WRITTEN QUESTION E-3052/97 by Amedeo Amadeo (NI) to the Commission (2 October 1997)

Subject: Green paper on public procurement

The Commission has published a Green Paper on public procurement in the European Union: Exploring the way forward (COM(96) 583 final). Will the Commission ensure that, in awarding public contracts, contracting

authorities give full consideration to the quality of the bids submitted with regard to economic benefits, of which price is only one element? There are also other factors which may be taken into consideration such as quality, compliance with deadlines, environmental protection, functionality, security, etc. In other words, the overall cost of the operations for their full duration.

A European policy on public works contracts should emphasize the concept of the 'best bidder', by laying down precise rules to be included by the contracting authorities in the specifications so as to encourage them to give preference to the 'economically most viable bid' as opposed to the 'lowest bid'.

Answer given by Mr Monti on behalf of the Commission (18 November 1997)

The Honourable Member considers that European public procurement policy should foster the concept of 'best offer', by establishing rules aimed at inducing contracting authorities to give a priority to 'the most advantageous tender' as opposed to 'the lowest tender'.

Following the adoption of the green paper of the Commission on public procurement on 27 November 1996, a wide debate has opened with all interested parties on differing aspects of European public procurement policy. Some contributions raise this problem. Following the Parliament's adoption of a formal position on the green paper the consultation phase will end and the Commission will adopt an action oriented communication on public procurement policy and take a position on the main issues raised in the debate.

The public procurement directives allow the award of contracts to take place either solely based on price or on the criterion of the most advantageous tender. Various criteria of a technical or economic nature can be taken into account, provided they are not discriminatory. The opinion of the Commission is that both criteria have their role to play. For some awards, the price alone would appear to be the best criterion, such as for simple and identifiable products. However, the price alone would indeed appear to be inappropriate for complex procurement. The Commission is aware that as far as construction contracts are concerned, there is a tendency for contracting entities to base themselves solely on price in order to profit from the current situation of very high competition in this sector. Despite the fact that contracting entities announce the award of the contract based on the most advantageous offer, in practice they apply only price, since the evaluation is then easier. Such a practice constitutes an infringement of the rules.

Nevertheless, the Commission does not consider that the wording of the rules on award criteria need to be changed. Such rules should allow contracting authorities a wide margin of freedom in the choice of purchasing criteria (provided they are economic criteria) and in particular to choose to award contracts on simple price considerations. In any event, in information and training initiatives that the Commission has the intention of launching, it would be worthwhile to clarify that it is not obligatory to award contracts solely or primarily based on price considerations, and to encourage contracting entities to choose the most appropriate criteria according to the object of the contract.

Finally, it should be recalled that environmental protection, which is mentioned as a quality criterion, is not, according to the present framework, adapted to define the economically most advantageous offer. In this respect, the Commission would draw the Honourable Member's attention to the Commission's detailed position on the possibilities offered by the present framework of pursuing environmental aims on public procurement procedures laid down on points 5.45 to 5.53 of the green paper.