WRITTEN QUESTION E-1549/97 by Niels Kofoed (ELDR) to the Commission (5 May 1997)

Subject: Public services and procurement in Objective 5B areas

Will the Commission consider investigating the possibility of changing the contract directives in force in such a way that services - e.g. transport - and goods can be procured without further weakening provincial areas and island communities in Objective 5B areas, since serviceand procurement contracts are often won by large undertakings located outside the areas concerned and in many cases smaller local undertakings completely lose their trading base?

Will it for instance consider proposing that the generally applicable threshold values for tendering obligations for procurement and service contracts be increased considerably - e.g. doubled or trebled - in Objective 5B areas?

Will it consider putting forward a proposal making it lawful for contracting authorities covered by the contract directives to decide that award procedures be broken down so that tenderers may obtain only one or a limited number of the subcontracts covered by one contract - e.g. all bus services in a district or region in an Objective 5B area?

Does it have other proposals for amendments to the contract directives to prevent the tendering rules from contributing to depopulation of Objective 5B areas by weakening the basis of small and medium-sized undertakings especially in island communities?

If not, why not?

Answer given by Mr Monti on behalf of the Commission (23 June 1997)

It should, first of all, be stressed that the current Community rules on public procurement do not prevent contracting authorities from applying a 'regional preference' scheme when awarding contracts with an estimated value below the thresholds in the public procurement directives, provided, however, that such preference is given without discrimination to all Community companies and companies from countries having adhered to the European Economic Area Agreement (EEA) in the same situation. In the case of contracts below the thresholds, it would thus be possible, for instance, to accord a preference to companies established in an objective 5 B area, provided that such preference is without discrimination to any company established in an objective 5 B area anywhere in the Community or, regarding companies from EEA-countries, established in regions presenting similar characteristics.

In the case of contracts with an estimated value above the thresholds, such preferences are not compatible with the currently applicable rules on public procurement.

There are no plans to raise the public procurement thresholds, whether in general or in respect of objective 5 B regions. To do so would be contrary to the Community's international obligations in the field of public procurement.

The current Community rules on public procurement already allow contracting authorities to divide any contract into lots and to award it lot by lot, provided always that the thresholds are calculated in function of the total, aggregate value of the lots and that the provisions of the directives are applied to all the lots. Thus, nothing in the directives prevents a contracting authority from deciding that, for instance, bus transport in a country be divided into a number of different lots - for example line by line - and to provide that the participants may not tender for more than one or a limited number of lots. Furthermore, Article 7 paragraph 4 of Council Directive 92/50/EEC relating to the coordination of procedures for the award of public service contracts ((OJ L 209, 24.7.1992. )) and Article 6 paragraph 3 of Council Directive 93/37/EEC concerning the coordination of procedures for the award of public works contracts ((OJ L 199, 9.8.1993. )) provide that, under certain conditions, lots with an estimated value net of value added tax of less than, respectively, 80 000 and 1 000 000 ecus may be awarded without application of the directives.

Finally, regarding the Commission's ideas and initiatives in favour of small and medium enterprises (SMEs) the Honourable Member may find it useful to refer to chapter 5, points 5.1 to 5.16 of its green paper 'Public procurement in the European Union: exploring the way forward' ((COM(96) 583. )).