European Community, as regards ma tters within its competence, of the agreements reached in the 
Uruguay Round multilateral negotiations (1986-1994), OJ L336, 23.12.1994, p.1. 
 
EN 102   EN Table 20): Overview of the main deve lopments of secondary legislation 
Directive Who What, from which 
threshold Comments 
71/305/EEC Public sector Works contracts, 
€1 million Works concessions not 
covered, transport, water and energy sectors excluded 
77/62/EEC Public sector Supplies contracts, 
€200,000 transport, water, energy and 
telecommunications sectors excluded 
80/767/EEC Public sector, 
central state 
authorities Supplies contracts, 
€140,000 Amending Directive 
77/62/EEC; mainly because 
of the 1979 GATT Agreement on Government procurement; transport, water, energy and telecommunications sectors excluded 
88/295/EEC Public sector Supplies contracts, 
€130,000 (for central state authorities), otherwise €200,000  Amending Directive 
77/62/EEC; i.a. because of the 1986 GATT Agreement on Government procurement; transport, water, energy and telecommunications sectors excluded 
89/440/EEC  Public sector Works contracts, works 
concessions contracts, works contracts awarded by concessionaires, subsidised works contracts, € 5,000,000 Amending Directive 
71/305/EEC; Definition of contracting authorities broadened (bodies governed by public law), definition of works contracts broadened (execution and design, … or the execution by whatever means …) transport, water and energy sectors excluded 
90/531/EEC Utilities (water, 
energy, transport and telecommunications sectors) Works and supplies 
contracts, € 5,000,000 for works, €400,000 – 600,000 for supplies Works concessions contracts 
not covered, very broad definition of special or exclusive rights 
 
EN 103   EN Directive Who What, from which 
threshold Comments 
92/50/EEC  Public sector Service contracts, 
subsidised contracts, design contests € 200,000 Two tier system, service 
concessions excluded; water, energy, transport and telecommunications sectors excluded. 
93/36/EEC Public sector Supplies contracts, 
€ 130,000 – 200,000 (central state authorities, others) Codified Directive 
77/62/EEC and its subsequent amendments and introduced substantial changes; Definition of contracting authority broadened (body governed by public law), water, energy, transport and telecommunications sectors 
excluded. 
93/37/EEC Public sector Works contracts, works 
concessions contracts, works contracts awarded by concessionaires, subsidised works contracts, € 5,000,000 Purely a codification of 
Directive 71/305/EEC and its subsequent amendments; See remarks to 89/440/EC. Water, energy, transport and telecommunications sectors excluded. 
93/38/EEC Utilities (water, 
energy, transport and telecommunications sectors) Works contracts, supplies 
contracts services contracts¸ design contests, € 5,000,000 for works, € 400,000 – 600,000 for supplies and services Codification of Directive 
90/531/EEC with the new provisions concerning service contracts; Two tier system for services, works and service concessions contracts not covered, very broad definition of special or exclusive rights 
97/52/EC & 98/4/EC Public sector and 
Utilities Changes to previous 
thresholds. € 5,000,000 / SDR 5,000,000 for works, SDR 130,000 - €600,000 for supplies and services contracts Directive 97/52/EC 
amended Directives 92/50/EEC, 93/36/EEC and 93/37/EEC, while Directive 98/4/EC amended Directive 93/38/EEC; mainly because of the 1994 WTO Agreement on Government procurement; 
 
EN 104   EN  
Directive Who What, from which 
threshold Comments 
2004/17/EC Utilities (Water, 
energy, transport and postal sectors) Works, supplies and 
services contracts, design contests, currently: € 4,845,000 for works contracts, € 387,000 for supplies and services. Replaced Directive 
93/38/EEC with its subsequent modifications; Two tier system for services, works and service concessions contracts not covered, narrower but refocused definition of special and exclusive rights. Postal sector added, telecommunications sector excluded. Provisions on e-procurement included. 
2004/18/EC Public sector Works, supplies and 
services contracts, works 
concessions contracts, works contracts awarded by concessionaires, subsidised works and services contracts, design contests, currently € 4,845,000 for works contracts and works concessions, € 125,000 – 193,000 for supplies and services contracts Replaced Directives 
92/50/EEC, 93/36/EEC and 
93/37/EEC with subsequent modifications; Two tier system for services, service concessions contracts not covered. Water, energy, transport, telecommunications and postal sectors excluded; Provisions on e-procurement included. 
 
 
EN 105   EN 8.3. ANNEX 3 - Detailed description of problem drivers 
8.3.1.  Problem drivers in Scope and coverage  
PROBLEM DRIVER: Complexity of th e rules on scope and coverage 
Both contracting authorities and firms fi nd that the current rules defining who and 
what is included and excluded from th e scope and coverage of EU public 
procurement rules are too complex.  At present, a detailed se t of conditions need to be 
examined to decide whether a particular buye r or a particular tr ansaction is covered. 
Depending on the individual procurement, basic treaty principles, part or all of the 
obligations stemming from the Directives may need to be applied. Often the 
jurisprudence of the ECJ also needs to be  consulted as clarif ications have been 
sought in relation to particular definiti ons e.g. "body governed by public law ", 
“public undertaking"104 and what constitutes a "public contract"105. The actual rules 
which apply depend on the type of purch aser, the actual purchase and its value. 
There are at least 10 possible "choices" base d on the application of various threshold 
levels (see: Tables 13) and 14) below).  
Table 21): Rules for the determination of the applicable thresholds – basic thresholds types 
Amount in [€ .000] 
Applies to  
125 
193 387 4 845 
All works contracts, all subsidised works contracts, all works 
concessions, all works contract s awarded by concessionaires     X  
Supplies and service contracts awarded by Utilities; design 
contests organised by Utilities, supplies and services contracts falling within the scope of the Defence Directive   X   
Supplies and services contracts awarded by "sub-central" 
contracting authorities, subsidis ed service contracts, design 
contests organised by sub-central  contracting authorities; all 
contracts and design contests conc erning the services listed in 
Annex II B of Directive 2004/18 /EEC; service contracts (and 
design contests) concerning certain telecommunications services and R&D services awarded by cen tral government contracting 
authorities; supplies not listed in Annex V of Directive 2004/18/EC and awarded by contrac ting authorities operating in 
the field of defence.  X   
                                                 
104 See: judgement of 10.04.2008 in case C-393/06, Ing Aigner,[2008]ECR, I -2339. 
105 The current definition in the Directives of a public contract has been supplemented and completed by a 
number of important ECJ judgements e.g. Commission vs. Germany (C-126/03), Donau-Wald case (C-
126/03) or Helmut Müller (C-451/08) and 15.07.10 Commission vs. Germany. This means that there is 
no longer one clear source of information for CAEs. 
 
EN 106   EN Amount in [€ .000] 
Applies to  
125 
193 387 4 845 
All service contracts and design contests organi sed by central 
government authorities concerning services listed in Annex II A 
(except certain telecommunications services and R&D services); all supplies contracts awarded by central government authorities 
not operating in the field of defe nce; supplies contracts awarded 
by contracting authorities operating  in the field of defence and 
concerning the products list ed in Annex V of Directive 
2004/18/EC X    
Table 22): Rules for the determinati on of the applicable thresholds – grouped by the Directives, actors 
and transactions  
Works contracts € 4,845,000 Directive 
2004/17/EC All 
contracting entities, all sectors All supplies and services 
contracts, all design contests € 387,000
Works contracts, works 
concessions contracts, subsidised works contracts  € 4,845,000
All contracts concerning services 
listed in Annex II B, certain telecommunications services and R&D services; all design contests concerning these services and all 
subsidised services, € 193,000
All contracts and design contests 
concerning services listed in 
Annex II A except  contracts and 
design contests concerning certain telecommunications services and R&D services € 125,000
All supplies contracts awarded by 
contracting authorities not 
operating in the field of defence € 125,000
Concerning 
products 
listed in Annex V € 125,000Central 
Government authorities 
Supplies contracts awarded by 
contracting authorities operating 
in the field of defence Concerning 
other products € 193,000
Works contracts, works 
concessions contracts, subsidised works contracts  € 4,845,000Directive 
2004/18/EC 
Sub-central 
contracting authorities 
All service contracts, all design 
contests, subsidised service 
contracts, all supplies contracts € 193,000
 
EN 107   EN Since many public authorities do not launch su ch large contracts every year, they do 
not have the necessary knowledge or familia rity with these EU rules "at their finger 
tips".  
8.3.1.1.  Identification of buyers covered 
With very few exceptions, the first step in  deciding whether the Directives apply or 
not, is to decide whether the procurement is being carried out by a relevant body (or 
on its behalf). For example, under the Cla ssic Directive, purchases are generally 
made by bodies belonging to the public sect or ("contracting authorities"). Concepts 
such as “State” and “local and regional authorities” are gene rally understood, but the 
definition of public sector also includes “bodies governed by pub lic law”- a concept 
which has proved the source of some confusi on and has resulted in a whole series of 
judgments by the ECJ106. The Utilities Directive a pplies to a wider group of 
purchasers, known as "contrac ting entities". This grou p includes not just the 
"contracting authorities", but also public undertakings  and private undertakings, 
provided these latter exercise one  of the relevant activities107 on the basis of an 
exclusive or special right. In this context also there appear to be some confusions 
between the concept of "body governed by public law "and public undertaking", 
which was addressed by recent ECJ case law108. In approximately 30% of the 
contract notices published on OJ/TED, a CAE classifies itself as "other", reflecting 
either their confusion, or a potential desi re to (knowingly) a pply a more favourable 
(but incorrect) regime. This initial classi fication is critical to identifying which 
particular provisions of the Directives a pply. Random checking conducted as part of 
the evaluation also identified a mi sclassification rate of around 5%. 
A majority of respondents to the GP finds that the current appr oach to defining 
public procurers is appropriate; some legal experts, civil society organisations and 
public authorities would support some changes in this respect.109 They also feel that 
the EU rules should be limited to actual purchases by CAEs. 
8.3.1.2.  Identification of transactions covered 
Another set of problems stems from the co rrect identification of  transactions or 
activities that are covered by the procurem ent rules. Generally, the Directives are 
applicable if the envisaged arrangeme nt constitutes a "public contract"110. Again, the 
current definition in the Directives of a public contract has been supplemented and 
                                                 
106 The proper application of the el ements stated in the jurisprudence requires a detailed case-by-case 
analysis, taking into account factors such as th e degree of competition in  the marketplace and the 
question of whether the body is acting for profit and bears the losses and risks associated with its 
activity. 
107 I.e. the procurement concerned is made for the pursu it of activity in the water, energy, transport and the 
postal sectors. 
108 See: judgement of 10.04.2008 in case C-393/06, Ing Aigner,[2008]ECR, I -2339. 
109 Replies to question 9 to the GP. 
110 That is, " contracts for pecuniary interest concluded in writing between one or more economic operators 
and one or more contracting authorities and having as their object the execution of works, the supply of 
products or the provision of services ". The concept of concessions has been the subject of separate 
initiative (i.e. concessions impact assessment). 
 
EN 108   EN completed by a number of important ECJ judgements111 for example Commission vs. 
Germany, Donau-Wald case112 or Helmut Müller case113 meaning that there is no 
longer one clear source of information for CAEs.  
Under the current legislation, the category of  purchaser together with the type and 
value of the items being bought determine wh ich procurement rules apply. Basically, 
the current Directives apply to the award of works, supp lies and service contracts, 
whose estimated value, before V.A.T. equals or exceeds the relevant threshold114. 
Different thresholds apply ac cording to the purchaser (i .e. central or sub-central 
contracting authorities or contracting entities) and th e subject matter (goods, works 
or services). Many stakeholders call for the threshold values to be increased, thereby 
simplifying the process for CAE and en terprises by removing a number of 
transactions from the scope/ application of the Directives . They also que stion why the 
thresholds for defence and utilities are hi gher (for supplies and services) than for 
purchases covered by the Classic Directive and/or why inflation has not been taken 
into account (the current thresholds da te from the 1994 GPA). On the other hand, a 
limited number of stakeholders find the cu rrent "two-tier" system (where some 
procurement is subject to detailed EU  rules and the remainder to EU treaty 
principles) as unnecessary complicated. For example, many developers of e-
procurement platforms want to create one system which is used for all purchases – 
above and below thresholds.  
8.3.1.3.  A/B-type services 
Further complexity results from the different rules applicable to service contracts, 
(the so called A and B-type services)115. Recent research, comparing the Common 
Procurement Vocabulary (CPV) codes entered by a CAE against the A/B services classification which it also provides, identifies many errors and results in the wrong rules being applied. About 7% of transactions reported as  A-type services had CPV 
codes that matched the B-type definition a nd 5% of notices reported as B-type had 
CPV codes matching A-type services (see: Fi gure 7). The latter example raises more 
concern, as it indicates cont racts which should have followed the "full" procurement 
rules rather than the "simplified" regime . Given that on average €160 billion per 
annum are spent via service contract s (around 38% of the total EU public 
procurement market), these errors could be having a significant impact. 
Approximately 74% of services cont racts value refers to A-type group. 
                                                
 
111 Whereby it was clarified that the concept of public contract requires the work s, supplies and services 
which are the subject of the contract are carried out for the immediate benefit of the contracting 
authority. 
112 See: judgment of 18.11.2004 in Case C-126/03 Commission v Germany, paragraph 18. 
113 See: judgments of 25.3.2010 in Case C-451/08 Helmut Müller GmbH, paragraphs 47-54, and of 15 July 
2010 Commission v Germany, paragraph 75.  
114 The thresholds are revised each two years. The curr ent thresholds, applicable for the next two years as 
of 1.1.2010 and established through Commission Re gulation (EC) N°1177/2009 reach from € 4 845 000 
for works contracts to €125,000, €193,000 and €387,000 for supplies and services. 
115 When procuring A-type services, all procedural rule s have to be taken into account, as well as Treaty 
principles. These rules support th e entire procurement process from the content of a call for tenders 
through the selection of the proc urement procedure to the contr act award for both contracting 
authorities and economic operators. For B-type services the process has been “simplified” –the only 
requirements which must be met are the provision of: a CAN (and which the CAE can indicate whether 
it may or may not be published in OJ/TED); and technical specifications.  
 
EN 109   EN Figure 7): Share of services by classi fication (left-hand side graph) and the share of "category 27" services 
by classification (right-hand side graph)  
Actual CPV match
IIA IIBReported by purchasers
IIA IIB7%
5%
 Actual CPV match
IIA IIBService CPV
NO Yes14%
20%
 
Source: PwC study 
Category 27 within B-type services is ev en more prone to misclassification – as 
much as 20% of notices in this categor y had CPV codes that  refer to A-types 
services. There is also some evidence that  the A/B lists may not  be capturing the 
correct services. When this split was made, the A list included services where it was 
felt that a certain degree of  cross-border trade could be  expected; the B list were 
assumed to be less open to  cross-border purchasing. However the evaluation found 
that some of the services on the B list exhi bit a high degree of cross-border trade and 
vice versa. Replies to the GP consultati on did not indicate a clear consensus about 
how the distinction between A/B services  should be handled, although overall a 
slight majority felt it should be reviewed. 
8.3.1.4.  Legal uncertainty 
This complexity is one source of the legal uncertainty identified by many 
stakeholders. It represents the perceived risk of complaints and litigation among 
public purchasers and firms116.  
                                                 
116 Based on a survey among 5,500 CAEs (who have recently carried out public procurement process 
above EU threshold that ended up in a valid contract award published on OJ/TED) and 1,800 firms 
(who have recently won a procurem ent contract above EU thresholds),  source: PwC study, page 117. 
 
EN 110   EN  
Figure 8): Perceived risk of comp laints and litigation among public  purchasers (compared – above EU 
threshold public procurement versus be low EU threshold public procurement) 
12%13%10%
31%31%29%
0% 10% 20% 30% 40%NegotiatedRestrictedOpen
Much more and more
than below thresholdprocurement 
Much less and less than
below threshold
procurement 
 
Source: PwC study  
Figure 9): Perceived risk of compla ints and litigation am ong firms (compared – above EU threshold 
public procurement versus below EU threshold public procurement) 
18%21%22%
26%15%23%
0% 10% 20% 30%NegotiatedRestrictedOpen
Much more and more
than below threshold
procurement 
Much less and less thanbelow threshold
procurement 
 
Source: PwC study 
Such legal uncertainty translates, on the part  of many CAEs, into a fear of making 
errors during the public procurement pro cess and as a result , being subject to 
litigation. This fear of litig ation can then generate additional transaction costs to 
cover general legal assistance and advice throughout the procurement process, as 
well as, in the case where litigation occurs, as sistance in court proceedings. The costs 
associated with pre-empting or addressing litigation are important elements in the 
calculation of cost efficiency of procurement. A recent survey117, estimates that 
around 25% of the purchasers responding incurred some litigation costs when concluding contracts with va lues above the EU thresholds. On average, this 25% 
reported that eight person-days of costs were  assigned to what can be classified as 
litigation and the cost of complaints. This  implies an average for the full population 
                                                
 
117 See: PwC study, page 80. 
 
EN 111   EN of government authorities of around 2.6 pers on-days per transaction or about 350.000 
person-days annually across Europe fo r managing complaints and litigation118.  
As a result, CAEs may adopt a risk averse  approach, preferring to follow the full 
(more costly) procedures ra ther than a potentially si mpler regime which should 
apply, in order to avoid the risk of fu ture problems e.g. an enterprise which 
challenges the use of the simplified regime – even if the CAE is sure that it has 
followed the right procedure, it can still be  costly and time consuming to reply to the 
challenge of the enterprise. The above estim ate of cost of litigat ion (in terms of time 
spent) and the possible additional costs in curred by following the “safer” procedure 
leads to questions about how appropriate, proportional and cost-effective the current 
design and definition of the scope and cove rage of the EU public procurement rules 
is. 
8.3.1.5.  Conclusions 
To summarise, the current rules are complex and not always available in one place, 
leading to legal uncertainty on the scope and coverage of the Directives, particularly 
for CAE. The correct identification of act ors and transactions covered by the EU 
rules might be beyond the capacities of many pu rchasers, particularly if they do not 
need to apply these rules frequently e.g. sm aller local authorities. The current lack of 
clarity with regards of the scope of the Di rectives has resulted in a number of legal 
cases and judgments in this area. As a result, high-level legal analysis can be 
necessary to define the scope of the Direc tives and the correct application of those 
rules (especially in border-line cases). Le gal uncertainty generated by the current 
rules also leads to additional costs of lega l assistance and might result in risk averse 
behaviours of CAEs to avoid litigation. 
8.3.2.  Problem drivers in Procedures 
PROBLEM DRIVER: Disproportionate and inflexible procedures 
Stakeholders frequently raise issues about the disproportionate nature of procedures / 
processes that need to be followed in or der to procure works, goods or services by 
public authorities. They complain that public procurement costs too much, both in the time it takes and the resources it uses . In a recent survey, respondents were asked 
to compare public and private purchasing.  57% of firms concluding contracts 
following the most used procedure (the open procedure) found that it was cheaper or 
much cheaper to sell to the private sector, compar ed to 17%, who thought the 
opposite; 59% agreed that the private sect or process is less or much less time 
consuming, compared with 18% who found priv ate procurement to be more or much 
more expensive. Similar results were found for the other procedures – negotiated and 
restricted
119. 
                                                 
118 See: PwC study, page 80. 
119 See: section 8.8.2. 
 
EN 112   EN 8.3.2.1.  Disproportionate costs of proce dures for low value contracts 
The typical procurement procedure costs fo r all participants can be estimated at 
nearly €28,000120. This cost is split between CA Es, who typically pay €5,500 per call 
for tender launched) and firms, which pay €3,800 per offer submitted121. The total 
cost for all procedures covered by the th reshold is some €5.6 billion per annum or 
1.3% of the total value of contracts published122. 
The cost of the procurement process can, pa rticularly for contracts nearer the lower 
thresholds, account for quite a high percenta ge of the total value of a contract. 
Currently many transactions having valu es below thresholds are published in 
OJ/TED, meaning that most probably many CAEs follow EU rules and publish 
notices in OJ/TED although they are not obliged to do so. This implies that 
significant and potentially disproportiona te costs of following above threshold 
procedures are being incurred by these CAEs either voluntar ily or in order to avoid 
the possibility of falling foul of the rules if by any chance the contract turned out to 
exceed the relevant threshold.  
As seen on Figure 10), 18 % of supplies and services contracts concluded by central 
government are below € 125,000 euro threshol d. The total value of the contracts 
below threshold is minimal, only accounting fo r half a percentage of the total values 
for all contracts in the thre shold category. In th e range above the threshold level, the 
number of contracts accumulates quickly while the values accumulate much more 
slowly. Two thirds of all central govern ment services/supplies contracts under the 
scope of the threshold are below the € 500,000 le vel. The total value is much less, in 
total only 10 % is found at that level. 
Figure 10): Supply and service contracts published by central authorities Threshold
N 
Cumulative
€
Cumulative50 %
20 %80 %
050100150200250
0 100 200 300 400 500Number of contracts
Value of contract ('000) 
Source: Pwc study 
                                                 
120 To arrive at the above mentioned total cost of €28,000, the cost borne by businesses need to be 
multiplied by the number of bids submitted per procedure (a weighted average of 5.9 bids per procedure). 
121 PwC study, page 88. 
122 PwC study, page 89. 
 
EN 113   EN In the sub-central threshold category nearly 30 % of contra cts recorded have values 
below the threshold (se: Figure 10).  
Figure 11): Supply and service contracts published by sub-central authorities Threshold
N 
Cumulative
€
Cumulative20 %50 %80 %
050100150200250300350400
0 100 200 300 400 500Number of contracts
Contract value ('000)  
Source: Pwc study 
The cumulative value of th ese is about 1.6 % (2.2% for open procedure). The 
accumulation of contracts and values matc h very closely the central government 
patters.  
Whereas the works threshold is concerned,  as much as 70% of works contracts 
concluded are below € 4.85 million (see: Figure 12). 
Figure 12): Works contracts (by all types of authorities)  
0306090120
0123456Number of contr acts
Contract value (millions)80%
50%
20%
ThresholdN Cumulative
€ Cumulative
 
Source: Pwc study 
The above data confirm that many below threshold contracts are published in 
OJ/TED. This may be due to the fact that many CAEs “voluntarily” publish notices at the EU level. Whilst some of these c ontracts are published in compliance with EU 
provisions stating that individual contracts wh ich form part of a larger project must 
be published if the sum total exceeds the appropriate threshold, this does fully explain the phenomenon.  
 
EN 114   EN There is some evidence that CAEs publish CNs with no cross-border interest, as they 
find OJ/TED to be a well-functioning, toll-f ree portal that is regularly accessed and 
monitored by their domestic firms (especially, if no similar platform exist at the national level). Finally, some CAEs presumably follow the EU rules because of a lack of knowledge and misunderstanding of  what is and is not covered by the 
Directives.  
For these smaller value contracts, the cost of following the rules set out in the 
Directives constitutes a significant proportion  of the contract value itself. At the 
lowest threshold in the Directives, € 125' 000, total costs of purchase can amount to 
between 18 and 29 % of the contract value.  At € 390'000, the median contract value, 
costs reach between 6 and 9 %. Although the cost for each participant is lower than this total (about 1/6), thes e shares are significant.  
Figure 13): Total procurement cost (CAE and firms)  as share of contract values (HiLo estimates) 
125 390
0 %10 %20 %30 %
100 200 400 800 1 600 Share of contract
Contract value ('000)threshold median contract
 
Source: PwC study 
These findings are clearly influenced by the fact that many of th e contracts published 
are well below EU threshold. This may occur for a variety of reasons, a positive example being the case where as a result of the competition from following the Directives, the final price is reduced to a point below the original estimate, which 
was above the EU thresholds. However, as mentioned above, it may also be the case that uncertainty about what ru les to apply, linked also to a fear of litigation, causing a 
CAE to follow the stricter rules required  under the Directives. Some contracts are 
also published individually, but which form pa rt of one single proj ect where the total 
costs is higher than the thresholds
123. Nonetheless, the above mentioned costs of 
procedure and their share in the total final value of the contract concerned mean that 
for the low-value contracts these costs seem to be disproportionate. 
8.3.2.2.  Complexity of the rules on procedures 
Despite the savings identifie d by various studies and th e changes introduced in 2004, 
there are some calls for the current legisla tion to be further reviewed and simplified. 
                                                 
123 See: article 9 of Directive 2004/18/EC. 
 
EN 115   EN In 2009124, the High Level Group investigating ad ministrative burden concluded that 
this burden accounted for €216 million of the €234 million identified as the total administrative costs resulting from EU public  procurement rules (i.e. over 92%).  
A broad majority of respondents to the GP consider that the procurement rules are 
too detailed, although most MS and business representati ves disagreed with this 
opinion. This difference is not so surprising when one cons iders that it is  essentially 
CAEs, rather than firms, which have to understand and follow the rules, while MS representatives will often be those who have drafted the a ppropriate legisl ation in the 
first place. The perceived complexity is usua lly driven the detailed character of rules 
defining the procedures (for example, th e technical specificati ons, strict division 
between the selection and award st age of the evaluation, etc.).  
Similarly to the legal uncertainty referred to in Scope, uncertainty with regards to 
procedures results in fear of litigation that might lead to sup-optimal (risk averse) choices being made by authorities in orde r to avoid litigation. This perception is 
widely shared among stakeholders although th e available evidence in this respect is 
rather anecdotal. For example, in a recent survey run by the Local Government Association in the UK, the fear of litigati on is identified an one of the most common 
themes, with respondents stating for example: " the biggest fear facing my own staff is 
always regarding the risk of legal challeng e […]. This fear leads to cautious, risk 
averse procurement procedures that stif le innovation and the chance to deliver 
cashable savings"
125  
8.3.2.3.  Insufficient flexibility 
The current rules are also accused of lack ing flexibility and preventing CAE from 
achieving the best possible outcomes; in pa rticular many respondents to the GP call 
for more flexibility in the conduct of the procedure126. Initiatives where more 
flexibility could be permitted include: the opportunity to negotiate with bidders and 
the setting of time-limits; the organisation and sequence for examining selection and award criteria; allowing CA Es, in exceptional circumstan ces, to take account of 
criteria pertaining to the bi dder himself; and more generally to take into account 
previous experience with one or several bidd ers. In particular, contracting authorities 
operating under the framework of the Classic Directive complain th at their ability to 
negotiate with enterprises is too limited and ask for more flexibility
127 – or at least 
the same flexibility permitted by the Utilities directive.  
Data from the last five years show gr owing use of the competitive dialogue (a 
procedure which permits negotiation both on the substance of the contract and the 
content of a bidder’s reply) which was introduced in 2004. Although this procedure 
is the least frequently used, amounting to less  than one percent of contracts, the total 
                                                 
124 Report available at: http://ec.europa.eu/enterprise/policies/smart-
regulation/files/abst09_pubproct_en.pdf  
125 " The impact of EU procurement legislation on councils ", Local Government Group, December 2010, 
page 12. 
126 Responses to question 15 of the GP. 
127 In the Classic sector, the negotiated procedure w ith publication accounts for 8% of contract award 
notices and 14% of the total value, with an  average contract size of €6.6 million. 
 
EN 116   EN value involved is significantly higher – up to 8.6% of total value of contracts 
awarded in 2010 (5.2% in 2009), with a mean contract value of €40 million. 
Figure 14): The use of competitiv e dialogue over time (2006-2010) 
0.7%1.7%3.9%5.2%8.6%
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%10.0%
2006 2007 2008 2009 2010Competitive Dialogue -
Value
 
Source: PwC study  
The rapid take-up of the competitive dialogue procedure since its introduction, 
suggests that there was a need  for a procedure that allowed for more negotiation or 
dialogue also in the Classic Directive. Howe ver, use of this procedure is limited to 
very complex projects and hence does not fully meet the needs of contracting authorities.  
Finally, the perceived lack of flexibility of the current procedures is also a source of 
missed opportunities for society, preventi ng CAEs from responding effectively to 
strategic goals. The previously quoted surv ey of local authorities in the UK also 
points out that lack of flexibility of the procedures emerged as a challenge 
experienced in relation to EU procurement rules: " such a rigid regime stops local 
authorities from being able to take advantage  of innovative commercial offers that 
do not fit with the agreed  evaluation criteria"
128.  
8.3.2.4.  E-procurement 
Some of the existing provisions  and tools specified in the current Directives are not 
being used to their full poten tial. This is particularly the case for some of the 
electronic procurement (or e-procurem ent) solutions which could improve 
transparency and simplicity and ge nerate significant cost savings129. Recent figures 
from Deutsche Bank Research estimate that suggests "that a full switch to e-
procurement may save between € 50 to 75 billion on public procurement in the EU 
per year". As such, this lack of upta ke represents a missed opportunity. Although 
much work has been undertaken to in troduce e-procurement systems since the 
concept was introduced in 2004, the availabili ty of a system has not yet translated 
into widespread use. The evaluation of  the 2004 Action Plan for e-procurement 
estimated that even in the first mover c ountries, e-procurement accounts for less than 
5% by value of total procurement. The excep tions are seen in countries which have 
                                                 
128 " The impact of EU procurement legislation on councils ", Local Government Group, December 2010, 
page 13. 
129 See: the evaluation of the 2004 Action Plan for e-procurement.  
 
EN 117   EN mandated the use of e-procurement e.g. Port ugal (all procurement) and Lithuania. 
Equally the systems which are being devel oped differ significantly from country to 
country and even region to region, creat ing a risk of market fragmentation and 
increasing costs for suppliers who have to invest time in understanding how to use 
the different systems as they move between different CAEs.  
There is certain inertia on th e part of CAE and, to a lesse r extent, businesses to move 
towards using e-procurement. The evaluation highlighted a number of key challenges 
facing e-procurement which need to be addre ssed if greater take-up is to be achieved 
and risks to fragmenting the EU public pr ocurement market are to be addressed.  
Authentication and integrity measures also  differ significantly between systems. 
Here there are particular issues relating to  the very technical measures which were 
initially promoted at EU level. Some MS  have adopted these solutions which at 
present are very often national solutions , creating barriers to non-domestic firms 
trying to bid in another count ry and creating a conflict/tens ion with the ability of e-
procurement to actually open up market s by over-coming distance barriers to 
bidding. Others have adopted less technical approaches wh ich could be less secure 
(although there is no hard evidence available to support this belief at present) but 
which are more open to a wider range of bidders.  
Sometimes the problem stems from over sp ecification – for example, the DPS, a 
purely electronic tool intr oduced in 2004 to create an open repetitiv e purchasing 
system is specified in great detail but does not seem to work in its current form. 22 out of 27 MS have transposed the provisions for this option into their legislation, but 
many have also felt it necessary to add further clarification and despite these good 
intentions, only one MS ha s currently implemented a working system. Given the 
growing use of framework agreements, another form of repetitive purchasing albeit a closed system, and the interest  shown by the transpos ition of the option, this points to 
problems in the system design which should be addressed. 
Equally some problems are due to a lack  of detail – for ex ample electronic 
catalogues, a powerful tool for standardis ing and simplifying bid responses are only 
mentioned in a recital. Standards which could have reduced the emergence of technical barriers and aided in the integration of certa in features are only now 
beginning to emerge.  
8.3.2.5.  Aggregation of demand 
Other examples of tools provided for in th e Directives and not used to its full 
potential are instruments that facilitate a ggregation of demand (for example CPBs or 
a tool frequently used by CPBs i.e. framework agreements).  
In the recent years, an increase in th e use of framework agreements and joint 
purchasing
130 has been observed. The values over time show large changes. For joint 
purchasing, there has been a considerable  development - from constituting a few 
                                                 
130 While using the term "joint purchasing", we refer to data collected from notices published in OJ/TED, 
where CAE reported that they “purchase on behalf of  other contracting authorities”. The definitions and 
interpretation of this concept may therefore include both centralized purchasing bodies and other joint 
purchasing arrangements,(for example purchases made by several local authorities). 
 
EN 118   EN percent of total values to reaching about 22% in 2010. The values involved in 
framework agreements are also increasing an d reached even higher levels - at about 
25 % in 2010. About €85 billion of framewor k agreements were concluded in 2010.  
Figure 15): Use and values of techniques over time as share of total NumberValue
0 %5 %10 %15 %20 %25 %
2006 2007 2008 2009 2010*Framework agreement
0 %5 %10 %15 %20 %25 %
2006 2007 2008 2009 2010*Joint purchasing
 
Source: PwC study 
Both these techniques are frequently used  together - joint purchasers tend to use 
frameworks more extensively than the gene ral population (i.e. the share in number of 
notices rises from 11% in the overall use to  25% when joint purcha sing is used, see: 
Figure 16).  
Figure 16): Share of joint purchasing using frameworks  
ATBEBGCZ
DEDK
EE
ESFIFRGB
GRHUIE
ITLTLVNLNO
PLPT
ROSE
SISK
EEA30
0 %20 %40 %60 %
0 % 20 % 40 % 60 %More
Less
than overall useShare of joint purchasing using frameworks
Overall use of frameworks  
Source: PwC study 
The key problems related to the observed trends towards the aggregation of demand 
are two-fold – on the one hand, weakly or improperly regulated aggregation may be 
the source of threats to competitiveness as it may foreclose the markets (over time and in value terms). However, the recent ev aluation suggest that the current rules are 
not sufficiently equipped with mechanisms that ensure fair competition when contracts are aggregated (e.g. fo r example by framework agreements
131).  
Secondly, wise use of instruments aggreg ating demand might generate economies of 
scale and give MS leverage to conduc t strategic procurement policies more 
                                                 
131 Source: PwC study, page 114 .  
 
EN 119   EN efficiently than without aggregation. At th is moment, there is no indication that it is 
really happening and the society loses opport unities and gains that could have been 
generated through professional, stra tegic purchasing c onducted by CPBs.  
8.3.2.6.  Conclusions 
In summary, problems relating to a certain lack of flexibility and disproportionate 
nature of the current procedures hamper efficient responsiveness to structural changes in the markets and create cost inefficiencies. They also create missed 
opportunities for society and together result in the best value fo r money and society 
not being achieved.  
8.3.3.  Problem drivers in Strategic public procurement  
PROBLEM DRIVER: Uncertainty and insufficient provisions with regards to integration of other policy goals in 
public procurement 
The prime aim of the current rules is to ensure that when the public sector purchases 
goods, services or works in the market pl ace, it does so in a transparent manner, 
treating all potential suppliers or service pr oviders equally and seeking the offer that 
provides the best, or most appropria te, quality at the best price.  
8.3.3.1.  Insufficient provisions with regards to  the integration of strategic goals 
Given the significant and influential role of  public procurement in the economy, it is 
clear that it has the poten tial to impact on other policies (EU2020 objectives). The 
most frequently mentioned main areas for future strengthening of the rules are: 
environmental sustainability; respect fo r certain social conditions; and supporting 
innovation. In response to demands to be able to use public procurement rules to support other strategic goals, changes were introduced in 2004 to  help CAEs achieve 
the aims of " sustainable and non-inflationary grow th respecting the environment " 
and " a high level of employment and of social protection ". The Commission has 
published a handbook on environmental public  procurement and most recently a 
Guide to taking account of  social Considerations in Public Procurement.
132 These 
guidelines explain the extent to which environmental and social considerations can 
be taken into account within the existing legal framework and according to existing case law from the Court of Justice of th e European Union. They provide general 
rules and examples of various ways in whic h environmental or social considerations 
can and cannot be taken into account in di fferent parts of the procurement process. 
Findings of a recent survey of CAEs indica te that the majority have incorporated 
environmental considerations in their proc urement strategies, although there is still 
quite a difference between the frontrunners  and those lagging behind in the Green 
Public Procurement (hereafter: GPP) stakes . It is not clear to what extent the 
European Commission Guidelines have been  effective in clarifying the situation, 
particularly for social considerations wher e the relevant guidelines will not yet have 
been available. 
                                                
 
132 European Commission, Buying green! A handbook on environmental public procurement, Luxembourg 
2004 and European Commission, Buying Social, A Guid e to taking account of social Considerations in 
Public Procurement, Luxembourg 2010. 
 
EN 120   EN Figure 17): Uptake of GPP policies by MS 
 
Source: Adelphi, study 
Stimulation of innovation through  the wider use of variants  does not appear to be a 
widespread choice at present. In fact, there is a universal trend over the last few years 
in all MS towards allowing variants in fewer cases133. Some measures or incentives 
may be needed if it were considered  desirable to reverse this trend.  
As the current rules are non-pr escriptive and leave plenty of  leeway to the CAE, the 
Commission has also publishe d a number of communications134 intended to clarify 
the practicalities of how to integrate ot her policy objectives whilst still remaining 
compliant with the public procurement regime. As Figure 17) shows, the most 
common means of incorporating environmenta l considerations is in the technical 
specifications, although the use of award criter ia and requiring spec ific technical or 
professional qualifications are also relatively frequent. 
                                                 
133 Except for Ireland, see: the Evaluation Report, pages 104-5.  
134 An interpretative communication explaining how environmental considerations could be integrated 
within procurement practice (2001); The Commission Communication on Integrated Product Policy 
(2003); A handbook on environmental public procurement (2004); The Commission Communication on 
the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan (2008). 
 
EN 121   EN Figure 18): Where do you address environmenta l objectives in your tender documents?  
 
Source: Adelphi study 
These figures are based on the results from th e European level that uses the stratified 
results from 30 EEA MS whereas the comp arison of the front-runners (Denmark, the 
Netherlands, Norway, Sweden, and the UK), is based on the aver age percentages of 
22 MS. The frontrunners use more sections and also use them mo re often than the 
other MS. 
Figure 19): Frontrunners compared with other MS 
 
  
Source: Adelphi study 
However, various stakeholders find that prob lems remain - both in practical terms of 
how to apply the rules correctly and becau se they feel that not enough weight has 
been given within the public procurement regime to achieving these strategic aspects.  
There is also the possibility that pursui ng such strategic objectives may ultimately 
lead to a fragmentation of these differe nt procurement market s across the EU. Many 
MS have undertaken various in itiatives on national or regional level to give effect to 
further integration of other policies in  public procurement. 27 out of 30 EEA 
countries have adopted national action pl ans to support green procurement, often 
involving the setting of targets in term s of proportion of spend on products or 
services having greener characteristics. A pproximately half of MS have implemented 
action plans to support integration of social objectives. Two counties have 
established strategies fo r innovative procurement135. It seems that even when similar 
                                                 
135 Adelphi study, page 53. 
 
EN 122   EN objectives have been identified, they are being implemented through different 
commitments / means and to different extent across MS. 
8.3.3.2.  Uncertainty with regards to extent of integration of strategic goals 
Even with the existing guidance, CAE are unsure how far they can go in integrating 
these other strategic go als. Some of this uncertainty stems from a lack of specialist 
knowledge and competence – sometimes in a given strategic area, sometimes in terms of adapting their public procurement practices to absorb these wider strategic issues, whilst remaining compliant with the Directives. The problems encountered by 
many CAE relating to the complexity of th e current EU rules can only be magnified 
when they are also asked to integrate and often police othe r policy goals when 
procuring a particular item. Equally, for many of these policy areas, the evaluation 
found that there is a lack of appropriate national guidance setting strategic objectives 
and linking them to public procurement in particular, meaning that individual CAE 
need to identify targets and take res ponsibility for policy areas where they 
themselves may have little experience and expertise. In certain areas, particularly in relation to innovative purchases, the resu ltant uncertainty a nd risk/fear of non-
compliance appears to be proving too grea t, deterring many CAEs  from using public 
procurement to support and achieve these strategic goals. 
Several stakeholders make the argument that the current system rewards compliance 
with the Directives. They find that no ince ntives are built into the existing public 
procurement regime to incentivise CAEs to  use their procurement to support these 
wider strategic objectives. Rather, they f eel “hamstrung” by the current rules, which 
restrict their freedom by insisting that a ny selection/award/performance criteria show 
a clear link with the subject of the contract. Hence they are not able to add the specifications they would like. A comm only used example is the inability 
of/difficulty incurred by CAEs wishing to support for example Fair Trade objectives, 
fair employment conditions, etc.  
However, results from the survey shows that while CAEs use social responsibility 
considerations most frequently as re quirements for promoting employment 
opportunities and decent working conditions, fair trade and accessibility objectives are also actively pursued by some CAEs.  
 
EN 123   EN  
Figure 20): What kind of specific requirements do you set with regard to socially responsibility objectives 
in your tender documents? 
 
Source: Adelphi study 
It is worth noting that 20% of those who do not include any specific social 
considerations in their re quirements nonetheless say that  they do take social 
considerations into account  in procurement. These CAEs may be including social 
issues in their contract terms and conditions or by reference to na tional legislation or 
International Labour Organi sation (ILO) standards. 
The GP responses on the issue of using public procurement in support of other 
policies show a division in opinions between bu sinesses and contracting authorities 
on the one side and civil society on the other. A majority of businesses and 
contracting authorities cons iders the current rules on technical specifications as 
sufficient. A large majority of civil so ciety organisations have a less positive 
opinion.136 A majority of respondents is agains t introducing obligations on "what to 
buy" in the EU public procurement rules. Only civil society or ganisations are in 
favour of this idea.137 
Whilst a majority of stakeholders, notably majority of contracting authorities, civil 
society organisations and MS, agree that th e Directives should be clearer on how to 
include environmental and so cial criteria in the award phase, there is low overall 
support for allowing public procurers to choose bidders on factors which are not 
related to the subject-matter of the c ontract, although the responses were quite 
varied. 138 The Network for Sustainable Development in Public Procurement 
Network, for example, consisting of trade unions and non governmental 
                                                 
136 Responses to question 62 of the GP. 
137 Responses to question 83 of the GP. 
138 Responses to question 79 of the GP. 
 
EN 124   EN organisations with social and environmental interests, emphasised that best value in 
public contracting is not simply the lowest price but must take account of social, ethical and environmental benefits
139.  
Stakeholders from all groups want to see further promotion and stimulation of 
innovation through public procurement. A majo rity of business and public authorities 
shares the view that additional measures are needed in order to strengthen the 
innovation capacity of SMEs.140  
Most MS have put in place some measures to encourage the proc urement of greener, 
more sustainable and socially responsible products and services as well as making 
public contracting more open and accessible to SME and innovative solutions. However the degree to which contracting en tities actually put these policies into 
practise varies widely both across and within MS. As a result suppliers are 
potentially faced with a variety of technica l specifications, citing different standards, 
certificates or labels  in different MS.  
Figure 21): Front-runners in encouraging innovation compared with the other MS 
 
  
Source: Adelphi study 
The MS which are frontrunners in terms of  encouraging innovation (Finland, the UK 
and the Netherlands) refer to the use of EM AT criteria more frequently than other 
MS as a way to encourage innovation,  along with functi onal requirements, 
acceptance of variants and life-cycle costing.  
The relative importance of the use of life- cycle costing as a means to encourage 
innovation by the frontrunners compared w ith other MS may show how innovation 
and sustainability may be interlinked. 
8.3.3.3.  Conclusions 
In summary, some stakeholders feel that the current rule s do not respond sufficiently 
to the demand to support wider strategic goa ls and that CAEs are prevented from 
achieving these wider objectives by the complexity of the existing public 
procurement rules. Also, the different a pproaches introduced acr oss the EU, may be 
creating national rather than Europe-wid e markets. This may present a lost 
opportunity to create a sufficient public sect or demand for these strategic purchases 
within the internal market and enable them to compete effectively with more 
                                                 
139 In practice 70% of all contracts are awarded on th e basis of EMAT rather than on lowest price. 
140 Responses to questions 91 and 97 of the GP. 
 
EN 125   EN traditional products offering lower levels of sustainability e.g. lower environmental 
protection, less social improvement. 
8.3.4.  Problem drivers in Access 
PROBLEM DRIVER: Market access barriers 
One of the key objectives of public procur ement policy has always been the open and 
free access of all European undertakings to public contracts in Europe. Fragmented 
national procurement markets were consid ered to be economically inefficient. 
Discriminatory procurement, where it occu rred, would constitute a barrier to trade 
and reduce trade flows.  
8.3.4.1.  Low cross-border procurement 
Although cross-border access is facilitated by the high transparency created by the 
Directives, this has not translated into part icularly high levels of actual cross-border 
trade. Direct cross-border procurement141 accounts for 1.6% of awards or roughly 
3.5% of the total value of contract aw ards published in TED during 2006-9. In 
addition to direct cross-bor der procurement, there is a considerable volume of 
indirect cross-border procurement142. This channel accounted for 11.4% of awards 
published in TED and 13.4% by value during 2006-9. As the above figures suggest, 
the dominant role in cross-bo rder procurement is played by purchases from local 
affiliates of foreign companies and not by di rect purchases (i.e. not by the channel 
that is directly influenced and governed by the Directives). 
Figure 22): Direct cross-border proc urement and indirect cross-border through affili ates 2006-2009 
12,4%13,7% 13,9%
11,7%11,2% 11,4%
3,2%3,7% 3,6%
1,6% 1,8%1,4%
0,0%2,0%4,0%6,0%8,0%10,0%12,0%14,0%16,0%
2007 2008 2009indirect cross-boder
through affiliates(value)
indirect cross-boderthrough affiliates(number ofcontracts)
direct cross-border
(value)
direct cross-border
(number ofcontracts)
 
Source: Rambøll study 
                                                 
141 I.e. when firms tendering from their ho me market win contracts in another MS. 
142 I.e. when firms bid for contracts in another MS  through their foreign affiliates or subsidiaries. 
 
EN 126   EN 38% of contracts above EU threshol ds are awarded within the distance143 of 50 km 
and 50% of contracts with in the distance of 100 km144 (see: Figure 23).  
Figure 23): Cumulative shares of awarded co ntracts in relation to  distance (2007-2009) 
0%5%10%15%20%25%
0-10
10-2020-3030-4040-50
50-60
60-7070-8080-90
90-100
100-110110-120120-130
130-140
140-150150-160160-170
170-180
180-190190-200200-210
210-220
220-230230-240240-250
250-260
260-270270-280280-290
290-300
300-310310-320320-330330-340
340-350
350-360360-370370-380
380-390
390-400400-410410-420
420-430
430-440440-450450-460
460-470
470-480480-490490-500
500-510Share of awards
Distance between awarding authority and economic operator in kilometersDistribution of awards in relation to distance 
 
Source: Rambøll study 
The above data shows that half of aw arded contracts are concluded within 
geographic proximity. An average distance for each type of contract (i.e. goods, 
works and services) is different and conf irms that supply contracts are the most 
tradable, as the average distance between the buyer a nd seller is 232 km (i.e. 
significantly more than 102 km for works and 123 km for services).  
8.3.4.2.  Import penetration lower than in the private sector 
At the macroeconomic level, public sector import penetration can  be influenced by 
various structural factors de termining overall intensity of  its cross-border purchases 
(trade flows). Using estimates based on the analysis of national accounts data from 
the five-yearly symmetric inpu t-output tables collected it appears that total import 
penetration145, has increased from 14.1% in 1995 to 17.4% in 2005. This would 
indicate a general trend towards more cr oss border trade in the overall economy and 
also more cross border sourci ng of inputs by public sector. 
                                                 
143 Distance between a CAE and a winning firm.  
144 Rambøll study, page 81. 
145 Understood as the proportion of imports to the total use (of selected sectors or total economy). 
 
EN 127   EN Table 23): Import penetration of public and private sectors in 1995, 2000 and 2005 
Year Import 
penetration of public sector Import 
penetration of private sector Import 
penetration of total economy Gap between 
public and private 
(percentage 
points) 
2005 7.5% 19.1% 17.4% 11.6 
2000 6.5% 18.7% 17.1% 12.2 
1995 5.1% 15.6% 14.1% 10.5 
Source: Rambøll study 
However this data also shows that impor t penetration in the public sector is 
significantly lower than in the private sector, suggesting that the public sector is less open and integrated in the general economy as than the private sector. There are both supply and demand side explanations. Looking at the demand side, this difference in 
import penetration can be partially explai ned by the differences in the kinds of 
purchase made by government authorities as  compared to private companies. The 
differences in the structure of purchases by these two sectors was pointed out in an 
earlier evaluation study by Europe Economics
146 as a potential reason for differences 
in public and private import shares.  
In 2005 60% of public sector demand was due to three main product groups: public 
administration (25.3%); health and social  services (21.2%) and education (14.3%). 
Their joint import penetration ra tio is close to zero (0.1%),  reflecting perhaps that in 
general they are locally pr ovided services and by their very nature, less tradable 
services than supplies. This has a signifi cant affect on the public  sector’s propensity 
to import - the three largest sectors are not fully exposed to competition due to either 
exclusions, exemptions or other regulator y arrangements, such as reimbursement 
through statutory health insurance, that place them outside of the full scope of 
application of EU public procurement ru les (or even the rules governing the 
procurement of B-type services).  
Finally, although there seem to be reason s to explain lower levels of import 
penetration in terms of the structural differe nces between the two se ctors, the scale of 
the gap observed may still raise concerns about the existence of discriminatory 
practices on the side of pub lic purchasers. In this cont ext, Trionfetti (2000) argues 
that " if the import share of government is pers istently and substantially lower than 
the import share of the private economy, it is likely that it is the result of a 
discriminatory procurement practice (implicit or explicit) "147. 
                                                 
146 Europe Economics (2006), Evaluation of Public Procurement Directives, London 2006, page 106. 
147 " Trade effects of discriminatory public procurement: a guide to measuring the degree of discrimination 
and associated budget costs ", Federico Trionfetti, Centre for Economic Performance, The London 
School of Economics and Political Science, Paper prepared for the International Trade Centre 
(February, 2000). 
 
EN 128   EN 8.3.4.3.  Reluctance to bid cross-border amongst firms 
As mentioned previously, procurement contr acts awarded directly across borders are 
still limited (3.5% in value terms and 1.6% in the number of tran sactions). This can 
be explained by both supply and demand factor s. Previous section explained that low 
levels of import penetration may be due to the composition of public demand, which 
is dominated by services that are sourced locally. On the supply side, recent survey 
data shows that companies are also reluctan t to tender cross-border. In a recent large 
scale survey around 73% of firms, otherwise active in public procur ement, said that 
they have not made any cross-border tenders  in the last three years (ref. Figure 24). 
The fact that the average success rate when bidding abroad is lower than when bidding at home may go  some way to explain this behaviour. 
Figure 24): Participation in cross-b order tenders – survey of firms  
72.311.14.95.36.4
7610.976.1
02 0 4 0 6 0 8 0never1 to 5 times5 to 10 times10 to 20
times> than 20
times
participation overall
participation abroad
 
Source: Rambøll study 
Asked about the reasons for this low le vel of participati on in cross-border 
procurement, the major reason given appe ars to be simple inertia: 61% of 
respondents identified their general lack of  experience in doing business abroad. It 
would appear that most firms do not bi d for cross border procurement opportunities 
simply because thy have not done so befo re (see: Figure 25) below). The second 
major obstacle identified was language barri ers. Further confirmation that language 
matters, comes from the analysis of c ontract awards by c ountry. An econometric 
analysis of contracts awarded between 2007 - 2009 shows a relationship between the 
existence of common language borders and the chance of awarding a contract to a 
foreign firm i.e. confirming that the proba bility of direct cro ss-border procurement 
award in a country that shar es a language with another MS is significantly higher 
than in MS with a different language (by 21.3%). Indeed, the anal ysis of contracts 
published in OJ/ TED confirms that common la nguage helps, as 75% of the contracts 
awarded directly cross-border  by Irish authorities are aw arded to firms from the UK. 
84% of direct cross-border awards made by Austrian authorities are concluded with 
businesses from Germany148. Legal requirements leading to market entry barriers 
                                                 
148 Rambøll study, page 79.  
 
EN 129   EN were named as the fourth most importan t obstacle (only 28% of firms do not rank 
this problem high). 
Figure 25): Business' view on several possible obstacles to cross-border bidding 
61.3
50.3
48.6
47.6
36.6
34.6
34.2
32.5
24.9
24.5
24.027.1
24.4
26.5
23.9
29.9
26.6
28.9
25.9
40.4
35.2
35.15.1
13.1
15.3
9.9
16.9
20.4
18.9
21.1
17.9
14.9
21.86.5
12.3
9.5
18.6
16.6
18.4
18.1
20.5
16.8
25.5
19.10% 20% 40% 60% 80% 100%
Lack of experience with doing business abroad
Language barriers
High extent of com petition with national bidders
Legal requirements leadin g to market entr y barriers 
in the awarding country (e.g. special allowances 
necessary for offering services abroad)
Cost level in general hi gher at home than abroad 
(e.g. because of labour costs etc.)
Resources necessary for participating in cross-border 
tender procedures higher compared to procedures in 
home country
Unfamiliar formal requirements demanded (e.g. 
certificates to provide, etc.)
Risks im posed b y possible currenc y exchan ge rate 
fluctuations
Additional costs due to geographic distance, i.e. 
implementation of contract more costly compared to 
delivery close to own location
Different kinds of technical s pecifications that are 
demanded compared to experiences in your own 
Member State (e.g. different IT standards and the 
like)
Tax or social insurance differences leadin g to cost 
disadvantagesBased on your experience, how do you assess the relevance of the following possible obstacles?
To a high extent To a medium extent To a low extent Not at allN = between 260 and 274
 
Source: Rambøll study  
Although risks related with currency exchange  rates are only ranked as the sixth most 
important obstacle, their general importanc e should not be overl ooked. Participation 
in the Euro area has been identified, in a separate exercise, as an important factor 
facilitating direct cross-border procurem ent (being a member of the euro area 
enhances the chances of a contract to be concluded cross-border by 97.1%149). This 
shows that a common currency matters even more than a common language.  
In order to investigate the issue of reluctan ce to bid cross border in greater detail the 
Commission conducted a separate  survey using the European Business Test Panel 
(EBTP).150 This (smaller) complementary survey concentrated on the reasons why 
                                                 
149 Rambøll study, page 79. 
150 http://ec.europa.eu/yourvoice/ebtp/consultations/2011/cross-border-public-procurement/index_en.htm 
 
EN 130   EN firms did not bid cross border and shows th at administrative obstacles have a major 
negative impact on firms (43% of firms wh ich had competed for cross border public 
contracts found that country-s pecific formal requirements were a major obstacle in 
cross-border procurement). 
The results of the evaluation confirm that direct cross-border participation on public 
procurement markets remains low. As a result,  the direct cross-border success rate is 
also low. This is driven by various entry barriers that still exist on the markets and 
deter firms from participating in invitati ons to tender in other MS. The identified 
entry barriers can be principally grouped into natural ones (such as languages or 
geographic distance, the very nature of pub lic sector markets) and regulatory. Within 
the regulatory barriers mentioned by comp anies, some of them stem from the 
Directives, but many other are driven by le gal provisions stemming from other legal 
acts (such as tax or social security insurance differences leading to cost disadvantages). A frequently  repeated regulator y barrier is linked to the mutual 
recognition of standards or cer tificates (including certificat es or documents that need 
to be provided while submitting offers).  
8.3.4.4.  Market access barriers (SMEs in particular) 
Questions are frequently asked about the proportion of public procurement which is 
awarded to SMEs. A recent study estimated that between 2006 and 2008, SMEs won between 58% and 61% of above threshold public contracts, representing between 
31% and 38% of the total value of all contracts
151. There is a signi ficant variation 
across MS, ranging from countries where SMEs won 79% of contracts (in value 
terms) to MS where this proportion is 17%152 (ref. Figure 26 below). 
                                                 
151 Source: GHK study, page 22. 
152 The results reveal structural diff erences across MS – as a general trend SMEs are more dominant in 
smaller countries. 7 of the 8 MS with populations below 5 million are positioned in the top half of the 
table when arranged by the share SMEs win. From amongst the six largest MS, only France falls into 
this category. 
 
EN 131   EN Figure 26): Share of SMEs in the total value of contracts awarded, by MS (total for 2006-2008) 
16
5
7
12
15
7
8
7
4
5
7
7
3
533
11
25
13
4
16
21
17
6
21
18
16
14
1430
47
29
28
33
25
19
23
35
19
18
21
26
2321
38
38
47
48
51
53
53
55
55
56
57
57
5779
62
62
53
52
49
47
47
45
45
44
4343
430 2 04 06 08 0 1 0 0
BG
L
V
MT
LU
GR
EE
HU
SK
LT
DK
FR
SI
IE
NL
Micro Small Medium Large  
7
7
11
6
6
5
4
6
3
3
6
4
3
116
19
7
14
11
11
17
11
13
10
5
6
6
619
15
21
17
18
17
13
17
15
16
13
12
12
1059
59
61
63
65
66
66
66
69
70
76
78
78
8341
41
39
37
35
34
34
34
31
30
24
22
22
170 2 04 06 08 0 1 0 0
DE
SE
BE
FI
IT
AT
CY
EU-27
RO
PL
GB
PT
ES
CZ
Micro Small Medium Large 
Source: GHK  
The study concluded that overall the share of SMEs in winning public procurement 
contracts has not changed si gnificantly, since 2002, althoug h it noted an increase in 
the proportion of successful SMEs in 2008. 
The size of contracts is th e major barrier to SMEs participation: they do not have 
access to the resources or capacity to bid for or fulfil large public contracts. Contracts 
above €300,000 appear to be generally be yond their capacity. Ho wever it is also 
clear that when larger procurement projec ts are subdivided into smaller lots, SMEs 
are more likely to win contracts for the individual lots.  
Without judging whether or not the SMEs ar e or are not disadvantaged in above EU 
threshold public procurement, the same study points out however that SMEs face a number of barriers in accessing public procurement markets.  
Replies form a recent survey of 887 companies from 19 MS shows that the most 
frequently encountered barrier is the ove r-emphasis on price (54% of companies 
experienced it ‘always’ or ‘often’). This is followed by unfavourable (i.e. too long) 
payment terms (40%) and late payments (38%). And excessive administrative burden 
 
EN 132   EN is also seen as an often-occurring problem (34% of companies experienced it 
‘always’ or ‘often’), and many companies also complain about unclear requirements 
set out by public authorities (30%). The le ast frequently mentioned obstacles to 
procurement are too large contract valu es (7%) and that joint fulfilment of 
requirements by members of the consortium is not allowed by the procurer (5%)153. 
Table 24): Problems faced by bidd ers in accessing public procuremen t markets, by company size class 
(proportion of companies using the source  'always' or 'often', in percentage) 
 Potential problems Micro Small Medium Large Total 
Over-emphasis on price 58 55 51 55 54 
Long payment terms 52 42 38 36 40 
Late payments 47 36 39 35 38 
No debriefing 43 36 33 36 36 
Administrative burden 45 34 35 30 34 
Lack of clarity 38 28 29 28 30 
Limited options for 
interaction 30 23 19 22 23 
Disproportionate financial 
criteria 34 21 18 17 20 
Insufficient time to bid 27 23 14 20 20 
Lack of information on 
opportunities 23 22 18 17 19 
Tenders not evaluated 
fairly 16 14 26 30 19 
Disproportionate technical 
criteria 18 18 14 13 15 
Large contract value 22 15 5 1 7 
Joint fulfilment of criteria 
not allowed 8 5 6 4 5 
Source: GHK study 
                                                 
153 GHK study, page 50. 
 
EN 133   EN 8.3.4.5.  Conclusions 
To summarise, the current data reveal th at the full potential for opening-up public 
procurement to EU-wide competition is not being realised as the direct cross-border procurement remains at relatively low levels and SMEs participation remains lower than their importance in the economy. This  means that public procurement markets 
remain serviced mainly by national or large- size suppliers and that important market 
entry barriers remain despite th e existence of the Directives.  
8.3.5.  Problem drivers in Governance 
PROBLEM DRIVER: Different administrative models acr oss MS leading to different public procurement 
capacities in the EU and different capabilities of CAEs 
In their current form, the public proc urement directives do not contain any 
instructions to MS on how to organise their individual public procurement capacity 
and resources. This has, quite naturally, le d to a range of very different set-ups and 
abilities being developed. Ad ministration is often organi sed in several layers – 
sometimes reflecting the national/regional/ local divisions, othe r times devolving 
responsibilities across different (generally  central) government departments. Most 
MS have a national central body dealing with  procurement which is responsible for 
managing public procurement. As the evaluation notes: "The national legal basis for 
these bodies, the hierarchical lines of s ubordination and the functions that such 
bodies are empowered with vary considerably across MS." 
8.3.5.1.  Differences in national organi sation of public procurement 
According to a 2007 Sigma paper154 (no. 40) the main public procurement functions 
can be grouped under the following headings : drafting legislation (implementing 
relevant EU Directives and in some instances, national legislation related to areas not covered by said EU legislation); monito ring; control; international relations; 
guidance and support; publication; informa tion provision. Sometimes these functions 
may overlap, again depending on the set-up th at has been put in place. Generally 
these functions are held by the national central body dealing with procurement but 
they could also be located in other in stitutions (e.g. the Mi nistry of Economy, 
Ministry of Finance, etc).  
The same study grouped MS subject to the st udy into thre e categories: centralised, 
semi-centralised and decentralised, depending on the concentration of procurement functions held by their respective institutio ns. MS with a centralised procurement 
structure
155 have their procurement functions allocated to one or two central 
institutions. MS with a semi-centralised structure156 are characterised by a mixed 
concentration of procurement functions al located to a limited range of institutions 
placed at various levels in the administra tion. Finally, the MS with a decentralised 
                                                 
154 Central Public Procurement Structures and Capacity in Member States of the European Union, 01 Jan 
2007, No.:40, available at: http://www.oecd-
ilibrary.org/docserver/download/ fulltext/5kml60qdqq0n.pdf?expi res=1312366990&id=id&accname=gu
est&checksum=E536400B8F5226F16E6CCEB01EFE79F3  
155 Bulgaria, Cyprus, Czech Republic, Estonia, Hunga ry, Latvia, Lithuania, Malta, Poland, Romania, 
Slovakia. 
156 Austria, France, Germany, Irel and, Italy, Luxembourg, Sloven ia, Sweden, the United Kingdom. 
 
EN 134   EN procurement structure157 have a dispersed concentra tion of procurement functions 
allocated to several institutions at vari ous levels in their administrations.  
At least eight countries158 have also introduced additional supporting bodies which 
provide guidance and support relating to national public procurement policy and 
processes. Many MS also have distinct inte rnal or external structures tasked with 
supervising and/or controlling the public procurement system. Most of the time, 
control is exercised by a national audit body (i.e. Court of Auditors or State Audit 
Office). Some of the newer MS have create d specialised bodies within government to 
oversee supervision and control. Only Ital y has taken advantage of the provisions 
contained in Article 81 of the Classic Directive and Article 72 of the Utilities Directive and established an independent Authority for the Supe rvision of Public 
Contracts (covering central and sub-central procurement).  
Differences in organisation of public procurement across  MS are present in many 
areas. For example the CPB was included in  the 2004 Directives as an option, which 
with few exceptions
159 most MS have implemented. As with e-procurement, the 
implementation of a legal option does not always lead to availability and use160. On 
the other hand, other different arrangements  for buying on behalf of other CAE have 
also been put in place, which are not necessa rily considered CPBs in the sense of the 
Directives161. 
Moreover, while most MS have establishe d CPBs, it is only the central government 
authorities' administrations which are oblig ed to use it. Other bodies may also be 
encouraged to use it but they are also permitted to establish other purchasing agreements. There is also a problem of insufficient coordination of centralised 
purchasing at the MS level. 
The risks of this situation are perhap s best summarised by the 2010 OECD policy 
roundtable on Collusion and Corruption in Public Procurement
162: "Public 
procurement frequently involves large, hi gh value, projects, which present attractive 
opportunities for collusion and corruption.  Regulatory require ments dictating 
particular procurement procedures can re nder the process excessively predictable, 
creating opportunities for collusion. [….] Finally the sheer quantity of goods and services that are contracted by the State creates monitoring diff iculties and increases 
the likelihood that the public procuremen t process may fall prey to collusion or 
corruption." 
8.3.5.2.  Different capabilities of CAEs  
The Commission estimates that there are 250,000 plus CAEs conducting public 
procurement, with extremely varied budgets  at their disposal and very different 
                                                
 
157 Finland, Portugal. 
158 Belgium, Germany, France, the Netherlands, Austria, Portugal, Spain, Finland. 
159 Belgium, Germany, Estonia, Luxembourg. 
160 Bulgaria, Greece, Cyprus, Latvia, Luxembourg, the Netherlands, Poland, Romania, Slovenia, Slovakia 
and Finland do not have a CPB established. Romania and Slovenia have however a CPB planned. 
161 BE, DE, EE, LU do not opted to transpose the CPB in their national legislation, however, more than 5% 
of the CN published indicate purchasing on behalf of others. 
162 See: Policy Roundtables, Collusion and corruption in public procurement, 2010, OECD paper 
http://www.oecd.org/dataoecd/35/16/46235399.pdf  
 
EN 135   EN levels of buying experience. These range fr om very large, centralised buyers to 
procurers for small towns or fire stations w ho rarely, if ever need to make purchases 
which fall under the EU rule s. Often procurers for th ese organisations are not 
professionals – they have limited training and experience and procurement is but one 
of several tasks they fulfil. Procuremen t rules are generally set out in guidance 
documents, and often practitioners will not kno w where the rules originate. They will 
not necessarily know ab out the EU or nationa l legislation but when they do, they are 
often driven to adopt risk averse pro cedures, which may lead to sub-optimal 
outcomes, out of fear of the consequences  of non-compliance. As mentioned earlier, 
the costs associated with pre-empting or addressing litigation are important elements 
in the calculation of cost efficiency of procurement. A recent survey, estimates that around 25% of the purchasers responding incurred some litigation costs when concluding contracts with values  above the EU thresholds.  
Confronted with the complex challenges implied by public procurement policy, some 
(generally smaller and newer) MS (e.g. Slovenia, Lithuania, Portugal) have 
established well resourced central procur ement organisations, able to provide 
training and advice to indi vidual CAEs. Other Member  States have dispersed 
responsibility for the organi sation of public procurement procedures across myriad 
CAEs who are often poorly resourced. This c ontext is ripe for administrative error, 
and inconstant application of  the principles and provisions of EU law. The limited of 
professional procurement training and advice in  many countries may have resulted in 
errors, an increased risk of fraud and a less than optimal management of resources, 
which would leave considerable scope for further cost efficiency savings. Recent 
audits of projects funded by community funds have found around 40% error rates 
due to the wrong application of public proc urement rules and in some instances, the 
incorrect transposition of the Directives into national legislation. According to the 
European Court of Auditors' annual report for the financial year 2009  
"The non-respect of public procuremen t rules alone accounts for 43% of all 
quantifiable errors and makes up for approximat ely three quarters of the estimated 
error rate [for the Structural Funds]". 
8.3.5.3.  Risks of errors in application 
Recent audits of public procurement projects financed at least in part by community 
funds e.g. European Regional Development Funds (ERDF), Cohesion Funds (CF) or 
Structural Funds (SF) have found significant error rates due to the wrong application 
of public procurement rules and in some instances, the incorrect transposition of EU Directives into national legislation. Such  errors account for around 40% of the audit 
findings for ERDF and CF projects (based  on DG REGIO audits in the programming 
periods 2000-2006 and 2007-2013) and makes up for approximately three quarters of 
the estimated error rate for the SF (2009 annual report of European Court of 
Auditors). As a result, over half the decisi ons enforcing financial corrections refer to 
public procurement. The budgets for these funds are significant: €347 billion has been allocated to regional and cohesion pol icy over 2007-13. This represents nearly 
36% of the total EU budget for that period and averages out at around €49 billion per 
year. Since all cohesion policy program mes are co-financed by the member 
countries, total available funding is nearer  €700 billion – much of which will be 
allocated via public procurement procedures. 
 
EN 136   EN In the context of structural funds , according to the applicable rules163 the MS 
receiving the funds have to set up a dedicated administrative structure for management, monitoring and controls. Ha ving a compliant admi nistrative structure 
in place is a pre-condition for receivi ng actual payments from the EU budget. The 
structure is composed of a managing authority  which is the body designated to 
manage the operational programme; a certifying authority , which has the 
responsibility to cert ify statements of expenditure and applications for payment 
before they are sent to  the Commission; and an audit authority  which is a body 
independent of the first two and is responsib le for verifying the effective functioning 
of the management and control system. Given that operating under these strict 
conditions, the error rate due to the misa pplication of public procurement rules was 
40%, it could be argued that the error rate would be even higher in the absence of 
such structures, as is frequently the cas e for the majority of public procurement 
contracts
164. For example a quick analysis of the contract award notices published in 
TED in 2009 showed that 21% of all noti ces did not include price information (an 
obligatory field) and hence were non co mpliant, while for EU funded projects only 
5% of notices were non-compliant from this point of view. Similar figures are 
observed for 2010 (22% of all contract aw ard notices were non compliant, while in 
case of EU funded projects the figure was 6%). 
Three major groups of weaknesses were  identified by the DG REGIO audits: 
• Inadequate assessment of bids; 
• Absence of tendering or award of cont ract based on inappropriate tendering 
procedure and award of supplementary contracts without competition; and 
• Non-compliance with publication requirements. 
An analysis of the infringement procedures launched by the Commission from 2005 
onwards165 also identifies the same range of issues and errors regarding 
implementation of procurement policy. Apart for the general provisions on infringements proceedings and the control of transpositions the Commission (DG MARKT) has no specific legal basis for other systematic controls of implementation (like DG REGIO has in relation to Struct ural Funds implementation or DG COMP 
has to undertake market investigations in relation to merger controls and antitrust 
policy).  
In conclusion, certain areas have been iden tified where it is clear that there are 
problems in the national application of pub lic procurement law and existing controls 
are not sufficient to address them. The evidence from Commission audits and analysis of infringements shows that th ese are not one-off incidents but occur 
repeatedly. Whilst it is not possible to estimate the error rates across the wider population of public procurement contracts, it  is extremely unlikely that the errors 
                                                
 
163 Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the 
European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing 
Regulation (EC) No 1260/1999 , OJ L 210 , 31/07/2006 p. 0025 – 0078. 
164 Unfortunately the different number and nature of a udit results make any useful statistical comparison of 
MS difficult. 
165 See: the Evaluation Report, pages 50-52. 
 
EN 137   EN and high error rates identif ied by the Commission's aud its are limited only to the 
application of cohesion policy projects. The analysis of infringements, which 
covered this wider population, showed similar problems. 
8.3.5.4.  Difference in monitoring arrangements 
Other aspects of the evaluation showed that  it is often difficult to assess whether 
particular public procurement or wider stra tegic goals are being achieved, since there 
is no systematic or consistent monito ring of these actions at national level. 
Monitoring at both national and EU level is important as it allows policy makers to 
track progress against objectives and eith er identify areas for further action in a 
timely manner, before a problem becomes seve re or to identify ar eas of good practice 
and success which could be shared with othe r interested parties. Although the current 
Directives require MS to provide certain information to the Commission annually, 
this information is limited in scope and does not cover all the relevant policy areas. The expected uptake of e-procurement,  which could systematically improve 
monitoring and audibility capaci ties due to the automatic registration of key data for 
all transactions has not yet occurred. Mon itoring arrangements differ widely from 
country to country.  
8.3.5.5.  Integrity of public procurement  
All stakeholder groups replying to the GP  recognise that procurement markets are 
exposed to risks of favouritism and co rruption. However, most stakeholders 
(excluding academic/legal experts) believe that the integrity of procurement should 
be addressed through national ra ther than EU legislation.  
At present the EU rules do not cover the issue of conflicts of interest
166. However, as 
pointed out by ECJ case law c onflict of interests constitutes objectively and by itself 
serious irregularities regardless of the parties involved and whether they were acting in good or bad faith
167. Again, CAE and MS considering that national legislation in 
this area is sufficient. A majority of busin ess, civil society and legal experts would 
support a common European de finition of "conflict of in terest" and the introduction 
of certain minimum safeguards.168 
MS and the general public (Eurobaromet er, 2011) recognise that the current EU 
public procurement directives have done much to addre ss and limit the occurrence of 
collusion and corruption. However, this is  no reason to be complacent – there is 
significant room to improve the current syst ems put in place to monitor application, 
enforce the rules and control for errors  when conducting public procurement.  
Several overall estimates, as well as speci fic studies covering certain corruption in 
certain MS or certain sectors are available; however, the exact cost of corruption in public procurement cannot be easily cal culated or extrapolated across EU. 
                                                
 
166 The notion of conflict of interest is the situation where persons involved in the contract award decision 
have competing professional or personal obligations  or personal or financial interests which would 
make it difficult for them to fulfil their duties fairly an d impartially, or where a person is in a position to 
influence the decision making of the contracting authority, in order to fulfil its own interest. 
167 See: judgement of 16.6.1999 , Case T-277:97Ismeri Europa Srl v Courts of Auditors. 
168 Responses to questions 98-103 of the GP. 
 
EN 138   EN In a recent impact assessment carried out by DG HOME for the EU anticorruption 
package estimated that although globally the cost of corrup tion is estimated at 5% of 
GDP: "[…] it has been estimated  that the costs of corrup tion in the EU amount to 
around 1% of EU GDP ". 
It is clear that only a small percentage can be attributed to public procurement, 
however, the same impact assessmen t stated that in Bulgaria: " It is thus estimated 
that the cost of organised public procurem ent corruption in term s of fiscal and public 
welfare loss ranges between 25 – 30% of the public procurement market. This suggests 0.7 billion euro losses due to public procurement misappropriations in 
2007–2008 ".  
Addressing these errors and th e risk of fraud is important  – the evaluation has shown 
that following the rules and principles set out by the EU Directives translates into 
savings for the procurer – which will be foregone under the practices identified above. Not only does public procurement b ecome more expensive and inefficient, 
resulting in an immediate co st to society, but  there may be othe r missed opportunities 
as the possibility to address other strategi c issues and progress towards wider societal 
goals is also ne gatively affected. 
8.3.5.6.  Conclusions 
Significant differences in the administrative organisation put in pl ace by MS have led 
to inconsistent application, control and monitoring across the EU. This has resulted 
in errors, an increased risk of fraud and a less than optimal management of resources.  
8.4. ANNEX 4 – Summary table linking  objectives with problems 
The table presented overleaf shows the mapping between the problems and 
objectives identified for this impact assessm ent. In particular, it shows that the 
problem of missed opportunities can be linke d to the drivers fo r all five problem 
areas, whilst the insufficient cost efficien cy is related to the problem drivers for 
governance, scope and procedures (cells in table bordered by a dotted line). The 
national markets are being caused by driv ers linked to the ar eas of governance, 
strategic and access (cells shaded in grey). 
 
EN 139   EN General problem/result:  The internal market is not achieving its full potential for public procurement 
General objectives: 
– Promote EU-wide competition for contracts (i.e. fair, non-discrim inatory and level playing field for all suppliers, ensuring EU  markets accessible to all EU firms) 
– Deliver best value for money whilst achieving the best possible procurement outcomes for society (and hence, ultimately, making  best use of tax payers' money) 
– Aid the fight against corruption  
Problems : Specific obj ective Operational objectives Problem drivers 
a) ensure rules capture the appropriate actors and 
subject-matter of procurement 
b) provide clarity and legal certainty with respect to said 
scope and coverage Scope: 
Complex rules defining scope 
and coverage 
a) streamline and simplify proc urement procedures to (i) 
reduce operational costs (ii) ensure proportionality and (iii) provide for more legal certainty 
b) improve the flexibility of procedures to better 
respond to purchasing needs of authorities Procedures: 
Disproportionate and inflexible procedures  
Problem  = Sub-optimal cost efficiency of 
public procurement leading to best value 
for money not being achieved 
Specific objective  = Improve the cost-
efficiency of EU public procurement rules 
and procedures 
a) ensure consistent application, controls and monitoring 
of public procurement policy and outcomes across MS 
b) reduce errors and proble ms in complying with EU 
public procurement rules  Governance: 
Different administrative models 
and capacities across EU 
a) help public procurers to use public procurement to 
support other policy objectives in a legally compliant 
and fair manner Strategic: 
Uncertainty & insufficient 
provisions w.r.t. integration of 
strategic goals  Problem  = Missed opportunities for 
society 
 
Specific objective  =Take full advantage 
of all opportunities to deliver the best 
possible outcomes for society  
 Problem = National rather than EU 
public procurement markets 
Specific objective  = Create European 
rather than national markets for 
procurement a) simplify the rules and introduce instruments to 
increase the transparency of  EU public procurement, 
opening up markets to more cross-border competition 
b) ensure that the rules promote and support SME 
participation Access: 
Market access barriers: natural 
and regulatory  
 
EN 140   EN 8.5. ANNEX 5 – Long list of proposals considered before defining Options169 
Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Introduction of additional 
measures to foster SME participation in public procurement through increased use of lots unders certain circumstances 3 Hi Opinions divided Market access barriers;  
Disproportionate procedures ACC.LEGI.FACILIT 
Alleviation of administrative 
burdens through self-declarations with regard to evidence for exclusion and selection criteria; winning bidder then provides evidence 4 Hi Everybody in 
favour Disproportionate 
procedures; Inflexible procedures; Market access barriers ACC.LEGI.FACILIT 
                                                 
169 During the drafting of proposals and intern al consultation processes, several of the actions originally identified in this tab le were discarded. Where these actions fall within 
the options which form the preferred solution presented under this IA, they are highlighted in italics.  
170 1 = low market size and low transaction impact; 5 = high market size and high transaction impact. 
 
EN 141   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Revise standard forms to 
reduce information requirements on CAEs 5 Hi General support Disproportionate 
procedures; Market access barriers;  Inflexible procedures ACC.LEGI.FACILIT 
(Optional) instruments to 
encourage pro-competitive procurement strategies  2 Med Mixed opinions, 
business slightly 
in favour, CAEs 
slightly against Inflexible procedures; 
Uncertainty and insufficient provisions w.r.t. integration of strategic goals; Legal uncertainty ACC.LEGI.FACILIT 
(discarded) 
Improve mutual recognition of certificates, e.g. through greater use of e-Certis 3 Hi Support Disproportionate 
procedures; Market access barriers;  Lack of clarity; Legal uncertainty ACC.LEGI.FACILIT 
 
EN 142   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Measures to foster the 
innovation capacity of SMEs  2 Med Some support, 
but solutions 
proposed often 
outside public 
procurement 
legislation (e.g. 
financial support 
through 
subsidies) Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals ACC.LEGI.FACILIT 
Legislative rules limiting 
excessively strict turnover requirements for proving financial capacity (to facilitate SMEs access) 2 Med Vast majority 
agrees that 
excessively strict 
turnover 
requirements are 
a problem for 
SMEs. Less 
unanimous 
reaction to EU 
level turnover 
cap. Disproportionate 
procedures;   Inflexible procedures;   Market access barriers ACC.LEGI.FACILIT  
 
EN 143   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Introduction of a European 
public procurement passport 4 Hi Generally 
positive Market access barriers  ACC.LEGI.FACILIT 
List of possible requirements 
for selection of candidates made exhaustive  3 Med Neutral Market access barriers  ACC.LEGI.FACILIT 
Introduction of additional 
measures to foster SME participation in public procurement through use of quotas 3 Hi (Question of 
quotas not 
explicitly asked 
in Green Paper 
because of doubts 
if legally 
possible) Market access barriers;  
Disproportionate 
procedures ACC.LEGI.ENFORC 
Impose mandatory use of lots 
for all contracts  5 Med Generally against Market access barriers ACC.LEGI.ENFORC 
 
EN 144   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Obligation to subcontract a 
certain share of the main contract to third parties 3 Med Mixed opinions Inflexible procedures; 
market access barriers;  ACC.LEGI.ENFORC 
Obligation to draw up tender 
specifications for high-value contracts in a second language 2 Lo Strong opposition 
from stakeholders Market access barriers ACC.LEGI.ENFORC 
Instruments to prevent the 
development of dominant suppliers (e.g. obligation to annul the procedure if only one or two valid bids received) 2 Med (Green Paper 
replies not 
conclusive) Market access barriers  ACC.LEGI.ENFORC 
EU definition of conflict of 
interest in public procurement  2 Med Mixed opinions Complex rules defining 
scope and coverage; Different models across Member States GOV.LEGI.TARGET 
 
EN 145   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
New organisation of CPBs 4 Hi Neutral; 
tempered by concerns for 
SMES Different models leading to 
different public procurement capabilities being developed across Member States; Disproportionate procedures GOV.LEGI.TARGET 
Safeguards to prevent, 
identify and resolve conflict-of-interest situations 2 Med Support notably 
from business 
and Civil Society 
for minimum 
standards at EU 
level, contracting 
authorities and 
MS more 
sceptical Complex rules defining 
scope and coverage GOV.LEGI.TARGET 
Require Member States to 
improve knowledge sharing tools, assistance to CAEs and business, notably in cross-border context (use of IMI) 3 Hi Stakeholders 
strongly in favour 
of 
professionalizing 
public 
procurement Different models leading to 
different public procurement capabilities being developed across Member States; Disproportionate procedures GOV.LEGI.TARGET 
 
EN 146   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Additional instruments to 
tackle organised crime in public procurement 2 Med No support for 
very dense and 
coercive rules 
w.r.t anti-
corruption 
safeguards, most 
stakeholders 
think this should 
be left to MS 
legislation Lack of consistent 
application, controls and monitoring of public procurement outcomes across Member States GOV.LEGI.ENHANC 
Designation of national bodies 
to control, monitor and supervise public procurement practice in Member States (with the tasks of monitoring structural problems + liaise with the Commission on this point + deal with problems in individual procedures/ complaints where necessary + annual implementation report) 5 Hi No specific 
question asked in 
the GP, but in 
general strong 
overall support 
for 
professionalizing 
public 
procurement.  Different models leading to 
different public procurement capabilities being developed across Member States;  GOV.LEGI.ENHANC 
 
EN 147   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Introduction of criminal 
sanctions for certain violations of public procurement rules 2 Med Stakeholders 
against Different models leading to 
different public procurement capabilities being developed across Member States;  GOV.LEGI.ENHAN 
(discarded) 
Modify procedures by shortening time-limits 4 Med Broad support 
from CAEs; 
business sceptical Disproportionate 
procedures; Inflexible procedures PRO.LEGI.DESIGN 
Modify procedures to alleviate 
publication requirements (DPS, PIN) 3 Hi  Some support  Disproportionate 
procedures; Inflexible procedures PRO.LEGI.DESIGN 
More flexible approach to the 
organisation and sequence of the examination of selection and award criteria, including allowing experience of staff to be taken into account in the award phase 3 Med Quite broad 
support Inflexible procedures PRO.LEGI.DESIGN 
 
EN 148   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Allowing negative previous 
experience with one or several bidders to be taken into account. 3 Med Broad support Inflexible procedures PRO.LEGI.DESIGN 
New rules to improve 
functioning of repetitive purchasing and aggregation techniques and structures (framework agreements, DPS, CPBs)  3 Hi Some support, 
tempered by concerns for 
SMES Disproportionate 
procedures; Inflexible procedures; Market access barriers PRO.LEGI.DESIGN 
Regulating the issue of 
substantial modifications of a contract while it is still in force 3 Med Support for 
codification of 
case-law  Lack of clarity PRO.LEGI.DESIGN 
 
EN 149   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Introduce a rule that 
contracting authorities must have the possibility to terminate a contract e.g. after a ECJ judgement in an infringement case 2 Med Slight majority in 
favour  Lack of clarity; Legal 
uncertainty PRO.LEGI.DESIGN 
Stronger safeguards against 
anti-competitive behaviours in tender procedures, e.g. obligation to exclude bidders because of attempt of bid-rigging in the procedure in question 2 Med Mixed opinions Lack of clarity; Legal 
uncertainty; Market access barriers PRO.LEGI.DESIGN 
Rules concerning attribution 
of exclusive rights 2 Lo Replies to GP not 
entirely 
conclusive, but 
for majority the 
attribution of 
exclusive rights 
can jeopardize 
fair competition Market access barriers  PRO.LEGI.DESIGN 
(discarded) 
 
EN 150   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Rules concerning the 
attribution of contracts on the basis of exclusive rights 2 Lo Support from 
stakeholders Market access barriers  PRO.LEGI.DESIGN 
Safeguards to tackle 
advantages of certain bidders because of their prior association with  the design of 
the project 2 Med Mixed opinions Disproportionate 
procedures; Inflexible procedures; Uncertainty and insufficient provisions w.r.t. integration of strategic goals PRO.LEGI.DESIGN 
Mandatory e-transmission of 
notices  3 Med Already used at 
93% - general 
acceptance Disproportionate 
procedures PRO.LEGI.DESIGN 
Full electronic availability of 
tender documents from the moment of publication of notice  3 Med General 
acceptance  Disproportionate 
procedures PRO.LEGI.DESIGN 
 
EN 151   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Allow Member States to go 
further in imposing e-communication (clarify Member States ability to impose mandatory use) 4 Hi General support Disproportionate 
procedures;  Lack of certainty;  Lack of clarity PRO.LEGI.DESIGN 
Clarify appropriate 
authentication and identification solutions – ensuring minimum standards and accessibility - for e-procurement  3 Hi General support Disproportionate 
procedures; Lack of certainty;  Lack of convergence PRO.LEGI.DESIGN  
Fully electronic 
communication imposed for all (above threshold) procurement  5 Hi Slight majority in 
favour, but with 
caveats w.r.t. 
readiness and 
need to address 
existing 
challenge Disproportionate 
procedures PRO.LEGI.FLEXIB 
Generalise negotiated 
procedure  3 Hi Broad support Inflexible procedures PRO.LEGI.FLEXIB 
 
EN 152   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Specific rules for procurement 
by sub-central authorities (publication facilities: PIN) 4 Hi Some support Complex rules defining 
scope and coverage; Disproportionate procedures;  PRO.LEGI.FLEXIB 
Elimination of the lowest 
price only criterion 4 Lo Support from 
NGOs; CAs and 
MS strongly 
against Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals; Market access barriers PRO.LEGI.FLEXIB 
(discarded) 
Elimination of the lowest price only criterion for certain services 3 Lo Some support 
from NGOs with 
regard to social 
services, other 
stakeholders 
rather sceptical Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals;  Market access barriers PRO.LEGI.FLEXIB 
(discarded) 
 
EN 153   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Allow MS to eliminate the 
lowest price only criterion for social services  3 Lo Questions not 
explicitly asked 
in the GP (see: 
above) Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals;  Market access barriers PRO.LEGI.FLEXIB 
Fully electronic 
communication imposed on CPBs  3 Hi Not discussed Disproportionate 
procedures PRO.LEGI.FLEXIB 
Modifications to the 
distinction between A and B services. 4 Med (Some in favour, 
but diverging on 
what exactly they 
want) Complex rules defining 
scope and coverage SCO.LEGI.TARGET 
 
EN 154   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Modifications to certain 
exclusions (update, clarify). 3 Lo Majority in 
favour of keeping 
main concepts; 
some support for 
clarification 
according to 
case-law Complex rules defining 
scope and coverage SCO.LEGI.TARGET 
Clarifications to definitions of 
certain procurers 4 Lo Majority in 
favour of keeping 
main concepts; 
some support for 
clarification 
according to 
case-law Complex rules defining 
scope and coverage SCO.LEGI.TARGET 
Legislative rules at EU level 
regarding the scope and criteria for exemption of public-public cooperation. 2 Med Support for 
codifying case-
law Lack of clarity;  
Complex rules defining scope and coverage  SCO.LEGI.TARGET 
 
EN 155   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Regulate other aspects of 
contract execution (e.g. issues of guarantees, liability, ..) 3 Med No support from 
stakeholders – 
should be left to 
national contract 
law Lack of clarity;  
Complex rules defining scope and coverage; Inflexible procedures SCO.LEGI.TARGET 
(discarded) 
Specific features of social services taken more fully into account in EU public procurement legislation  4 Hi Support from 
CAEs, civil 
Society and 
social service 
providers in 
favour of taking 
into account 
specificities; 
business rather 
against
171.  Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals  Disproportionate procedures;  Complex rules defining scope and coverage SCO.LEGI.TARGET 
                                                 
171 General line of those stakeholders in favour of special regime: they claim 1. more flexibility + 2. possibility for CAEs to gi ve stronger focus on quality criteria (enabling 
approach) 
 
EN 156   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Specific features of social 
services taken more fully into account in EU public procurement legislation  - higher threshold  4 Hi Question of new 
threshold for 
social services 
not discussed in 
the GP Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals Disproportionate procedures; Complex rules defining scope and coverage SCO.LEGI.TARGET 
Specific features of social 
services taken more fully into account in EU public procurement legislation - very flexible procedures, leaving MS to define the procedures they think are useful, in full respect of principles of transparency and non-discrimination  4 Hi Support from 
those 
stakeholders that 
are in favour of a 
specific regime 
for social 
services, see 
comment in 
general social 
services line  Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals Disproportionate procedures;  Complex rules defining scope and coverage SCO.LEGI.TARGET 
 
EN 157   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Clarification of the 
exemptions for intra-group and joint-venture procurement 2 Med Opinions divided Complex rules defining 
scope and coverage; 
 
Lack of clarity SCO.LEGI.TARGET 
Clarification and 
simplification of the procedure for examining requests for exemption for contracts awarded in sufficiently competitive markets (the current "Art. 30 Decisions")  2 Med General support Complex rules defining 
scope and coverage;  
Lack of clarity SCO.LEGI.TARGET 
 
EN 158   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Targeted exclusion of 
procurement made for the purpose of exploring for oil and gas 3 Med Generally 
supported Complex rules defining 
scope and coverage SCO.LEGI.TARGET 
Specific features of social 
services taken more fully into account in EU public procurement legislation - ensure that CAEs can choose the service provider on the basis of quality criteria  4 Hi Support from 
those 
stakeholders that 
are in favour of a 
specific regime 
for social 
services, see 
comment in 
general social 
services line  Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals Disproportionate procedures;  Complex rules defining scope and coverage SCO.LEGI.TARGET 
 
EN 159   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Specific features of social 
services taken more fully into account in EU public procurement legislation - impose on CA the taking into account of quality criteria  4 Hi Question not 
asked in that 
detail in the 
Green Paper, but 
in general, strong 
opposition from 
CAEs and MS as 
regards 
mandatory EU 
obligations with 
regard to societal 
issues Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals; Disproportionate procedures;  Complex rules defining scope and coverage SCO.LEGI.TARGET 
(discarded) 
Obligation for MS to allow cross-border joint procurement and develop a conflict of laws rule to determine the applicable law and jurisdiction 2 Med Broad support Inflexible procedures;  
Market access barriers;  Uncertainty & insufficient provisions w.r.t. integration of strategic goals SCO.LEGI.TARGET  
Radically modify the structure 
of the Directives by abandoning division into works /goods / services 5 Med Mostly against Complex rules defining 
scope and coverage SCO.LEGI.REDUCE 
 
EN 160   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Radically modify the material 
scope of the Directives by excluding sub-central authorities  4 Med Mostly against Complex rules defining 
scope and coverage SCO.LEGI.REDUCE 
Radically modify the material 
scope of the Directives by exclusion of B services. 4 Med (Mostly against) Complex rules defining 
scope and coverage SCO.LEGI.REDUCE 
Raise the thresholds 5 Med Some strongly in 
favour (notably 
CAEs), others 
against (majority 
of business). MS 
divided. Complex rules defining 
scope and coverage SCO.LEGI.REDUCE 
Include the utilities in the 
Classic Directive 4 Med No support  Complex rules defining 
scope and coverage;  Disproportionate procedures;  SCO.LEGI.REDUCE 
 
EN 161   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Exclude the utilities from 
procurement rules altogether 4 Lo No support  Complex rules defining 
scope and coverage;   Disproportionate procedures;  SCO.LEGI.REDUCE 
Extending scope to below 
thresholds procurement 4 Med No support Complex rules defining 
scope and coverage;  Disproportionate procedures;  SCO.LEGI.REDUCE 
Clarify the concept of LCC 
and explicitly allow the use  4 Hi Favourable 
opinion on 
concept of LCC 
from a lot of 
stakeholders; 
opinions split as 
to how far this 
should be 
mandatory Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.FACILIT 
Allow obligations on "what to 
buy" to be imposed at national level  3 Med Opposition from 
CAEs and 
business Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.FACILIT 
(discarded) 
 
EN 162   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Incentives/measures to further 
promote and stimulate innovation through public procurement - Promote increased use of performance related technical specifications  3 Med Stakeholders 
sceptical Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals; Inflexible procedures STR.LEGI.FACILIT 
Incentives/measures to further 
promote and stimulate innovation through public procurement - Promote increased use of variants  2 Med Question not 
explicitly asked 
in Green Paper - 
no statistics 
available Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.FACILIT 
 
EN 163   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
New procedure to 
support/foster use of innovation (Innovation partnership) 4 Med Probably quite 
broad support 
(Question not 
asked, but 
stakeholders have 
identified a need 
for improving 
innovation-
friendliness, 
support for the 
elements 
resembled in the 
new procedure 
can be deducted 
from replies to 
the GP Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals;  Inflexible procedures STR.LEGI.FACILIT 
Improve functioning of 
competitive dialogue notably through better protection of creative solutions  3 Med Strong support 
from business Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals; Inflexible procedures STR.LEGI.FACILIT 
 
EN 164   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Possibility for contracting 
authorities to explicitly require certain labels (certification schemes), but safeguard that equivalent labels must also be accepted 2 Med Question not 
explicitly asked 
in Green Paper - 
no statistics 
available Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.FACILIT 
Violation of obligations from 
EU environmental or social law or from certain international labour law provisions = ground for exclusion of bidders 2 Med Question not 
explicitly asked 
in Green Paper - 
no statistics 
available (some 
support)  Uncertainty and 
insufficient provisions w.r.t. integration of strategic goals 
STR.LEGI.FACILIT 
Tenders which are abnormally 
low because of non-compliance with obligations from EU environmental or social law, including throughout the supply chain, must be rejected 2 Med Question not 
explicitly asked 
in Green Paper - 
no statistics 
available (some 
support) Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.FACILIT 
 
EN 165   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Allow inclusion of factors 
directly linked to production processes in award criteria 
and technical specifications 3 Med Stakeholders 
opinions mixed Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.FACILIT 
Require CAEs to use certain 
defined award criteria and / or technical specifications 3 Med Opposition 
notably from 
businesses and 
MS Different Member States 
models; Uncertainty and insufficient provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
Permitting restriction to local 
or regional suppliers  
- in specific cases 3 Lo Support from 
CAEs, opposition 
from business Different Member States 
models; Uncertainty and 
insufficient provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
 
EN 166   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Mandatory use of life-cycle 
costing when determining the economically most advantageous offer 4 Med Favourable 
opinion on 
concept of LCC 
from a lot of 
stakeholders; 
opinions split as 
to how far this 
should be 
mandatory Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
Dropping the condition that 
requirements imposed by the contracting authority must be linked to the subject matter of the contract 4 Lo Strong opposition 
notably from 
businesses and 
MS Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
EU level quotas in public 
procurement legislation to impose consideration of green, social etc. factors 4 Lo Strong opposition 
from all 
stakeholder 
groups except 
NGOs. Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
 
EN 167   EN Action Economic 
magnitude170 Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) Stakeholder 
views   Link to problem driver(s) Op tion action assigned to 
Obligations on "what to buy" 
at EU level enshrined in policy specific legislation (environmental, energy-related, social, accessibility, etc)  4 Lo Stakeholders 
opinions mixed. Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
Incentives/measures to further 
promote and stimulate innovation through public procurement - Obligatory use of performance related technical specifications  3 Lo Stakeholders 
sceptical Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals; Inflexible procedures STR.LEGI.ENFORC 
Incentives/measures to further 
promote and stimulate innovation through public procurement - Obligatory use of variants  2 Lo Question not 
explicitly asked 
in the GP - no 
statistics 
available Uncertainty and insufficient 
provisions w.r.t. integration of strategic goals STR.LEGI.ENFORC 
 
 
EN 168   EN 8.6. ANNEX 6 – Detailed description of Headline actions 
Table 25): Detailed description of Headlin e Actions under each legislative option 
Option Headline Action Description of the headline action 
SCO.LEGI.TARGET Higher threshold for social 
services , with a special regime for social services above this threshold There would be no change in basic 
thresholds, but higher threshold for social services , with a special regime for social services above this threshold. Above this threshold, 
special light regime, with an obligation of ex-ant e publication of a 
notice would be introduced as compensation for the higher thresholds. CAEs would be allowed to choose the service provider on the basis of considera tions linked to the 
specificities of so cial services, in 
particular to the quality of the service. 
SCO.LEGI.TARGET Inclusion of all former B-
services (except for social services) in the regular regime  All former B-services (except for 
social services for which the directive provides a special regime, see below under strategic) would be covered by the regular regime. In practice, this would mean the abolition of B-regime as such (and a replacement of a complicated two-tier structure by a simpler one i.e. based on a special regime for social services- see: above). 
SCO.LEGI.REDUCE Raise the thresholds All currently applicable thresholds 
would be raised; Three possible scenarios would be analysed – a raise by 20%, by 50% and doubling the thresholds. 
PRO.LEGI.DESIGN Improve tools for repetitive 
purchasing (DPS, framework agreements, e-Catalogues). The functioning of DPS would be 
considerably improved and simplified e.g. the need for individual notice and indicative tenders before each individual procurement under the system would be abolished. Conditions for use of framework agreements would be clarified, notably the use of FRA by contracting authorities which are not party to the agreement. 
 
EN 169   EN Option Headline Action Description of the headline action 
Coherent rules for the use of e-
catalogues would be provided. The commission would be empowered to 
issue interoperability standards through comitology.  
PRO.LEGI.DESIGN Increa se use of electronic 
communications tools (e-procurement)  The use of e-procurement tools would 
be promoted, for example thought: mandatory transmission of notices in electronic form, mandatory electronic availability of tender documents, CPBs would be bound to use fully electronic communication tools. CAEs would have to have  access to DPS. 
MS would be allowed to make mandatory electronic communication where it is not yet mandatory by virtue of the Directive.  
PRO.LEGI.FLEXIB Greater freedom for CAEs 
to use negotiated procedure The use of the negotiated procedure 
with prior publication would be available for all contracts with certain safeguards (notably: documentation obligations, etc.)  
PRO.LEGI.FLEXIB New lighter publication 
regime for sub-central authorities Sub-central contracting authorities 
would enjoy new lighter publication regime, by taking the advantage of leeway allowed by the GPA. For example, they would enjoy the possibility to use the prior information notice as a means of calling for competition and the possibility to set certain time limits in mutual agreement with candidates. 
STR.LEGI.FACILIT Allow consideration of 
entire life-cycle costs in 
award criteria Consideration of entire life-cycle costs 
would be allowed in  award criteria, 
both in the context of the EMAT and in the second criterion. "Price only" criterion would become "cost", which can be, at the choice of a CAE, price only as currently, or overall costs including life-cycle cost. Life-cycle costing could explicitly include transport costs and externalities linked to transport such as CO2 emissions (where they could be monetised). The 
 
EN 170   EN Option Headline Action Description of the headline action 
use of common EU methodology 
would be mandatory whenever established. 
STR.LEGI.FACILIT Allow inclusion of factors 
directly linked to production processes in award criteria and technical specifications  Factors directly linked relating to 
production processes would be allowed in award criteria and technical specifications. This would include socially disadvantaged people involved in the production process to support the Social Business Initiative. However, such approach would exclude requirements too far away from the production process, such as requirement for the economic operator to build schools for the children of workers in the country of origin of the supplies (Fair Trade Premium) or general Corporate Social Responsibility. 
STR.LEGI.FACILIT Introduce the "Innovation 
partnership” (a new, special procedure for purchases not yet available on the market) Special procedure for purchases which 
are not yet available on the market: competitive procedure to choose the developer, who would develop the product in cooperation with the contracting authority. To have an incentive to invest  the supplier would 
also be allowed to directly supply the product/service, if the contracting authority is satisfied with the product/service developed  
STR.LEGI.ENFORC Introduce obligations on 
"what to buy" (quotas) Quotas setting criteria for a percentage 
of contracts awarded in selected categories of purchases would be defined in the Directives (e.g. 20% of procured electricity would have to come from renewable sources).  
STR.LEGI.ENFORC Require CAEs to use 
certain defined award criteria CAEs would be obliged to evaluate 
offers according to certain criteria defined by the EU. For example, they might have to use the life cycle cost methodology defined in the Directive, thereby, allowing factors relating to energy consumption to influence the final award.  
 
EN 171   EN Option Headline Action Description of the headline action 
ACC.LEGI.FACILIT Mandatory acceptance of 
self-declarations as prima-facie evidence for selection CAEs would be oblig ed to accept self-
declarations as preliminary evidence submitted by bidders. Only once a successful bidder is selected, the CAE would require the winner to submit original documenta tion and / or to 
clarify the certificates and documents which were presented in the offer. 
ACC.LEGI.FACILIT Introduction of a European 
Procurement passport EU public procurement passport could 
become a tool for further simplification of the procedures. EU public procurement passport would take the form of a standard document validated at the MS level, confirming that a bidder is compliant with certain frequently requested criteria e.g. certification that the firm has not been the subject of a conviction by final judgment or is subj ect of insolvency 
or winding-up proceedings, that the firm pays social and fiscal tax, etc. The Passport would have a limited validity of for example several months. 
ACC.LEGI.ENFORC Impose mandatory use of 
lots for all above threshold contracts All contacts above the EU thresholds 
would have to be split into lots in order to facilitate the access of SMEs to public procurement markets. The proposed model would not foresee any possibility to waive such obligation, even if such compulsory subdivision into lots was technically difficult, expensive or for other economic reasons.  
ACC.LEGI.ENFORC Introduce quotas for share 
of procurement contracts / budget awarded to SMEs Fixed quotas with regards to contracts 
awarded to SMEs would be defined in the Directives.  
GOV.LEGI.TARGET Establish clear rules for 
purchases made through CPBs Clear rules for purchases through 
Central purchasing bodies, including "safe haven" concept. Introduction of provisions that would permit small contracting authorities to transfer responsibility for procurement to CPBs. 
 
EN 172   EN Option Headline Action Description of the headline action 
GOV.LEGI.ENHANC Obligatory designation of 
central national oversight body by Member States, with clear obligations on monitoring, enforcement and reporting New provisions that would aim at 
stronger ownership of MS in enforcement of EU public procurement rules, notably through obligation to identify appropriate structures. Also a direct answer to the IAS Audit Report asking for more ownership by MS in the application of EU procurement law. This national oversight body would have obligations on monitoring, enforcement and reporting. The annual reports of the oversight body could for example include reporting on SME success in public tenders. Th e oversight body 
could also be responsible for ensuring 
better assistance to CAEs and 
businesses in order to improve professionalisation of procurement, better knowledge sharing / knowledge management (e.g. via "knowledge centres"), although this role could also be fulfilled by a different body. Administrative cooperation between MS could be improved through the use of IMI for information exchange. 
8.7. ANNEX 7 – Detailed analysis of impa cts of selected Headline actions 
8.7.1.  SCO.LEGI.TARGET - New regime for all serv ices and a lighter treatment for social 
services 
Currently, the Directives make a distinc tion between so called A-type and B-type 
services. While A-type services are subject to the full procedures of the Directives, 
contract awards for B-type services have  only to comply with the provisions on 
technical specifications  and on the transmission of a notic e of the results of the award 
procedure172. B-type services are also subject to the basic principles of EU law, such 
as non-discrimination and transparency173. The two tier structure was established as a 
compromise that was meant to mirror cross-bo rder interest of certain sectors (A-type 
categories) and lack of such interest of othe r sectors (basically, a ll B-type services).  
Service contracts tend to represent ar ound 38% of the total volume of public 
procurement published in OJ/TED (i.e. in  2009 around € 160 billion). This total is 
                                                 
172 Which they may / may not permit to be published. 
173 As different from contracts below the thresholds, which are only subject to the basic principles of EU 
law - such as non-discrimination and transparen cy - if they present a cross-border interest. 
 
EN 173   EN split into A-type and B-type services (74%  and 26% respectively in value terms and 
70%/30% in terms of th e number of CANs). 
The abolition of the current A/B distinctio n in service (a two-tier structure) could 
basically mean that one of f our approaches is chosen:  
(i) the distinction into A- or B- type se rvices is abolished and all services are 
subject to the “full” regime (i.e. a ll services would become A-type ),  
(ii) the distinction into A- or B- type services is abolished and all services are 
subject to the “light” regime enjoye d currently by B-type services,  
(iii) service contracts would be enti rely excluded from the Directives. 
Ad.(i): The first proposal, where all services  would be subject to the "full" regime 
(using the current terminology, all services would become A-type services), would 
expand the scope of the “f ull” regime by around €41 b illion. This move could 
however pose significant difficulties, as part of  the current B-type services have little 
or even no cross-frontier interest, th erefore expanding full provisions of the 
Directives to those selected services c ould be perceived as too burdensome and not 
adapted to services that are not tradable (e.g. so-called "services to the person").  
Ad. (ii): Bringing all services to B-type status would be detrimental to those A-type 
services that are successful in cross-borde r procurement. Recent research shows that 
many of A-type services are relatively su ccessful in cross-border procurement (e.g. 
Category 11:Managemen consulting services and related services with 10.4% direct 
cross-border ratio in volume terms in 2007-2009). 
Ad. (iii): The impact of the fourth a pproach aimed at abolishing the two–tier 
structure by the exclusion of all service c ontracts from the scope of the Directives 
would mean downsizing EU public procur ement market by roughly €160 billion each 
year. Although a theoretical  possibility, this meas ure should be ruled out 
immediately, as it cannot be regarded as a serious alternative - it is not supported by 
the stakeholders, would trigge r important losses in tran sparency and undermine EU's 
credibility on the in ternational level (inc luding potential penalties under the GPA). 
Finally, the third proposal is not sustainable given the findi ngs of the evaluation (i.e. 
that the benefits of the Directives outwei gh its costs). As a consequence, the above 
measure will not be considered further. 
A compromise solution between the two rema ining possibilities ((i) and (ii)) would 
be to move only some types of services to  the full regime (i.e. modify the allocation 
of services to A-type/ B-type list) and po ssibly – improve the design of these rules.  
As mentioned above, one of the "natural " candidates for a sp ecial and lighter 
treatment with respect to pp rules should be the "services to the person" or "social 
services". This is due to the fact that these services are characterised by very low 
tradability and generally the absence of cros s-border interest. For example, the value 
of direct cross-border awards as a proporti on of all awards in Category 25 ("Health 
and social services") was close to 0% . There was only one category under B-type 
services that showed lower percentage  (22: Personnel placement and supply 
services), but the volume of transactions in Category 22 in absolute terms was much 
 
EN 174   EN less important174 than Category 25, as the latter constituted around 1/3 of value of all 
B-type contracts awarded in 2007-2009. 
Table 26): Cross-border procurement – A and B servi ces on the basis of cont ract value (2007-2009) 
Service Category Direct 
cross-border Indirect 
cross-border through affiliates
A-type services 2.8% 16.2% 
B-type services  1.2%  12.1%  
within B-type: 
25: Health and social services 0.1% 0.6% 
Total  2.4% 14.6% 
Source: Rambøll study 
As mentioned before, currently, social se rvices are listed in Annexes B of the 
Directives therefore, when outsourcing soci al services via a publ ic service contract, 
public authorities already enjoy considerable la titude with regard to  the procedures to 
be followed. Nevertheless, some stakeholde rs claim that adaptations of the current 
rules are needed in order to take better acc ount of the specificities of social services. 
There are in particular calls for higher th resholds for such services or a global 
exclusion of these services from  the scope of the Directives. 
According to estimations based on notices published in OJ/TED social services 
accounted for roughly € 18 billion in 2009175 (see: Table 27). 
Table 27): Social services – the estimated value of public procurement published in OJ/TED in 2009 in € 
million and % 
Service 
category CPV codes Value [€ 
million] % of the 
total 
volume 
Category 24: Education and vocational education From 80100000-5 to 80660000-8 
(except 80533000-9, 80533100-0, 
80533200-1)2,293.32 0.5%
                                                 
174 Contracts value in Category 22: Personnel placement and supply services was around 1/10 of Category 
25: Health and social services. 
175 This figure was calculated on the basis of the noti ces published under following CPV codes: in category 
24 Education and vocational education services (CPV codes from 80100000-5 to 80660000-8, except 
80533000-9, 80533100-0, 80533200-1) and in category 25 Health and social services (CPV codes 
79611000-0, and from 85000000-9 to 85323000-9, except 85321000-5 and 85322000-2). 
 
EN 175   EN Service 
category CPV codes Value [€ 
million] % of the 
total 
volume 
services 
Category 25: Health and social services 79611000-0, and from 85000000-
9 to 85323000-9 (except 
85321000-5 and 85322000-2)16,422.95 3.9%
 TOTAL 18,716.26 4.5%
Source: DG MARKT estimates based on OJ/TED data 
While analysing the volume of transaction related to social services, it is equally 
important to notice that of  the 6.11 % of GDP spent by governments on health social 
security and education176, only a marginal amount has b een published in the OJ/TED. 
The comparison of public expenditure by f unctions of government with contracts 
advertised reveals that around 94% of expendi ture in the health or social services 
sector is not spent through contracts advertised in OJ/TED. A similar issue arises in the education sector, where 83% of expend iture seems not to be advertised (see: 
Table 8 below).  
Table 28): Comparisons between expenditure on work s, goods and services by  functions of government 
(based on COFOG data) and the value of publicatio ns in OJ/TED grouped by activities, in 2008 
 COFOG 
expenditure 
[€ million] OJ/TED 
estimated 
publication  
[€ million]OJ/TED 
publications as % 
of expenditure
Health 563,884.20 36,316.12 6%
Education 129,784.80 21,556.80 17%
Social protection 153,859.10 4,516.12 3%
Source: Eurostat (COFOG) and DG MARKT estimates based on OJ/TED 
The above data highlight that in the three sectors concerned: hea lth, social protection 
services and education, the le vels of publication are partic ularly low. This suggests 
that a vast majority of expenditure in thes e sectors is not carried out in line with the 
rules applicable to B-type services - partially, because the value of such contracts 
falls below EU thresholds, but also because  of regulatory settings in those sectors 
that are established at the national level177. To summarise, the way in which 
                                                 
176 See: the Evaluation Report, page 35. 
177 In general, for example, most expenditure on health services or pharmaceuticals are incurred by 
households and reimbursed by the state or statutory sickness insurance funds. In Germany statutory sickness insurance funds are considered to be contracting authorities (i.e. in the Oymanns judgment 
(case C-300/07, 11 June 2009), the ECJ confirmed that German statutory sickness insurance funds are 
contracting authorities under the procurement direc tive 2004/18/EC). In the Netherlands most health 
 
EN 176   EN education, health care and social protecti on services are delivered already seems to 
effectively place most expenditure on goods and services in these sectors outside the scope of the provisions of the Directives . As a result, the pr oposed changes could 
have only limited impact on the provision of these services, as the majority of public 
spending in these sectors is done without the use of public procurement rules defined 
in the Directives.  
Finally, it is expected that more clarity with regards to the correct identification of 
the relevant service categor y could generally improve publ ication rates for services, 
especially for B-type services. Improving cl arity and hence "user-friendliness" of the 
system would facilitate correct identifica tion of these service types could rise the 
publication rates for services.  
It is also worth mentioning th at a slight majority of stak eholders support the idea of 
reviewing the distinction between A and B services
178. Most frequently repeated 
arguments refer to the fact that some of the B-services might not merit differentiated/lighter treatment (for example restaurants, legal services). Stakeholders 
argued that the market in a number of sect ors of B-type servi ces is now developed 
and these should now be made A's (whils t new or emerging services could be 
classified as B, until the markets mature).  
8.7.2.  SCO.LEGI.REDUCE- General in crease of EU thresholds 
In order to analyse the impacts of a genera l increase of EU thresholds we focus on 
the principal three threshold levels (the remaining thres holds have been ignored for 
the sake of clarity of this analysis):  
• goods and services purchased by central government (€ 125,000),  
• goods and services purchased by sub-central government (€ 193,000) and 
• works contracts for all contrac ting authorities (€ 4.85 million).  
The effects of raising the thresholds can be  analysed in various terms – the impacts 
on procedures and the impacts on the size of  market covered by th e Directives (i.e. 
economic importance) have been judged as  the two most important aspects. The 
outputs were based on three scenarios (i.e . increase by 20%, 50% and 100%) and are 
presented below
179.  
8.7.2.1.  Impacts on the use of procedures 
The open procedure is most frequently us ed for lower value contracts and its use 
decreases as contract value incr eases (see: Figures 27 and 28).  
                                                                                                                                                         
expenditure is now in principle made by statutory private health insurance bodies which do not consider 
themselves to be subject to the di rectives (although there is still public funding for children, the elderly 
and unemployed) and who provide services through public or private providers of primary and 
secondary health care. The situation in many other MS is not necessarily clear. 
178 Q 4 of the GP: 53% of MS support this idea and 55% of CAE (but 80% of citizens) 
179 The outputs are presented as annu alized effects, calculated on the basis of 2009. Procurement volume 
(recorded in OJ/TED) has increased during 2010 and that might lead to more significant impacts than 
what has been found based upon the 2009 data; source: PwC study, page 71. 
 
EN 177   EN Figure 27): Values by proce dure, median and mean 2006-2010 
OpenAccel. Negot.Negot. w.o publ.Accel. Restr.TotalNegotiatedRestricted
353 360 356 496 390 712 693 
2 181 2 218 2 279 3 045 3 141 6 672 8 287 
€(thousand)Procedure Median Mean
 
Source: PwC study 
Figure 28): Distribution of pr ocedures and contract valu e (thousand euro increments) 
0 %25 %50 %75 %100 %
0123
Contract value (millions)Competetive 
dialogue
w.o publ
Negotiated
Restricted
Open
 
Source: PwC study 
As a consequence, if thresholds were to be raised, the use of available procurement 
procedures would change, affecting most  significantly the use of open procedure 
which is more frequent in the low end of the value range180.  
The hypothesis that open contest would be  mainly affected by this change is 
confirmed by a simulation, where potential ra ise in thresholds levels (thee variants 
i.e. an increase by 20%, 50% and 100%) we re modelled against the distribution of 
procedures. The results show that the open procedure would be used less frequently 
and will be mainly replaced by the use of re stricted procedure. The use of negotiated 
procedure would also increase albeit at smaller levels. The effect would be the 
largest for works181. The effects of changed thresholds are shown in Figure  9) which 
analyses all three scenarios.  
                                                 
180 Source: PwC study, page 71. 
181 Source: PwC study, page 71. 
 
EN 178   EN Figure 29): Growth rates of use of procedures by in creases in threshold levels (scenarios identified - 
increasing threshold levels by 20%, 50% and 100%) 
-5 % 0 % 5 % 10 % 15 %+20%
+50%
+100%
-5 % 0 % 5 % 10 % 15 % -10 % 0 % 10 % 20 %Open
Restricted
NegotiatedCentral government Sub-central government WorksScenario
 
Source: PwC study 
Less frequent use of open procedure might have negative impact on transparency of 
public procurement regime in general.  
8.7.2.2.  Impacts on the number and volume of transactions no longer covered 
The effects of raising the thresholds can also  be calculated in terms of the number of 
transactions carried out under the Direct ives, and the market volume covered by 
these rules. The outputs based on the three scenarios (i.e. incr ease by 20%, 50% and 
100%) as presented below182.  
Figure 30): Impact on number of transactions and market volume by raising threshold levels (2009 est.) 
rates in percent levels (scenarios identified - increasing threshold levels by 20%, 50% and 100%) 
0,3 %0,8 %2,9 %
0,8 %2,0 %7,3 %
1,7 %3,8 %12,8 %
0 4 8 12 16
Market volume (billions)+100%
+50%
+20%
5 %7 %4 %
12 %15 %9 %
22 %26 %13 %
- 5 000 10 000 CentralSub-
centralWorks
Procurements ('000)Procurements impact Market volume impact (€)
 
Source: PwC study 
The above findings show that market impact  of increasing thresholds could be quite 
significant, especially for works, reaching € 8 billion annually (if the threshold was 
increased by 50 %) or almost € 16 billion (if the threshold was to be doubled).  
In numbers, the sub-central government cate gory sees the most significant impact – 
26% less notices would be published in the OJ/TED if this threshold was to be 
                                                 
182 The outputs are presented as annu alized effects, calculated on the basis of 2009. Procurement volume 
(recorded in OJ/TED) has increased during 2010 and that might lead to more significant impacts than 
what has been found based upon the 2009 data; source: PwC study, page 71. 
 
EN 179   EN doubled and 15% less notices in case of a 50% rise. As far as central government 
supply and services contracts are concerne d, raising this thre shold by 50% and 100% 
would decrease the number of notices  published by respectively 12% and 22%. 
To summarise, the above analysis shows that raising thresholds would reduce the 
size of the market covered by EU public procurement rules (by up to approx. €20 
billion, if all thresholds were to be doubled).  
8.7.3.  PRO.LEGI.DESIGN - Increase in the use of e-procurement 
As presented in the 2010 Evaluation of the e-proc urement Action Plan, the 
Commission supports the transition from  paper-based to on-line procurement 
because it sees the following advantages: 
– Benefits for individual procedures: compared to paper based systems, e-
procurement can help contracting author ities and economic ope rators to reduce 
administrative costs and speed up individual procurement procedures. In the current 
financial climate, such effi ciencies could be very welc ome, maximising the potential 
which can be obtained from limited resources. 
– Benefits in terms of more efficient proc urement administration: the development of 
CPBs, often making extensive use of electr onic procedures, can help to centralise 
costly procurement back-office functions and reap scale economies in procurement 
administration.  
– Greater transparency and better mon itoring of procuremen t: by automating and 
centralising the flow of information about individual tender opportunities, e-
procurement can also enhance the transpar ency and overall efficiency of public 
procurement, opening up markets to more competition and deepening the pool of 
competing suppliers, whilst at the same time improving spend management and overall planning.  
– Potential for integration of EU proc urement markets: e-procurement reduces 
distance barriers and information gaps wh ich could have reduced or discouraged 
cross-border participation in  paper-based procedures. It  should be underlined that, 
while e-procurement can overcome distance-r elated costs to participation in the 
procurement procedure itself, it will not ch ange the relevance of  distance or physical 
proximity in the actual performance of  the underlying busi ness transaction. An 
increasing number of procurements, for ex ample the provision of services such as 
software, design competitions and helpdesks, can be provided from another country and e-procurement should be well suited to publicise, exploit a nd ultimately realise 
such opportunities.  
– Administrative modernisation and simplif ication, encouraging the integration of 
various administrative processes as well as diffusion of ICT in government and 
society.  
In terms of benefits delivered by operations ran across the EU, there were great 
expectations relating to the savings whic h could be realised as a result of the 
introduction of e- procurement.  
 
EN 180   EN The potential to reduce cost s was promoted as a key in centive to encourage the 
switch to electronic procedures. Certain MS ha ve turned it into an objective of their 
national strategy, such as Ireland where fi ve of the quantitativ e targets of their 
national action plan were focused on costs. 
Due to the lack of appropriate data, it is not possible at this stage to evaluate the 
reduction of costs of single procedures in the MS. E-procurement is expected to have initially increased the costs due to th e necessary spending for the creation of 
platforms, but a dramatic decrease of co sts was expected, once the structural costs 
had been absorbed. There is however a sma ll but growing body of proof that savings 
are being realised as a result of e-pr ocurement use (see: Box 3) below). Wider 
anecdotal evidence suggests that many contracting author ities and economic 
operators have made the switch-over to e- procurement and would not contemplate a 
return to paper based pr ocedures. The ePractice
183 website gathers case studies 
showing examples of MS (such as Austri a, Spain, France or Romania) where the 
savings made through e-procurement exceed th e investment and running costs. (for 
more detail see Annex VIII of report, whic h gives a broad overview of the situation 
by MS in terms of savings.)  
Examples of savings and improvements  
- Italian Emilia Romagna's agency In tercent ER offers e-procurement se rvices including e- Marketplace, e-
Catalogues and e-Auctions and is now the reference point for 539 administrations (90% of local agencies). In 
2008 it processed transactions amounting to some € 419 million, delivering efficiency benefits of € 67.5 million 
and time savings of 45 man-years.  
- The Austrian Federal Procurement Agency centralises purchases for federal authorities through e-procurement 
functionalities. In 2008 it reported savings of €178 million against a procurement volume of €830 million. 
Benefits seem to significantly outweigh the annual maintenance costs of €5 million, which are less than 3% of 
the savings.  
- As of 1 February 2005, all contracting authorities in  Denmark may only accept electr onic invoices. This reform 
affects approximately 15 million invoices  a year, and applies to the entire public sector, from ministries to 
nursery schools. The use of e-Invoicing is expected to save the public €100 million every year, on top of savings 
in internal administrative processes.  
- In Norway, the Ehandel platform is helping authorities to achieve 20-40% reductions in the time taken to 
handle orders, receipt of goods and invoicing and de livering price savings in the region of 2-10%.  
- In the UK, the Buying Solutions website reported in its 2008/09 annual report that it had facilitated sales of 
over £5 billion, delivering £732 million in savings. The UK also  reported savings frequently exceeding 10% (and 
even up to 45%) through the use of e- Auctions and re cently announced plans to use e-Auctions to save the 
taxpayer up to £270 million by the end of 2011.  
- A Portuguese study compared the best bids for public works contracted by 50 Portuguese public hospitals in 
2009 (using paper based systems) and 2010 (using e-procurement). It concluded that a cost reduction of 18% had 
been achieved in 2010, due to the increase in competition generated by e-procurement.  
Source: DG MARKT, based on ePractice, nationa l e-procurement sites and MS presentations  
                                                 
183 http://www.epractice.eu/  
 
EN 181   EN 8.7.4.  PRO.LEGI.DESIGN - Improve t ools for repetitive purchasing 
Repetitive purchasing is used by contra cting authorities to  make purchases, 
repeatedly, over a certain period of time. It aims at streamlining and improving the 
timeliness and the effectiveness of the pr ocess of acquiring the goods/services/works 
needed. There are two main repetitive purchasing procedures foreseen by the 
Directives: framework agreements and the DPS. 
A ‘framework agreement’ is an agreem ent between one or more contracting 
authorities and one or more economic operato rs. Its purpose is to establish the terms 
governing contracts to be awar ded during a given period, in particular with regard to 
price and, where appropriate , the quantity envisaged. 
A DPS is a completely electronic process for making repetitive purchases, limited in 
duration and open throughout it s validity to any economic operator which satisfies 
the selection criteria and has submitted an  indicative tender that complies with the 
specification. 
In addition to these two procedures, e-ca talogues (electronic cat alogues), are also a 
useful tool in the context of repetitive  purchasing. An e-catal ogue is an electronic 
document established by a supplier describing goods and services a nd their prices. It 
can constitute a tender, under certain c onditions. In the cont ext of repetitive 
purchasing, e-catalogues can be very useful as  they allow suppliers to rapidly prepare 
an offer, while allowing contracting author ities to evaluate offers in a standard 
format. 
The Directives could improve/simplif y the use of repetitive purchasing 
procedures/tools by increasing clarity when  running these procedures, by making 
them more proportionate and suited to contracting authorit ies' needs and by 
addressing their current shortcomings (ri sk of market closure for framework 
agreements, complex rules for running the DPS etc.). Simplifying and improving the use of these procedures would in turn optimise the use of repetitive purchasing, 
generating additional benefits for both contracting authorities and suppliers. 
Repetitive purchasing and issues of aggreg ation are inevitably evoked in the context 
of CPBs since the reason to establish them is usually to provide smaller contracting authorities with the benefits of economies of scale. According to the Evaluation of 
the Public Procurement Directives, in 2009, over 40% of the value of contracts 
published by central or joint purchasing bodies was through framework agreement contracts (page 10 of the summary of th e Evaluation report). However a single 
contracting authority can also, via repe titive purchasing, aggregate procurement 
needs previously met by dispersed procurem ent entities within its own organisation, 
to provide flexibility over time and acro ss departments. Thus, repetitive purchasing 
can generate economies of scale. 
Moreover, repetitive purchasing is particularly suited for the use of e-procurement, as 
a repetitive purchase is a more standardis ed process, which can more easily be 
processed via electronic means. Comb ining electronic means and repetitive 
purchasing can trigger high transactional sa vings, can increase transparency and can 
improve monitoring capabilities. 
 
EN 182   EN However, repetitive purchasing can increa se the risk of market closure and 
concentration, if repetitive purchasing pr ocedures favour the participation of a 
limited number of participan ts or the use of long term  contracts. Repetitive 
purchasing can also restrict SME participa tion in public tenders if the value of the 
contracts is too high for SMEs  to be able to compete. 
8.7.4.1.  Impacts of using framework contracts 
Framework agreements prove to have lower costs than other procurement 
procedures; thus, increasing their use c ould reduce the average cost of running 
procurement procedures. According to th e Evaluation "framework contracts have 
lower costs per contract than any other fo rm of procurement. There are savings in 
frameworks for both authorities and for fi rms. CAEs costs ar e about 75% of the 
average procedure; firms’ costs are about  83% of the average". Lower transaction 
costs are one of the reasons why the use of framework agreements has increased 
rapidly. Between 2006 and 2009 the number of  framework contracts has increased by 
almost a factor of four184. According to the Evaluation, framework agreements also 
perform better than other procurement procedur es in terms of the number of bids that 
they attract. 
The lower transaction costs and the highe r level of competition when setting up a 
framework agreement should be balanced  against the much lower level of 
competition that exists at the time of each contract under the framework. 
Table below summarises compares the dura tion of the award stage of procurement 
procedures (i.e. the number of calendar days from the deadline for the receipt of 
tenders to award of a contract). As Figur e 31) shows, aggregated procedures are 
usually more time consuming than thos e which do not use the below mentioned 
techniques.  
Figure 31): Duration of procedures in calendar days (award stage) by aggregation techniques 
57586666
52 54 56 58 60 62 64 66 68Non-frameworkAll contractsFrameworkJoint purchasing
 
Source: PwC study  
                                                 
184 The Evaluation report, page 10  
 
EN 183   EN The GP responses and the Evaluation show  that many stakeholders and MS are 
concerned that framework agreements may close particular markets to competition 
for significant periods of time and that the size of the contracts may put them well 
beyond the ability of SMEs to bid for th em. Indeed, the evaluation shows that 
framework contracts are twice the value of regular purchas es, increasing the risk of 
low SME participation. 
Thus, the use or the design of framework agreements should be amended to prevent 
more effectively the potential risk of mark et closure and to increase competition and 
SME participation.  
8.7.4.2.  Impacts of increasing the use of the DPS 
As a fully electronic procedure for repetitive purchasing, the DPS can reduce 
transaction costs and increase transparency  for contract award. Moreover, the DPS, 
contrary to the framework agreement, is  open to new participants throughout its 
duration, which increases competition and favours SME participation. Thus, increasing the use of DPS can increase the openness of particular markets to 
competition, while providing the advantages of repetitive purchasing described above. 
However, the costs of running a DPS are high. According to the Evaluation running a 
DPS is the most expensiv e procurement procedure
185. Moreover, almost 40% of the 
respondents to the Green Paper on e-procurem ent perceive the cu rrent provisions on 
DPS as complex and not adapted to contra cting authorities' and suppliers' needs. 
They call for clearer provisions on th e DPS and simpler rules for running it. 
The Evaluation shows that so far the actual use of the DPS has been marginal. This 
low use also seems to demonstrate a mis understanding of the provisions. So far, 10 
MS have added further provisions, clarifyi ng the conceptual framework, the different 
stages and scope of a DPS, which may actuall y show that there was indeed some lack 
of clarity in the origin al provisions on DPS.  
Thus, in order to capitalise on the advantages of the D PS, the procedure should be 
clarified, simplified and made more flexible as to increase its attractiveness and to reduce the costs of running it. 
8.7.4.3.  Impacts of using e-catalogues 
E-catalogues provide various advantages to suppliers and contra cting authorities. 
They have improved reliability, allowing for quick up-dates of relevant product 
information. They can reduce the time needed  to input product data and can generate 
cost reductions for data processing opera tions (these have not been quantified). 
Moreover, in the context of repetitive purch asing they allow quicker submissions of 
offers for suppliers and improved ordering procedures for contr acting authorities. 
The impact assessment on the 2004 action plan, noted that e-Catalogues appear to be 
used mostly by central purchasing bodies for ordering under framework agreements, using ad-hoc e-Catalogues. 
                                                
 
185 The Evaluation report, page 19 
 
EN 184   EN There are a number of providers of e-cata logue systems, but the underlying data or 
structures are not interopera ble or easily interchangeable between these systems (cf. 
page 108 of the Evaluation). This can compli cate the task of suppliers who have to 
use different e-catalogue formats. Moreover,  if contracting aut horities do not make 
available the format of e-cata logues for their suppliers or if  the cost of establishing 
an e-catalogue is too high, SME particip ation in e-procuremen t can be restricted186. 
Thus, European legislation should clearly  define e-catalogues, the conditions under 
which they may be used and possibly co mmon formats to be applied to ensure 
interoperability and easy access by suppliers. 
8.7.5.  PRO.LEGI.FLEXIB - Perm it more negotiations 
One of the headline actions identified unde r PRO.LEGI.FLEXIB option would be to 
permit more negotiations, for example by putting the negotiate d procedure with 
publication on equal footing with  other procedures in the Classic Directive. Impacts 
of such proposal would be significant, as until now the use of negotiated procedure 
was an exceptional method of awarding a cont ract which could be used exclusively 
under specific circumstances (i.e. a list of  these circumstances was enumerated in 
Art. 30 of the Classic Directive).  
Greater freedom to use negotiations was basically supported by the majority of 
respondents to the GP, across all stakeholders groups187. The main argument 
presented in the GP consultation was th at negotiation would permit the needs of 
CAEs to be addressed more efficiently188. This possibility is also compatible with the 
GPA.  
8.7.5.1.  Impact on the costs of procedures 
The negotiated procedure is less expensive th an open and restricted  procedures, as it 
attracts less competition (so the global co sts are lower due to lower costs for 
businesses). The total cost of a t ypical negotiated procedure is around €26'000 
compared with around a thousand euro mo re in the open contests and almost €42'000 
cost of running the restricted procedure.  
The positive cost effectiveness of this legi slative proposal would also be driven by 
increased simplification of the legislative framework. The current rules are complex, as each time negotiated procedure with public ation is used, a CAEs need to justify 
the use of such procedure. If the nego tiated procedure with publication was more 
easily available, there could be less incentiv e to circumvent the Directives (e.g. by 
direct awards) and again, this could resu lt in more effective use of public funds.  
However, the overall cost-effectiveness of the negotiated procedure may be 
negatively affected by the fact that the negotiated procedure is less efficient in 
generating savings than the ope n and restricted procedures
189. As a result, CAEs may 
                                                 
186 The Evaluation report, page 108 
187 Replies to question 19 of the GP. 
188 Replies to question 19 of the GP. 
189 " Using the open procedure is associated with benefits of a 3 % lower award value when compared to 
cases where non-standard procedures were used ", source: Europe Economics study, page 52. 
 
EN 185   EN pay higher prices per purchase and the pr eviously mentioned benefits of lower 
transaction costs may level off (to some extent). 
Figure 32): Typical cost of a procedure [in '000] 
5.19.05.85.5
22.432.920.322.4
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0OpenRestrictedNegotiatedTotal
Costs for authorities
Costs for firms 
 
Source: PwC study 
8.7.5.2.  Impacts on competition 
If negotiated procedure becomes more fre quently used due to  the introduction of 
legislative changes foreseen under opti on PRO.LEGI.FLEXIB, this might have 
negative impact on competition as the ty pical negotiated procedure attracts fewer 
tenders than the corresponding open procedure. 
Figure 33): Number of bids received by procedure and technique (mean) 
Average number of bids
3.94.85.45.55.7
0123456Competitive DialogueNegotiatedAll contractsRestrictedOpen
 
Source: PwC study 
Additionally, an econometric analysis usi ng a number of variables that could 
contribute to the variation in the number of bids that a call for tenders receives has 
confirmed some of the results of the desc riptive analysis presented above but also 
 
EN 186   EN highlighted other effects. The econometric analysis thus investigated which effects 
can be uniquely attributed to each explan atory variable and showed that negotiated 
procedures would, holding all else equal, r eceive less offers than the open procedure 
(by roughly 2.2%). The results of the regr ession are presented on Figure 34) below. 
Figure 34): Estimated impact of type  of procedure on number of offers 
-2,2
-0,6
0,8
0,7
-0,3
0,5
0,4Negotiated vs Open
Restricted vs Open
Framework vs non- …
EMAT vs price
EC funded
e-auction
Joint purchasingImpact on # of offers
 
Source: PwC study 
8.7.5.3.  Impacts on the duration of the award stage 
While analysing economic impacts the intr oduction of unlimited right to use the 
negotiated procedure with publication, we should mention a draw-back concerning 
its lower time-efficiency when comp ared with the open procedure.  
Figure 35): Time from the deadline for the receipt of tend ers to award of a contract in days, by procedure 
5358119127160245
0 50 100 150 200 250 300OpenAll contractsNegotiated without publicationNegotiated with publicationRestrictedCompetitive Dialogue
 
Source: PwC study 
As the above figure shows, the negotiate d procedure with publication takes much 
more time to award (usually 127 days) than  the open procedure (typically 53 days). 
The time that elapses until the award of a contract is especially problematic for the firms for whom this 1/3 of a year spent on decision-making means additional 
 
EN 187   EN business uncertainty (as they have invested  resources in bidding and do not know if 
they were successful or not). 
8.7.5.4.  Impacts on the costs of procedures  
In 2009, in the utilities sect ors the negotiated procedur e with publication (which 
under the Utilities Directive is  a standard procedure) was used in 43% of awarded 
contracts (see: Figure 36).  
Figure 36): The use of procedures in the utilitie s sector in 2009 (based on the number of CANs) 
12%43%38%6%
0%10%20%30%40%50%60%70%80%90%100%
100%Restricted
Open
Negotiated with
competition
Negotiated without
competition
 
Source: DG MARKT based on OJ/TED data  
In the same year, this procedure was used  only in 4% of notices published in the 
classical sector. If we assume, that after the proposed legislativ e revision the use of 
negotiated procedure with publication in the classical sector would become similar to 
the utilities sector (i.e. it would rise from 4% to 43%), this would mean that for 
around 47,000 transactions yearl y, costs of public procurem ent procedures would be 
lower by € 1,200, hence the global costs w ould diminish by roughly € 56 million per 
year. 
Another source of savings in the costs of procedure would come from the fact that 
the negotiated procedure attracts less comp etition and therefore the global costs of 
procedures would drop, because less offers in  total would be prep ared by businesses.  
8.7.5.5.  Impacts on cross-border trade 
More frequent recourse to the negotiate d procedure could im prove cross-border 
penetration of public procurement markets as  contracts awarder und er this procedure 
are more frequently awarded to fore ign suppliers (see: Table 29 below). 
 
EN 188   EN Table 29): Value of direct cross-border proc urement by procedure [in %] in 2007-2009 
Procedure Direct cross-border 
[%] – 
Classic DirectiveDirect cross-border 
[%] -  
Utilities Directive 
Open 2% 5% 
Restricted 4% 2% 
Negotiated with publication 4% 10% 
Negotiated without publication 6% 11% 
Accelerated restricted 3% - 
Accelerated negotiated 23% - 
Competitive dialogue 1% - 
Source: Rambøll study 
The use of negotiated procedure was also identified as a significant factor having 
positive influence on direct cross-border proc urement. In a model that was analysing 
factors from the buy and sell side, the effect  coefficient of the use of the negotiated 
procedure as compared with the open pr ocedure was estimated at 46.3% (i.e. the 
chance of direct cross-border award if the negotiated procedure is used are 46.3% 
higher than if the open contests wa s used), see: Figure 37) below. 
Figure 37) Factors with influence on direct cross-border procurement 
Specifics of 
contract
Member 
States
Buy/sell 
side
-5,4%44,8%46,3%-36,0%110,1%6,0%21,3%97,1%-4,0%68,3%269,1%168,6%
-100% -50% 0% 50% 100% 150% 200% 250% 300%SubcontractingNumber of bidsContract value (m EUR, logarithm)3Negotiated vs. open procedureRestricted vs. open procedureLocal GovernmentCentral GovernmentFinanced by Community fundsCorruption index2Common language1New Member StateMember of the euro areaPopulation (Mio)Services vs. worksSupplies vs. worksUtilities vs. Classical Directive
Effect coefficient – influence on chance of direct cross-border award Not statistically significant
Not statistically significant
Not statistically significant
Not statistically significant
1 I.e. shares a language with another Member State
2 The higher the index, the lower the perceived level of corruption
3Due to logarithm not directly interpretable  
Source: Rambøll study 
 
EN 189   EN If the above relationship is sustained after the introductions of legislative changes in 
the Directives, unlimited right to use th e negotiated procedure with publication 
should positively influence cr oss-border penetration in publ ic procurement markets. 
8.7.6.  PRO.LEGI.FLEXIB - New lighter regime for sub-central authorities  
In direct response to c oncerns that current pro cedural requirements impose 
disproportionate costs on CAEs and supplie rs, efforts could be made to design a  
lighter procedure  based on periodic announcements of planned procedures or a 
constantly updated poster-board  of current procedures. Su ch approaches could also 
maintain some common element of tran sparency to sustain wide supplier 
involvement, competition and improved procurement outcomes. Designing a 
procedure that delivers meaningful pro cedural benefits while meeting existing 
international requirements would be challe nging. One area where there is still some 
room to manoeuvre in terms of the "fit" between the current GPA requirements and 
the current EU rules, is the regime app lied to sub-central authorities – a market 
representing around 33% of CANs (a pprox. 45,000 p.a.) and worth some €116 
billion p.a. (28% of total).  
Table 30): Economic importance of sub-central authorities procurement 
 Number of CANs 
removed (% of 
CANs ) Value of CANs 
removed (% of 
total value) Internat. 
conse 
quences Comments 
Sub-central authorities 45,000 (33%) €116 billion (28% ) Yes Could be more – "other" 
or "bodies governed by 
public law" not counted 
Source: DG MARKT estimates based on OJ/TED data 
Due to limited room to manoeuvre in terms of the "fit" between the current GPA 
requirements and the current EU rules, the new lighter regime w ould be available to 
sub-central authorities only i.e. a market  representing around 33%  of CANs (approx. 
45,000 p.a.) and worth some €116 billion p.a. (2 8% of total) based on 2009 data (see 
overleaf).  
This estimated global figure could be signifi cantly higher as sub-central authorities 
very frequently publish their notices as “bodi es governed by public law” or "other".  
 
EN 190   EN Figure 38): Shares in the number of  CANs and value of procurement pu blished in OJ/TED in 2009 by 
type of authority [in %]  
14%33%
9%21% 22%20%28%
19% 18%16%
0%5%10%15%20%25%30%35%
Central Sub-
centralUtilities Body
governed
by public
lawOthernumber
value
 
Source: DG MARKT estimates based on OJ/TED data 
8.7.7.  STR.LEGI.FACILIT - Directly linked  externalities taken into account 
If the need for sele ction and award criteria to ha ve a strong, objec tive link to the 
object of contract purchase were to be weakened it would be necessary to ensure safeguards to avoid the imposition of discriminatory criteria and uphold treaty principles. For example one could use sustai nable criteria that are not related to the 
physical characteristics of the product but only to the process by which it had been 
produced. Such criteria might however incr ease the costs and time taken for CAEs, 
particularly in the tasks of drafting speci fications and evaluati on of offers. Again, 
they might need to invest in additional trai ning, or the use of experts, to achieve the 
required level of knowledge. 
26 of the 30 EEA MS have targeted specific product groups (in general, some or all 
of the product groups for which the Commi ssion has established criteria) in their 
action plans. Construction and trans port are among the most common product 
groups. These, together with Office IT  equipment, make up a considerable 
proportion of the total value of contracts awarded above the thresholds amounting to 
more than € 100 billion. Construction and transport have been identified in the 2011 European Energy Efficiency Plan as havi ng the greatest energy saving potentials. 
They are thus in a strong pos ition to meet national targets.
 
Examples of the benefits of GPP (taken from the Buying Green Handbook 2011): 
• The City of Vienna saved €44.4 milli on and over 100,000 tonnes of CO2 between 
2004 and 2007, through its EcoBuy programme. 
• 3 million tonnes of CO2 would be saved in the Netherlands alone if all Dutch 
public authorities applied the national Sustainable Public Procurement criteria, which include green criteria. Public sect or energy consumption would be reduced 
by 10%. 
 
EN 191   EN • If all IT purchases in Europe followe d the example of Copenhagen City Council 
and the Swedish Administrative Development Agency, energy consumption 
would be cut by around 30 terawatthours – roug hly the equivalent of four nuclear 
reactors. 
• £40.7 million (€47.2 million) could be saved in the UK if the proposed 
Government Buying Standards (GPP cr iteria) are applied by all central 
government departments and executive ag encies, according to  a cost-benefit 
analysis which monetised the potential impacts. 
• CO2 emissions would be cut by 15 million tonnes per year if the whole EU 
adopted the same environmental criteria for lighting and office equipment as the 
City of Turku, Finland – reduci ng electricity consumption by 50%. 
8.7.8.  STR.LEGI.FACILIT - In novation partnership 
Pre-commercial procurement is considered as a well-suited instrument for promoting 
innovation by a large majority of respondent s to the Green Paper consultation. Most 
stakeholders are also clearly in favour of further measures to promote and stimulate 
innovation through public procurement and have  suggested that more widespread use 
of the competitive dialogue, design contes t and in particular the negotiated 
procedure, as well as a wider allowance of  variants and performance requirements in 
technical specifications  could be helpful. 
According to a recent survey of contr acting authorities, 48% seek innovative 
products, solutions or services  in their tender do cuments on at least some occasions; 
7% indicate that they aim to do this as mu ch as possible and 10% indicate that they 
do so regularly190.  
Procurement officers have to be particul arly experienced in order to encourage 
innovative solutions without restricting competition. The difficulty comes from the 
need to evaluate and compare different solu tions or products at an early stage, while 
they are still far from entering volume pr oduction. Of the survey participants 55% 
believe the procurement procedure to be  more complex if innovation-promoting 
requirements are included in calls for tenders.  
Simply allowing for variants or alternat ive solutions does not  signal to potential 
suppliers that the contracting authority is  looking for an innovative solution. The aim 
of the new innovative partne rship procedure would allo w CAE to clearly indicate 
their interest in such proposals, while re taining broad competition and ensuring that 
the procedure could be conducted in stages and reviewed as the solution approached 
full scale production to enable the partnershi p to be terminated and a normal call for 
tenders initiated. 
                                                 
190 Adelphi study page 82, for complexity (below) see page 140. 
 
EN 192   EN 8.7.9.  STR.LEGI.ENFORC - Quotas in strategic procurement 
Most stakeholder groups, including busin esses, public authorities and Member 
States, which responded to the GP consulta tion are against introduc ing obligations on 
"what to buy" in EU public procurement rules.  
Most frequently raised arguments against su ch obligations are the fear of too much 
interference from the EU in the decisions of public purchas ers, increased complexity 
of the legal framework, the risk  of affecting contracting au thorities’ ability to adapt 
their purchasing decisions to their specific needs, risks of price increases and of 
disproportionate administrative costs for public purchasers and businesses, 
particularly SMEs. 
MS have already established national action plans (NAP) in order to set a (generally 
non obligatory) targets for increased leve ls of green public procurement within 
certain groups of products. These NAPs have not yet been evaluated in most MS and 
it is not clear whether they are having a si gnificant impact on c ontracting authorities' 
behaviour. Establishing mandatory quot as would seem premature while the 
effectiveness of voluntary measur es has not yet been assessed. 
Imposing the use of criteria for strategic goa ls such as environmentally sustainable or 
socially responsible procurement for a certa in percentage of purchases would provide 
no incentive for contracting authorities to consider which of their purchases could 
make the greatest contribution to achieving a particular strategic goa l at least cost to 
society. 
8.7.10.  ACC.LEGI.FACILIT - European public procurement passport 
The European public procurement passport may be defined as a "certificate of 
certificates" issued by a trusted agency in a MS which includes in one single document a statement for each piece of evid ence commonly required of an economic 
operator wishing to participate in a call for tenders.  
For ease of presentation, each line of the Passport Certificate could be seen as 
replacing a traditional evidenti ary document or statement that is issued by a specific 
(national or local) public body in  a MS to certify a particular  status of a given firm 
(e.g. "absence of conviction for the representatives of a co mpany", or "statement of 
compliance with Social S ecurity obligations").  
An economic operator wishing to respond to  a call for tender would no longer be 
requested to include in the tendering package all the ce rtificates and statements 
demanded by the CAE, but would simply a ttach its own passport certificate instead, 
which incorporates all the statements in one single document.  
The passport is issued by a public agency in  the MS, from now on referred to as the 
Passport Agency (PA), upon request from an  economic operator. In the application, 
the firm spells out all the evidentiary elem ents that the passport certificate has to 
contain and the firm has to attach to it all the original certificates and statements 
providing said evidence. The PA verifies the original statements and certificates and 
draws up the passport certificate, providing: 
 
EN 193   EN • a binary positive or negative mark (e.g. Y or N) for all those statements that 
certify the presence or absence of a given requirement (e.g. "statement of 
compliance with Social Security obligations"); 
• structured information to document speci fic data for all the certificates that 
describe more complex situations (e.g. the total annual turnover in a balance 
sheet). 
A passport certificate has a validity limited in time. Any CAE in the EU has to accept 
in procurement a passport certificate issued by any EU PA as long as  the certificate is 
not expired. 
8.7.10.1.  Implications 
The Passport model is essentially a new ad ministrative concept and business model 
rather than an e-procuremen t application. In fact, it can  entirely be en forced using 
traditional paper and mail communication. 
However, it simplifies to a very large extent  the automation scenario because it lays 
the foundation for a business document (the Pass port Certificate) that is structured in 
a consistent manner and that is issued  by one specific body in each MS that 
everybody knows and has access to. This simp lifies to a very large extent the 
networking concerns. 
In addition, by decoupling the evidentiary  procedure within procurement and the 
actual request of traditional certificates from the National issuers (which remains 
indispensible), the EU-level automation scen ario is freed from the nightmare of a 
CAE having to collect electronic eviden ce from the National issuers, which has 
proved extremely unrealistic so far (and probabl y will be so for many years to come.)  
As pre-requisite for the model to work effectively EU law needs to define 
unequivocally the evidence that CAEs may ask for. e-Certis would form the basis for 
this. 
8.7.10.2.  Advantages and disadvantages 
Advantages: 1. the economic operator asks for the st atements and certificates from the 
National issuers only once within the establ ished validity peri od of the Passport 
Certificate and uses the Passport Certificate an unlimited number of times within the validity period; 
2. the Passport Certificate is very easy to standardise in an EU (language-
independent) format, thereby enabling auto mated processing (evaluation) of the 
information at the receiving point (i.e. the CAE e-procurement system). 27 national 
PA, under various possible arrangements, can easily be asked to collaborate over IT 
solutions; 
3. other technical issues inherent to cross-border e-procurement, such as 
authentication of the evidentiary document, would also greatly be simplified due to 
the simplification of the networking model; 
 
EN 194   EN 4. Cross-border recognition of  certificates and attestat ion would no longer be an 
issue because CAEs are bound to accept th e Passport Certificate coming from EU 
recognised bodies (i.e. the PA); 
5. The model would be implemented supportin g any National infrastructure as is. 
The EU regulatory / legislative jurisdiction is just limited to the relationship between a CAE and a PA, leaving with the MS the responsibility to define the model for 
requesting, documenting and obtaining a Passport, as well as to defi ne rules to  set up 
and run the national PA. Countries that have implemented e-Certificates and e-
Attestation solutions (e.g. VCD-based) woul d take on board all their own established 
assets. (The task of collecti ng certificates and attestations  issued within a country is 
shifted from the contracting authority to th e PA that will use all the mechanisms and 
infrastructure already in place to do so). This would enable to seamlessly support in 
cross-border applications very different  maturity models - MS that are more 
advanced in the "dematerialisation" of cer tificates will apply very efficiently the 
business model without being affected by the delay that may occur in other MS. 
Downsides of the solution: 1. MS are requested to set up a new public service (the PA) either as an entirely 
new body or as a specific division of an existing body; 
2. The workload for the PA would be quite  significant, receivi ng a great deal of 
applications to be examined plus renewals  each time the passport certificates expire. 
8.7.11.  GOV.LEGI.TARGET - New organisation of CPBs 
Through the aggregation of demand CPBs c ould significantly diminish costs of 
procedures. As mentioned before, one fo r of aggregated purchasing – running a 
framework agreements is associated with  lower cost than running "standard" 
restricted or negotiated procedures
191. However, procurement techniques that involve 
aggregation usually take longer to aw ard than non-aggregated procurement 
processes192. 
CPBs would improve the profe ssionalisation of procurement as they would have the 
specialised skills and expert ise in running procurement tr ansactions. CPBs are also 
better resourced to carry out procuremen t involving pursue of strategic objectives 
(e.g. CPBs would have the expertise to ev aluate complex or sophisticated tenders 
regarding new, innovative or eco-inn ovative products and services).  
While impacts of the expected growing importa nce of CPBs are to be evaluated, it is 
important to notice that aggr egation of demand as such could have some negative 
impacts on transparency and competition. 
                                                 
191 The costs per procedure for CAEs are €5,400 in the case of a framework ag reement, whereas it is 
€9,000 for the restricted and €5,800 for the negotia ted procedures, although th e framework contracts are 
still slightly more expensive for CAEs than the open procedure, which typically costs €5,100 per transaction; for more details see: section 8.8.4. 
192 66 calendar days in case of framework agreements and joint purchasing, compar ed with an average of 
58 day for all procurement or 53 days for non-framework contracts; see: section 8.7.4.1. 
 
EN 195   EN 8.7.12.  GOV.LEGI.ENHANC – Oblige Member States  to identify nati onal authority in 
charge of implementation, control and m onitoring of public procurement which 
reports annually on performance 
8.7.12.1.  Current situation  
All MS have an audit system on public pr ocurement and contra cting authorities. 
Audits are not necessarily focussed on the proper application of EU public 
procurement rules, but include in most ca ses a check list on the respect of public 
procurement national rules. In many MS this  ex-post control is already flanked by 
ex-ante control or advice. However this is not always done in a structured and similar 
way in all MS. 
Consultations with the Member States 193 show that Member States consider that 
their own surveillance of their CAEs is currently too weak. Many Member States 
admit that there are still too many failure s which could have been avoided if the 
structural weakness had been  addressed in advance.  
According to the most recent overview conducted in 2010 by the PPN and including 
institutional aspects, at least 17 MS alrea dy have a body in charge of legal oversight, 
legal advice or technical advice to CAEs. The establ ishment of this type of 
supporting body, endowed with greater or lesser powers depending on the local 
situation, has already been expanding across MS on their own initiative, demonstrating the strong demand for consiste nt advice, ex-ante c ontrol of respect of 
public procurement rules (at least at nationa l level) and for independent and objective 
opinion on the functioning and performance of procurement policies.  
Currently, as discussed in the problem statement, insufficient expertise in the 
preparation of public procurement contract s leads to the bad drafting of calls for 
tender and inefficient management of the various phases of the procurement 
procedure. Whilst the 2011 evaluation stated that litigation costs are overall a minor 
part of procurement costs, there is wide agreement that litigation, and the fear of 
incurring it is a major factor influenci ng the behaviour and choices made by CAEs 
and businesses. 
8.7.12.2.  Reporting obligations: 
The oversight body could also take over the responsibility of meeting the statistical 
obligations of the existing Directives whic h are currently addre ssed to MS, without 
stipulating which body in a MS needs to co llect and compile the statistics. Some 
adaptations would be needed because of the expected introduction of new rules, 
compared to the previous regime. 
Moreover the existing monitoring of the social and environmental framework is 
currently unsatisfactory and should be ex tended as MS are currently unable to 
monitor and supervise the eff ect of their own na tional specific policie s or to ensure 
that there is no conflict of interest. 
                                                
 
193 During the ACPC meeting in May 2011, following the presentation of DG REGIO report. 
 
EN 196   EN 8.7.12.3.  Technical support 
To-date technical support is provided by either the exis ting oversight bodies or by 
other public bodies with a specific sectoral mission. In this area there is a need to 
systematise and better structure legal advice and expertise.  
An OECD study on centralised purchase c onfirms the added value of CPBs in 
providing additional and robust legal expert ise, economic advice and detailed market 
knowledge. For instance, Consip has a resear ch department which can consider the 
strategic importance of the evolution of markets for IT products and services in the 
procurement field. This study also notes that  public procurement must become more 
professional; not only because of the cha nging legal environment, but because of the 
increasing number of policy objec tives it is being used to serve in the current context. 
In principle, such advice could equally  be provided via th e "knowledge centres" 
being proposed or by the national oversight body. 
CAEs constantly face the need to respond to evolving markets and procurement can 
require specialised skills either from an economic or from a technical or legal point 
of view. Some forms of procurements whic h serve to satisfy modern society needs 
are very sophisticated (e.g. Competitiv e dialogue or PPP s). A 2008 UN study 
("Guidebook on promoting good governance in  PPPs") demonstrated the need for 
sound governance for PPPs and insisted that such contracts are challenging because 
of the skills needed all along across life (from prep aration to negotiation to 
management of the project). The study found that the vast major ity of the CAs have 
no such skills and need private consultants,  which may generate considerable costs. 
It is interesting to consider the example provided by Finland during a CCMP 
discussion (May 2011) where it mentioned a hot-line intend ed to provide assistance 
in the context of EU co-financed contracts.  Finland indicated that a small help-desk 
unit costs to the state €200.000 (according to the minutes of the meeting), showing 
that structures delivering positive impact s can be put in place without incurring 
major cost. 
The financial burden of such services is shar ed in different ways in different Member 
States. Either CPB services are financed by a specific government  budget line or they 
can be paid for on a fee basis (with, for example a charge based on a certain the 
percentage of the cont ract value, e.g. 0.6%). 
Support to businesses is al ready provided through existin g networks such as the 
single points of contact used  for the services directive, or chambers of commerce, 
which currently advise business on public pr ocurement issues in a large number of 
MS. In this case it may only require some adaptation to th e type of advice, such as 
providing better training in order to upgrade existing expe rtise and provide a clear 
legal framework at national level.  
8.7.12.4.  Conclusions 
Whilst many Member States have some overs ight and reporting structures in place, 
they vary considerably. Several publicati ons and discussions point to a need for 
increased consistency of application and monitoring. However the actual structures 
 
EN 197   EN put in place would need to be adapted to individual circumstances and existing 
provision. It would not be pr oportionate to dictate a "one  size fits al l" solution. 
8.7.12.5.  Possible impact of creating oversight bodies  (back of the enve lope calculations) 
An initiative to establish oversight bodies in all MS would have the most significant 
impact on those MS that are currently w ithout any centralised body carrying out such 
oversight. For Member States where such bodi es already exist, the impact would be 
limited, consisting mainly of adjustment of an  institutional nature due to the need to 
adapt and probably complete the range of  activities and powers or to ensure 
independence, from a tutelary ministry. 
Little information is publicly available on the costs incurred by MS with a body or 
department specifically in charge of public  procurement. It would appear that the 
staff involved at present ranges from 25 to  200 people according to the exact tasks 
and size of the MS concerned (e.g. 20 people in  small units like SE or BE or 200+ in 
bigger structures). 
The number of staff involved in the larges t CPBs (which also function as knowledge 
centres ranges from 100 to 900 peopl e (with a rough average of 250 people). 
Assuming that MS will adopt a centralised st ructure to ensure technical assistance to 
CAs, financial and administrative burden would be probably equal to a medium-size 
CPB. Here we assume that imp lies an additional staff of around 150. 
Based on an average monthly cost of labour of €2,266194 (Eurostat), and assuming 
that all Member States will set up comple tely new structures for an oversight body, 
containing 150 staff, with an  additional 50% to cover overhead costs, the estimated 
total cost would be around €165 million per year across EU. These figures are very 
rough, and could be easily crit icised - the staff cost is low and does not assume any 
management structure, but the number of staff is perhaps high – so there may be some "netting out". 
However, such oversight bodies s hould generate savings and benefits
195 which 
would, ultimately, enhance complian ce and reduce errors. A recent study196 showed 
that publishing an Invitation to Tender (I TT) is associated with 1% reduction in 
award value of the contract, (c ompared to the initial estimated value) and that the use 
of an open procedure increases estimated sa vings by 3%. Hence, the total effect for 
using an open procedure and publishi ng a contract notice is about 4%. 
During the audits carried out by DG REGIO in the context of structural funds 
implementation, an average of 40% of irregul arities detected were  attributable to 
public procurement197. The most frequent weaknesse s related to: an inadequate 
                                                 
194 Eurostat, Monthly labour costs in 2005 (based on table "tps00174") 
195 The National Audit Office in UK, scrutinising public spending on behalf of Parliament states that " Our 
work leads to savings and other e fficiency gains worth many millions of  pounds: at least £9 for every £1 
spent running the Office ." 
196 Europe Economics, Estimating the benefits from the Procurement Directives", London 2011, see page 
vi. 
197 In 2009 Report , of the European Court of Auditors found that 43% of errors are attributable to public 
procurement, and this represent three quarters of the estimated error rate wh ich was estimated by the 
court as being 5%.  
 
EN 198   EN assessment of bids (40%); absence of te ndering or awards ba sed on inappropriate 
tendering procedures and award of suppl ementary contracts without competition 
(34%); and non-compliance with publication requirements (22%). The same audit identified the causes of errors to be the weak management and control systems at the 
level of managing authorities/intermediate  bodies and the lack of administrative 
capacity and knowledge of the public procur ement rules, both at the level of the 
managing authorities and at th e level of contracting authorities. Similar findings were 
confirmed by the European Court of Audito rs, in its 2009 Report. 43% of errors were 
attributable to public procurement, whic h represented three quarters of the total 
estimated error rate of 5% . This would imply that th e error rate corresponding to 
public procurement irregularities is of 3.75%. 
Considering that the oversi ght body should reduce at leas t the errors due to the 
wrong choice of procedure and inadequate  publication, a rough es timate of savings 
would be around €360 million
198 across EU. Compared to th e costs of setting up and 
running the structures, estimated at €165 milli on, this would result in a net saving of 
around €200 million. A reduction in errors a nd a potentially increased compliance 
rate could also lead to a reduction in the number of infringements, which would 
generate further savings.  
8.8. ANNEX 8 – Background data to suppo rt the analysis of impacts  
8.8.1.  Comparison between above and below EU-thresholds procurement 
In a recent survey, CAE have been aske d about perceptions concerning comparisons 
between above and below EU-threshold proc urement. Most purchasers have seen 
time and costs as being higher in above- threshold procurement (see: Figure 39). 
Figure 39): Comparison of above versus belo w EU threshold procurement (replies by CAEs)  
Open Restricted Negotiated
Much less than for below threshold Less No difference More Much more than for below threshold9% 
14% 
7% 32% 
23% 
17% 
17% 
14% 
15% 
11% 
12% 
12% 
11% 27% 
14% 
12% 
8% 
6% 
4% 
6% 
4% 
4% 
4% 
0 % 25 % 50 % 75 % 100 %Time process
Cost process
Risk of complaints
Transparency 
Fairness
No. of bids
Efficiency
Bids from abroad
Price improvements
Quality improvements11 %22 %28 %
26 %
16 %
23 %
19 %
19 %
11 %
11 %
14 %
12 %38 %
27 %
15 %
10 %
7 %
7 %
5 %
5 %
4 %
4 %
0 % 25 % 50 % 75 % 100 %ss
ss
s
y 
s
s
cy
d
ts
ts19% 28% 
22% 
17% 
20% 
16% 
16% 
12% 
17% 
16% 
14% 31% 
18% 
14% 
6% 6% 
4% 
4% 
4% 
4% 
3% 
0 % 25 % 50 % 75 % 100 %ss
ss
ts
y 
s
s
cy
d
ts
ts
 
Source: PwC study 
                                                 
198 Out of 5% error rate estimated by ECA, we took only 3.75% attributable to public procurement and we 
considered a 4% savings on these contracts. 
 
EN 199   EN Overall, authorities consider  that the above threshold pr ocedures are more or much 
more costly than below thresholds (e.g. 37% in the open procedure versus 13% who 
responded that below threshold were more costly). A large majority of respondents consider that the above threshold procedur es take longer to co mplete (e.g. between 
59% in the open procedure and 66% in  case of the restricted procedure). 
Whereas firms are concerned, their percepti ons of the differences between above and 
below threshold procedures are more atte nuated, however still more respondents see 
the latter as less time consuming. Most firms find the cost of procedures similar (see: 
Figure 40). 
Figure 40): Comparison of above versus belo w EU threshold procurement (replies by firms)  
Open Restricted Negotiated
Much less than for below threshold Less No difference More Much more than for below threshold8% 
16% 11% 
17% 
13% 
20% 
10% 20% 
20% 
19% 
17% 
14% 
17% 
10% 
15% 
16% 
8% 18% 
8% 
15% 
11% 
4% 
4% 
5% 
3% 
3% 
0 % 25 % 50 % 75 % 100 %e
e
t
s
y
y 
s
s
y
d 16% 11% 
12% 
15% 
19% 
14% 21% 
20% 
21% 
13% 
19% 
11% 
15% 
15% 
14% 
9% 13% 
10% 
11% 
8% 
11% 
7% 
7% 
0 % 25 % 50 % 75 % 100 %e
e
t
s
y
y 
s
s
y
d7% 
15% 10% 
13% 
15% 
11% 
16% 
15% 23% 
20% 
19% 
21% 
18% 
18% 
16% 
18% 
16% 
13% 12% 
10% 
10% 
5% 
6% 
6% 
0 % 25 % 50 % 75 % 100 %Time process
Price weight
Cost process
No. of bids
Quality weight
Transparency 
Risk of complaints
Fairness
Efficiency
Bids from abroad
 
Source: PwC study 
Perceptions of higher level of competition in above EU thresholds can be observed 
across both types of responde nts (CAE and businesses).  
8.8.2.  Comparison between above EU-thresholds procurement and private procurement 
While comparing public procurement with pr ivate procurement, a clear observation 
emerges that the costs of public procurement are higher or much higher. Efficiency of private sector procurement is also rate d higher than for public procurement. On 
the other hand, fairness and tr ansparency are rated higher in public procurement.  
The results below were based on a survey  of about 1,500 (out of the 1,800 firms in 
the sample) who reported having experience with private sector procurement (i.e. sell side). 
 
EN 200   EN Figure 41): Perceived timing and cost of above EU threshold public procurement compared with private 
procurement – survey among firms 
Open Restricted Negotiated
Much less than private sector Less No difference More Much more than private secto r8% 
4% 
9% 
15% 
12% 13% 
17% 
16% 
16% 
23% 
18% 27% 
27% 
26% 
17% 
23% 
24% 
22% 
18% 
17% 
11% 32% 
30% 
14% 
21% 
13% 
9% 
10% 
8% 
6% 
6% 
0 % 25 % 50 % 75 % 100 %Time process
Cost process
Transparency 
Risk of complaints
Price weight
Fairness
No. of bids
Quality weight
Efficiency
Bids from abroad5% 
4% 
5% 
16% 
16% 16% 
19% 
17% 
19% 
29% 
15% 27% 
26% 
24% 
19% 
26% 
26% 
24% 
16% 
18% 
16% 31% 
32% 
11% 
11% 
12% 
8% 
11% 
8% 
7% 
3% 
0 % 25 % 50 % 75 % 100 %s
s
y
s
t
s
s
t
y
d4% 
2% 
5% 
10% 
6% 16% 
19% 
13% 
24% 
30% 
16% 26% 
22% 
19% 
16% 
26% 
24% 
15% 
11% 
16% 
9% 24% 
25% 
10% 
14% 
7% 
7% 
7% 
4% 
9% 
6% 
0 % 25 % 50 % 75 % 100 %s
ss
y 
s
ht
s
s
ht
y
d
 
Source: PwC study 
8.8.3.  Litigation costs 
According to a recent study, about 350’000 person days is spent annually across 
Europe on managing complaints and litigation for government authorities199. 
Multiplying the above estimate by average daily labour costs200 provided by 
Eurostat, we arrive at around € 54 million of cost per year.  
It is important to notice, that these costs refer to the CAE only. Much higher costs 
can be incurred by firms, which frequently seek legal assistance and finally make a decision not to lodge a claim against CAE (as they take into account reputational 
risks linked to such action). These costs ar e very difficult to track as they do not 
appear in statistics on number of legal cas es opened / closed, etc. To estimate such 
cost we base our calculation on input data of an average number of bids submitted per invitation to tende r (i.e. typically 5.4 bids). Apar t from the winner, we assume 
that the remaining 4 plus unsuccessful bi dders may seek legal advice to decide 
whether or not the award decision is worth contesting. If we assume the worst-case 
scenario i.e. that in all CANs
201 unsuccessful bidders202 did so spending one person 
day on legal assistance, we woul d arrive at another €85 million203 of costs for legal 
advice (for firms). The above estimate is of  course rough, as not all firms who lost a 
procurement contract would seek legal ad vice. On the other hand, we can suspect 
that for those firms which do so, costs incu rred may be higher than €154 (i.e. take 
more time than one person day) and that labour costs in legal counselling are much 
higher than an average for the whole economy. 
                                                 
199 Source: PwC study, page 80. 
200 Eurostat, Monthly labour costs in 2005 (based on table "tps00174"): €2,266, divided by 20 working 
days, plus 9% inflation (2005-2009) and 25% uplift, equals €154 of daily labour cost.  
201 138'000 CANs in 2009. 
202 An average of 5.4 bidders per cont ract means that at least 4 of them were unsuccessful and might have 
sought legal advice.  
203 138'000 contracts * 4 unsuccessful bidders * € 154 of average labour cost per day. 
 
EN 201   EN To summarise, if public procurement regime was simplified with regards to rules 
defining its scope, up to around € 140 million of litigation and legal advice costs 
could be saved per year by both CAEs and firms (see: Figure 42). 
Figure 42): Estimated annual costs of litigation and/or legal advice in million € 
54.05
85.25CAEs
firms
 
Source: DG MARKT estimates 
As far as public authorities are concerned, diminished costs of legal assistance 
associated with avoiding (perceived) lega l uncertainty, reducing risk and dealing 
with legal challenges could in prin ciple have certai n positive budgetary 
consequences (i.e. generate budgetary savings).  
8.8.4.  Costs of procedures  
The introduction of unlimited right to use the negotiated procedure with publication 
of a CN could generate some savings in term s of cost-efficiency of procedures, as the 
negotiated procedure is globally cheaper than the open procedure (respectively € 
26'000, compared to € 27'200 per procedure, see: Figure 43  below). It is however 
necessary to underline that the global lower cost for th e negotiated procedure is 
driven by the fact that it attracts less competition204 (5.2 bids per tender is usually 
submitted in the negotiated procedure, comp ared to 6.4 bids per tender in the open 
procedure).  
                                                 
204 If the factors of the above multiplications were to be  analysed separately (i.e. costs of procedures for 
CEAs and costs for firms, without taking into account competition), one could point out that the negotiated procedure may actually be more expensive, as it has higher unit costs per participant: costs in 
the open procedure are € 5'100 for CAE and € 3'500 firms; costs in the negotiated procedure are € 5'800 
for CAE and € 3'900 firms. [reasons why we included competition]  
 
EN 202   EN Figure 43): Typical cost of competition 
Works
Supplies
Services
Open
Restricted
Negotiated
Frameworks
Total7,2
4,8
5,5
5,1
9,05,8
5,4
5,5Authorithy €('000)
5,33,1
3,8
3,5
6,13,9
3,2
3,8+(Firm € ('000) *Bids)
7,85,3
5,9
6,4
5,45,2
5,5
5,9=Total € per competition ('000)
48,221,3
27,9
27,2
41,726,0
23,0
27,9
 
Source: PwC, Ecorys, LE 
If we look at the global cal culation (knowing that the ne gotiated procedure typically 
attracts less bids), it seems that a genera l permission to use the negotiated procedure 
could generate savings in the total costs of procedures.  
8.8.5.  SMEs impacts 
As has been discussed above, the role of  SMEs in public procurement is very 
important. Throughout the course of this  Impact Assessment and the various 
supporting studies, care has been paid to iden tify issues of part icular importance to 
SMEs. In particular, a specific study wa s conducted in 2010 that focused on SMEs’ 
access to public procurement markets205. The GP consultation asked a number of 
questions addressing issues  affecting SMEs and star t-ups and responses were 
received from several SME organisations . Similarly the e-procurement GP asked 
"What further steps might be taken to improve the access of all interested parties, 
particularly SMEs, to e-Procurement systems? ". Two SME organisa tions replied, as 
did seven chambers of commerce whose me mbers would be likely to include SMEs. 
The Commission has made a clear commitme nt to support and promote the interests 
of SMEs. The importance of this policy and the desire to make sure that these objectives are met is echoed in the general objectives of public procurement policy, which set out to ensure a fair and level pl aying field, where markets are opened to all 
in a non-discriminatory manner. In addition, one of the operational objectives set to 
resolve issues of access clearly states the in tention to facilitate participation by SMEs 
in public procurement markets. The options proposed under ACC.LEGI.ENFORC and ACC.LEGI.FACILIT would promote di fferent ways of increasing SME access, 
whilst ACC.SOFT could consider co mplimentary guidance and training 
programmes, ensuring SMEs are "too led up" for any new changes.  
8.8.6.  Administrative burden 
Public procurement was identified as one of the 13 priority ar eas for consideration 
under the "EU project on baseline measurement and administrative costs". Using the Standard Cost Model (SCM) methodology, the administrative costs and burdens 
falling on economic operators as  a result of the Directives  were measured. The main 
findings are summarised in the box below. 
                                                
 
205 I.e. GHK study. 
 
EN 203   EN Main findings in the Public  Procurement Priority Area: 
1) On the basis of two Directives and one Regulation, a total of seven EU Information Obligations (IO) and 
Possibilities Stated in the EU Legal Acts were iden tified. Commission Regulation (EC) No 1564/2005 does 
not include Information Obligations. 
2) The seven EU IOs resulted in 194 national IOs (including 26 Possibilities stated in the EU Act and three 
Possibilities not stated in the EU Act) across the 27 MS. 
3) The total administrative cost of these seven IOs is estimated at a total of €234 million EU-wide.  
4) Of the €234 million of administrative cost, 92.35% (€216 million) have been classified as administrative 
burden. The remaining costs are considered to cover activ ities which can be classified as "business as usual". 
Source: Final report on public procurement baseline measurement  
This report noted that the most burde nsome IOs related to  the submission of 
documents related to selection and exclus ion criteria. Together these IOs accounted 
for €211.5 million (98%) of the administrative burden on firms.  
 
EN 204   EN 8.9. ANNEX 9 – Glossary 
ACPC (Advisory Committee for Public Contracts)  
Agreement, the : reference equivalent to the GPA (see below)  
A-type services : Categories of services (1-16) men tioned in annex II A of the Classic 
Directive and annex XVII A of the Utilities Directive, for which th e full set of rules stemming 
from the Directives apply; the remaining se rvices are referred to as B-type services 
B-type services: Categories of services (17-27) mentioned in annex II B of the Classic 
Directive and annex XVII B of the Utilities Direc tive, for which the Directives provide only a 
limited set of obligations (i.e. observance of th e provisions on technica l specifications and an 
obligation to inform the Comm ission of contract awards) 
CAE (Contracting Authorities and Entities)  
CAN (Contract Award Notice)  
Classic Directive, the : Directive 2004/18/EC of the Europ ean Parliament and of the Council 
of 31 March 2004 on the coor dination of procedures for the aw ard of public works contracts, 
public supply contracts and public service contracts, OJ L 134, 30.4.2004, p. 114 
CN (Contract Notice)  
CPB (Central Purchasing Body): CPBs are contra cting authorities wh ich either act as 
wholesalers (i.e. buy, stock and sell on to other c ontracting authorities) or as intermediaries 
(i.e. award contracts or conclude framework agr eements that will be used by other contracting 
authorities) 
CPV (Common Procurement Vocabulary): CPV estab lishes a single classification system for 
public procurement aimed at standardising the re ferences used by contracting authorities and 
entities to describe the subj ect of procurement contracts 
Defence Directive, the:  Directive 2009/81/EC of the Europe an 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 contra cts by contracting authorities or  entities in the fields of 
defence and security, and amending Dir ectives 2004/17/EC and 2004/18/EC, OJ L 216, 
20.8.2009, p. 76 
Deutsche Bank Research : Deutsche Bank Research paper published in February 2011 
available at: http://www.dbres earch.de/PROD/DBR_INTERNET_DE-
PROD/PROD0000000000269867.PDF  
Directives, the:  in this context, the legislation referred to is 2004/ 17/EC and 2004/18/EC 
ECJ (European Court of Justice)  
E-procurement:  a public procurement pro cedure initiated, conducted and/or concluded using 
electronic means, i.e. using electronic equipmen t for the processing an d storage of data, in 
particular through the Interne 
 
EN 205   EN E-procurement GP (Green Paper) : Green Paper on expanding the use of e-procurement in 
the EU,  Brussels, 18.10.2010, COM(2010) 571 final, SEC(2010) 1214, documents available 
at: http://ec.europa.eu/internal_market/publicprocurement/e-procurement/consultations/index_en.htm 
e-procurement Report , the: Commission Staff Working Document, Evaluation of the 2004 
Action Plan for e-procurement, Brussels , 18.10.2010 SEC(2010) 1214 final, available at: 
http://ec.europa.eu/internal _market/consultations/docs/2010 /e-procurement/evaluation-
report_en.pdf  
e-Certis:  the European Commission information sy stem that helps identifying different 
certificates and attestations fr equently requested in procurem ent procedures across the 27 MS, 
two Candidate Countries (Turkey and Croatia ) and the three EEA countries (Iceland, 
Liechtenstein and Norway). e-Certis is a fr ee, on-line information tool providing companies 
and contracting authorities wi th information on the different documents required when 
tendering for a public contract in another countr y. At present, e-Certis only covers the most 
frequently requested documents and the data pr ovided is maintained on  a voluntary basis by 
MS. For more information see: http://ec.eu ropa.eu/internal_market/publicprocurement/e-
procurement/e-certis/index_en.htm  
EMAT (Economically Most Advantag eous Tender): one of the contract award criteria on 
which the award of a (public) contract shall be based  
EP Report : Report of the European Parliament Committee on the Internal Market and 
Consumer Protection on the new developments in public procurement (2009/2175(INI)), A7-0151/2010, available at: http://www.europa rl.europa.eu/sides/getDoc.do?pubRef=-
//EP//NONSGML+REPORT+A7-2010-0151+0+DOC+PDF+V0//EN  
Eurobarometer:  large surveys based on in-depth them atic studies carried  out for various 
services of the European Commission or other EU Institutions 
Europe 2020: Communication from the Commission on smart sustainable and inclusive 
growth, COM(2010)2020 of 03.03.2010; report and related initiatives available at: 
http://ec.europa.eu/ europe2020/index_en.htm  
Evaluation Report, the : Report summarising the 2011 evaluation of public procurement, 
available at: 
http://ec.europa.eu/internal_market/publicpr ocurement/docs/modernising_rules/evaluation-
report_en.pdf  
FRA / Framework agreement : framework agreements are defined as agreements between 
one or more CAE and one or more firms, with  the purpose to establish the terms governing 
contracts to be awarded during a given period, in particular with regard to price and, where 
appropriate, the quantity envisaged 
GDP  (Gross Domestic Product): a measure of a c ountry's overall economic output. It is the 
market value of all final goods and services made  within the borders of a country in a year 
GP (Green Paper): Green Paper on the modern isation of EU public procurement policy, 
towards a mote efficient European Proc urement Market, Brussels, 27.1.2011, COM(2011)15, 
report available at: 
 
EN 206   EN http://ec.europa.eu/internal_market/consulta tions/docs/2011/public_procurement/synthesis_do
cument_en.pdf  
GPA  (Government Procurement Agreement): The GPA is the main international agreement 
relating to public procurement.  The current version, which was negotiated in th e in parallel 
with the Uruguay Round in 1994 and entered into force on 1 January 1996, The GPA establishes a set of  rules which (a) govern the procuremen t activities of its  Parties and (b) 
enable the Agreement to function as an international one 
GPP (Green Public Procurement) 
IM (Internal Market) 
IO (Information Obligation): term used to estimate administrative burden  
ITT (Invitation to tender): also known as a Contract Notice (CN) 
LCC (life-cycle costing ) 
Mario Monti's report: A New Strategy for the Single Market  - at the service of Europe's 
economy and society, Report to the Presiden t of the European Commission José Manuel 
Barroso by Mario Monti, 9 May 2010, available at: http://ec.europa.eu/bepa/ pdf/monti_report_final_10_05_2010_en.pdf
 
MS (Member States): the 27 Member States of the European Union  
OJ/TED  (Tenders Electronic Daily): TED is the online version of the 'Supplement to the 
Official Journal of the European Union', dedicated to European public procurement 
PIN (Prior Information Notice)  
PP (Public procurement): A procedure initiate d by a contracting authority or contracting 
entity with a view of acquiring goods, services  or works for the fulfilment of its tasks 
Remedies Directive, the : Directive 2007/66/EC of the Eur opean Parliament and of the 
Council of 11 December 2007 amending Council Directives 89/665/EEC and 92/13/EEC with 
regard to improving the effectiv eness of review procedures c oncerning the award of public 
contracts, OJ L 335, 20.12.2007, p. 31 
Utilities Directive, the : Directive 2004/17/EC of the Europe an Parliament and of the Council 
of 31 March 2004 coordinating the pr ocurement procedures of entit ies operating in the water, 
energy, transport and postal serv ices sectors, OJ L 134, 30.4.2004, p. 1 
SMA  (Single Market Act): Communication fr om the Commission COM /2011/0206 final –
Single Market Act – Twelve levers to boost gr owth and strengthen confidence " Working 
together to create new growth", 13.04.2011, repor t and related initiatives available at: 
http://ec.europa.eu/intern al_market/smact/index_en.htm  
SME  (Small and Medium-sized Enterprises): the category of micro, sma ll and medium-sized 
enterprises is made up of enterprises whic h employ fewer than 250 persons and have an 
annual turnover not exceeding 50 million euro, a nd/or an annual balance sheet total not 
exceeding 43 million EUR  
 
EN 207   EN TFEU  (The Treaty on the Functioning of the European Union)