EUROPEAN COMMISSION Brussels, 20.5.2021 COM(2021) 245 final REPORT FROM THE COMMISSION Implementation and best practices of national procurement policies in the Internal Market



Table of Contents 1.Introduction 2.Summary of the Member States monitoring reports 2.1.Key quantitative indicators – the number and value of procurement 2.2.Most frequent sources of wrong application or of legal uncertainty 2.3.Fraud, corruption, conflict of interest and serious irregularities 2.4.SMEs participation 2.5.Practical implementation of national strategic procurement 2.5.1.Green public procurement 2.5.2.Socially responsible public procurement 2.5.3.Innovation public procurement 3.General conclusions



1.Introduction This document reflects the contributions that Member States submitted during the first reporting and monitoring exercise under Articles 83 and 85 of Directive 2014/24/EU on public procurement, Article 45 of Directive 2014/23/EU on the award of concession contracts, as well as Articles 99 and 101 of Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sector (hereinafter ‘the reporting obligation’ or ‘the reporting exercise’). Due to the delayed transposition of the Directives, the first implementation of the reporting obligation took place in 2018. Consequently, the reports covered in principle the period between the 1 January 2017 and 31 December 2017 (even if a Member State transposed the Directives after the 1 January 2017) depending on data availability. In the context of the above obligations, the Commission received 27 reports: 26 from EU Member States and one from Norway, as member of the European Economic Area (EEA). The original reports as submitted by Member States are available at the following address:

https://ec.europa.eu/growth/single-market/public-procurement/country-reports_en . 2.Summary of the Member States monitoring reports As a general observation, qualitative information prevailed over quantitative data in all the reports received. However, the incompleteness of the latter limited the possibilities for a comprehensive aggregation and/or comparability of the available data at the EU level. 2.1.Key quantitative indicators – the number and value of procurement The quantitative indicators are indispensable to define the procurement market. Member States mentioned various problems encountered while conducting this reporting exercise, e.g. partial or missing input data or lack of such data etc. The task itself seems to have been demanding and resource intensive to the extent that some Member States decided to seek supplementary assistance in this respect. Bearing in mind the above issues encountered when compiling the data, selected key indicators received from Member States during the first reporting exercise have been summarised in Table 1 (data in the table refer to calls for competition, unless specified otherwise). Comments: Denmark – below threshold value only concerns tenders with cross-border interest, France - data for 2016 and above 90 000 EUR only, unless voluntary reporting, Hungary – values refer to awarded contracts, Ireland – data refer to contract award notices, Italy – approximate division into above and below threshold procurement in goods and services, based on contact value of less than 150 000 EUR, Luxembourg - the number of procedures refers to the awarded contracts, Malta - data refer to awarded contracts, the Netherlands – data for 2015, Romania - reporting period from 1.01.2017 to 28.02.2018, Slovakia – for below EU threshold procurement data refer to the number of awarded contracts and estimated contract value, Spain – data collection has been closed on 15 December.2017, Sweden – data for 2016. As can be noted in Table 1, the submitted information shows several inconsistencies, ranging from information gaps to compound reporting (e.g. above and below threshold procurement are reported together), or reporting on different stages of public procurement process (e.g. data referring to calls for tender versus awarded contracts), and different periods. Processing of such input becomes problematic when the above is coupled with issues such as doubts about comparability between the units of measure or differences in coverage (i.e. monitoring of below EU threshold procurement depends of the level of national thresholds, which vary significantly). As a result, the information received from Member States was presented “as is” including placeholders for missing input (even if the latter is partially due to voluntary nature of data collection) and no EU-level aggregates have been calculated on the basis of the information received. In several instances, when data was reported separately for below and above the thresholds, the national figures for above threshold procurement differed from data collected via TED (Tenders Electronic Daily). This may be due to a number of factors, such as insufficient integration of data transmission and/or publication between the national systems and TED, and it shall be further investigated. Examples of such discrepancies are provided in Table 2. 2017 (2016 SE) Country CNs published in TED vs. National reporting CAs published in TED vs. National reporting FI 87% 93% HU 84% 108% SE 89% 107% Figure 1 shows the share of below and above EU threshold procurement for selected Member States, which also provided the value of public procurement above EU threshold. The graph shows divergent patterns among the selected Member States, which could be explained by differences in levels of national thresholds, as well as various methodologies for data collection. Interestingly, in some countries (the Netherlands and Portugal), below threshold procurement is more important than above threshold procurement. This highlights the importance of national procurement markets, as well as the importance of data collection and monitoring beyond TED (an exclusive task of Member States). 2.2. Most frequent sources of wrong application or of legal uncertainty This section focuses on the most frequent sources of wrong application or of legal uncertainty, including possible structural or recurring problems in the application of the public procurement rules, as reported by Member States. The most frequently identified general problems were the following: ·insufficient knowledge of the rules by practitioners, especially rules not clarified by case-law;

·inadequate staffing (required quality and variety of profiles), as well as staff retention, especially at local level; ·lack of procurement skills and insufficient knowledge of the market; ·pressure to ensure a specific result of the procedure by the political hierarchy; ·pressure to ensure results quickly resulting in shortened time for proper planning and conduct of the procedure; ·lack of central purchasing units or insufficient support available to small and understaffed authorities. Concerning the concrete application of legal provisions by the national contracting authorities, about a quarter of the Member States mentioned the following issues: ·calculation of the value of the procurement – Article 5: artificial splitting by the contracting authority, either when used purposefully in an illegal context, or through wrong interpretation which could lead to inadvertent artificial splitting; ·exclusion grounds – Article 57: the use of exclusion grounds by the contracting authority for the purpose of favouritism or overly liberal interpretation leading to their insufficiently strict enforcement; ·award criteria – Article 67: difficulty for the contracting authority to formulate proper and meaningful quality criteria, including those involving strategic public procurement (green, socially responsible and innovative) and establishing a relevant link with the subject matter of the procurement. Finally, despite the limited number of answers, the following patterns were observed frequently: ·preference by contracting authorities to use lowest price as an award criterion, seen as simpler and more objective; best price-quality ratio is used in limited cases, due to fears of risks in compliance audits; ·no or little prior market research resulting in non-realistic or outdated specifications; ·use of shortest possible deadlines for submitting tenders or requests to participate, and short deadlines for contract execution; ·imposing too many selection criteria or not imposing any at all. 2.3.Fraud, corruption, conflict of interest and serious irregularities Many Member States outlined their legislative solutions, the institutional set-up and the “soft law” measures taken, with certain statistics on the functioning of the system. In the majority of cases, the general anticorruption and anti-collusion legislation and institutions predate the Directives. However, the EU rules usually provided the impetus to focus specifically on public procurement-related issues, if not already covered. Interesting specific obligations and rights mentioned are, for instance: ·obligation to publish all documents, including information on the economic operators; ·obligation of competition authorities to conduct tests and simulations of the market, in order to detect collusive behaviour; ·obligation of economic operators to provide data on their ownership structure;

·mandatory appointments of integrity officials and establishment of internal audit departments in contracting authorities. The “soft law” measures indicated in the reports were the most numerous and displayed the greatest coherence across Member States. They include national strategies against corruption, manuals and guidance notes (especially on methods to conduct market research, negotiations or to detect collusive behaviour), professionalisation, education and training, or codes of conduct for civil servants (when not set out in legislation) and sometimes also for economic operators. The focus devoted to soft measures shows that Member States are aware that activity in the field of integrity and anticorruption requires not just legal barriers, but also a positive influence on administrative culture, on personal behaviour and values. Most of the abovementioned measures apply mutatis mutandis to conflict of interest. There are some specific national measures with respect to conflict of interests: ·around one quarter of Member States report more detailed rules on the definition of conflict of interests than the one provided by the Directives. In general, these pertain to clarifying family and personal links that fall admittedly in the scope of the notion of interest, as well as rules on shareholding in private companies; ·many Member States indicate declarations on the absence of conflict of interests, impartiality and objectivity, as a measure used at national level. In some cases, there is a general obligation to declare any possible conflict of interest, with the obligation to publish that information. In general, penalties for breach of such rules are in place; ·other measures included: oa ban on simultaneous participation in multiple technical and/or evaluation committees dealing with the same procurement procedure; ostrict provisions that contracts concluded contrary to the rules regulating conflict of interests are null and void; othe obligation for civil servants controlling public procurement to submit regular declarations of assets. The reports also confirm that Member States are currently pursuing collusion prevention and detection policies largely inspired by the OECD guidelines. Measures to fight collusion that are common in Member States include: elaborating and disseminating guidance on detection, awareness-raising and training, direct helplines for reporting alleged cases, leniency programmes for operators that come forward with information, criminal law sanctions for colluders, etc. It appears that, in most Member States, national competition authorities are primarily responsible for carrying out such policies. The role of central procurement authorities in this area is not developed. The importance of establishing and/or maintaining clear communication and cooperation channels between competition authorities, central procurement authorities and contracting authorities is generally acknowledged as a major element of the policy to fight collusion. The reports show that developing and applying means for the quantitative assessment of collusion risks in award procedures, mostly in the form of risk indicators, remains a challenge. 2.4.SMEs participation The diversity in reporting and data shared makes it difficult to compare the data from different countries on SME participation. Around three quarters of Member States have provided contributions on the quantitative reporting. However, only a limited number of Member States have explicitly mentioned challenges encountered by SMEs in public procurement. These include in particular the administrative burden, the lack of knowledge of the SMEs product market, or the lack of dialogue between contracting authorities and SMEs. To address them, most of the measures reported are those required by the EU Directives on public procurement (division of contracts into lots, turnover cap, etc.). Several Member States report on complementary measures such as helpdesks and other support structures, introducing e-procurement modules even for below threshold procurement. Most of the challenges encountered by SMEs relate to participation in public procurement in general, while some reports also revealed certain challenges that are more related to national specificities. Certain Member States have presented additional measures to the ones included in the Directives to improve SMEs participation in public procurement. Some interesting practices can be highlighted: ·the Dutch government encouraged SMEs to work with contracting authorities to identify constraints and developed concrete actions to improve public procurement practices, which the government presented in February 2018 ; ·the Italian government initiated Supplier Training Desks that provided training and assistance to local enterprises, and in particular micro, small and medium enterprises on the use of electronic procurement tools. Some Member States, which had difficulties in providing data, indicated that they intend to put in place data collection systems in the future.

2.5.Practical implementation of national strategic procurement Strategic public procurement includes green, socially responsible and innovative procurement. The objective is to increase the value added and impact of the procedure and of the public expenditure, thereby contributing to the effective implementation of economic, social and environmental policy objectives at EU, national, regional and/or local levels) and to an inclusive recovery, as well as promoting the twin transition and strengthening social resilience. 2.5.1.Green public procurement Green Public Procurement (hereinafter 'GPP') is defined as "a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured" . Member States reported on some main challenges they encountered in the implementation of GPP, such as: ·the difficulty to foster GPP practices due to the lack of legal obligation for contracting authorities to use environmental criteria in tendering procedures; ·the lack of legal certainty on the correct interpretation of the requirement for ‘link to the subject matter of the contract’ and the general fear of litigation; ·the lack of data on the effectiveness and economic benefits of applying GPP criteria and the difficulty to monitor their application; ·the lack of specific knowledge and skills of the public servants engaged in tendering procedures, the fact that GPP may be perceived as an obstacle to competition, specifically restricting SME participation in public tendering. Ambiguity with respect to the definition of GPP exists in many Member States, as they did not clearly define GPP in their domestic legal order, while the rest have often opted for the European Commission’s definition mentioned above. It is important to mention that measures to promote the procurement of products, buildings and services with high energy efficiency performance are made mandatory by the Energy Efficiency Directive 2012/27/EU, but they haven’t been specifically assessed in this report (neither it is required to report on them under the Directive 2012/27/EU). Member States have implemented GPP to different degrees. The main factor is whether there is a legal obligation for contracting authorities to include environmental considerations in their procurement procedures. Approximately, one third of the Member States have introduced a legal obligation for specific sectors, product groups, or if the value of the contract is above specified thresholds. The others have opted for the voluntary inclusion of GPP. Many Member States reported the absence of data on the use of GPP. In addition, while many Member States have included guidance on how to incorporate green criteria in procurement procedures, only some of them have explained how to assess those criteria in the evaluation stages. Good practice examples include: · including mandatory GPP criteria or targets in national sectorial legislation; ·create a library with GPP criteria for different products and services, which is freely available and includes different criteria in terms of degree of environmental focus; ·impose mandatory annual reporting on the environmental aspects in procurement procedures to ensure transparency and enable easy data collection; ·provide training on GPP to both contracting authorities and businesses; ·engage the environmental protection agencies (or another body performing similar activities) in the implementation of GPP. 2.5.2.Socially responsible public procurement Socially responsible public procurement (hereinafter 'SRPP') is defined as procurement that takes into account one or several social considerations for advancing social objectives. SRPP can cover a wide spectrum of social considerations, such as employment opportunities, decent work conditions and compliance with social and labour rights, social inclusion, equal opportunities and accessibility.

In general, the quality of information provided was insufficient for a clear and comprehensive assessment of this aspect of public procurement policy across the Member States. National authorities engaged in preparing the reports sometimes included information on labour law and social provisions, without providing a clear link to the public procurement legislation. Additionally, the majority of Member States provided hardly any data on SRPP. The following key issues were mentioned by Member States concerning the implementation of social criteria in procurement: ·the lack of clear guidance about the correct implementation; ·difficulties in calculating social effects and life cycle costing; ·difficulties in connecting social considerations to the subject matter of a contract; ·absence of a generally accepted definition of SRPP. Approximately two-thirds of Member States have provisions in national law or strategies pertaining to the implementation of SRPP. Member States mentioning SRPP in national legislation have included precise criteria on the introduction of social considerations in the procurement process as technical specifications, exclusion grounds, award criteria and contract performance conditions. This paves the way towards greater legal certainty about the use of SRPP and better guidance for contracting authorities when engaging in public expenditure. Some Member States even went a step further and incorporated proper assessment mechanisms in national law, guidance or assigned a body to assist contracting authorities in implementing SRPP and evaluate the social impact of tenders. In this context, some interesting practices can be highlighted: ·drawing up of a “Collection of good practices on social public procurement”; ·establishment of a Working Group on Social Aspects of Public Procurement to analyse social aspects that may be taken into account by contracting authorities in the different stages of procurement, also preparing and publishing a detailed guide; ·setting-up of an inter-ministerial committee for the inclusion of social criteria in public procurement, with the objective of ensuring the coordination of the integration of social criteria in public procurement and in the implementation of reserved contracts to certain entities in the social field; ·drawing up of a code of conduct for suppliers to ensure that procured goods and services are supplied according to sustainable and socially responsible conditions. 2.5.3.Innovation public procurement The quality of the reporting on the public procurement of innovation (hereinafter ‘IPP’) varies considerably among Member States. Because of lack of data, several Member States have not provided any information on measures taken to support IPP. The most common obstacles encountered by Member States often related to resources and administrative capacity necessary to implement IPP, for example: ·the lack of awareness; ·insufficient methodological competence of public buyers; ·low risk tolerance in public spending; ·scarce or lack of funding dedicated to innovation in public bodies; ·resistance to change stemming from the organisational culture.