GREEN PAPER on the modernisation of EU public procurement policy Towards a more efficient European Procurement Market
Date: 2011-01-27
Institutions: European Commission
Subjects: administrative check, award of contract, public contract, services contract, supplies contract, works contract

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EUROPEAN COMMISSION 

Brussels, 27.1.2011 
COM(2011) 15 final 

GREEN PAPER 

on the modernisation of EU public procurement policy 
Towards a more efficient European Procurement Market 

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TABLE OF CONTENTS 

What are public procurement rules about?................................................................... 6 

Purchasing activities..................................................................................................... 6 

Public contracts ............................................................................................................ 7 

Public purchasers ....................................................................................................... 10 

Improve the toolbox for contracting authorities......................................................... 12 

Modernise procedures ................................................................................................ 13 

Specific instruments for small contracting authorities............................................... 19 

Public-public cooperation .......................................................................................... 21 

Appropriate tools for aggregation of demand / Joint procurement ............................ 23 

Address concerns relating to contract execution........................................................ 24 

A more accessible European procurement market..................................................... 27 

Better access for SMEs and Start-ups ........................................................................ 27 

Ensuring fair and effective competition..................................................................... 30 

Procurement in the case of non-existent competition/exclusive rights...................... 32 

Strategic use of public procurement in response to new challenges.......................... 33 

"How to buy" in order to achieve the Europe 2020 objectives .................................. 35 

"What to buy" in support of Europe 2020 policy objectives ..................................... 41 

Innovation .................................................................................................................. 44 

Social services............................................................................................................ 47 

Ensuring sound procedures ........................................................................................ 48 

Preventing conflicts of interest................................................................................... 49 

Fighting favouritism and corruption .......................................................................... 50 

Exclusion of "unsound" bidders................................................................................. 51 

Avoiding unfair advantages ....................................................................................... 53 

Access of third country suppliers to the EU market .................................................. 53 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

6. 

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GREEN PAPER 

on the modernisation of EU public procurement policy 
Towards a more efficient European Procurement Market 

The  Europe  2020  strategy  for  smart,  sustainable  and  inclusive  growth1  sets  out  a  vision  of 
Europe's  competitive  social  market  economy  over  the  next  decade  that  rests  on  three 
interlocking and mutually reinforcing priorities: developing an economy based on knowledge 
and  innovation;  promoting  a  low-carbon,  resource-efficient  and  competitive  economy;  and 
fostering a high-employment economy delivering social and territorial cohesion. 

Public procurement plays a key role in the Europe 2020 strategy as one of the market-based 
instruments  that  should  be  used  to  achieve  these  objectives.  More  specifically,  the  Europe 
2020 strategy calls on public procurement to: 

improve  framework  conditions  for  business  to  innovate,  making  full  use  of  demand 

° 
side policy2,  

support  the  shift  towards  a  resource  efficient  and  low-carbon  economy,  e.g.  by 

° 
encouraging wider use of green public procurement, and  

° 

improve the business environment, especially for innovative SMEs. 

The Europe 2020 strategy also stresses that public procurement policy must ensure the most 
efficient  use  of  public  funds  and  that  procurement  markets  must  be  kept  open  EU  wide. 
Obtaining  optimal  procurement  outcomes  through  efficient  procedures  is  of  crucial 
importance  in  the  context  of  the  severe  budgetary  constraints  and  economic  difficulties  in 
many EU Member States. In the face of these challenges, there is a greater need than ever for 
a functioning and efficient European Procurement Market that can deliver on these ambitious 
goals.  

Many stakeholders have voiced demands for a review of the EU public procurement system to 
increase  its  efficiency  and  effectiveness.  The  Commission  has  therefore  announced  in  the 
Single  Market  Act3  that  it  will  conduct  wide  consultations  in  order  to  make  legislative 
proposals by early 2012 at the latest, with a view to simplifying and updating the European 
public procurement legislation so as to make the award of contracts more flexible and enable 
public contracts to be put to better use in support of other policies. 

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See Communication from the Commission of 3 March 2010 - COM(2010) 2020. 
This is also taken up by the Commission Communication "Innovation Union" - SEC(2010) 1161 -, one 
of  the  Europe  2020  flagship  initiatives,  which  addresses  the  strategic  use  of  public  procurement  to 
promote  research  and  innovation.  It  calls  on  Member  States  to  set  aside  a  part  of  their  procurement 
budgets  for  research  and  innovation  and  informs  that  the  Commission  will  provide  guidance  and 
support mechanisms for contracting authorities. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  Economic  and 
Social  Committee  and  the  Committee  of  the  Regions:  Towards  a  Single  Market  Act  –  For  a  highly 
competitive social market economy of 27 October 2010 - COM(2010) 608. 

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The current generation of public procurement Directives, namely Directives 2004/17/EC4 and 
2004/18/EC5, are the latest step in a long evolution that started in 1971 with the adoption of 
Directive  71/305/EEC6.  By  guaranteeing  transparent  and  non-discriminatory  procedures, 
these Directives principally aim to ensure that economic operators benefit fully from the basic 
freedoms in the field of public procurement. The current Directives also mention a number of 
objectives relating to the integration of other policies in this framework, such as protection of 
the environment and social standards7 or the fight against corruption8.  

Given the key role of public procurement in coping with today’s challenges, the existing tools 
and  methods  should  be  modernised  in  order  to  make  them  better  suited  to  deal  with  the 
evolving political, social and economic context. Several complementary objectives are to be 
achieved: 

The first objective is to increase the efficiency of public spending. This includes on the one 
hand, the search for best possible procurement outcomes (best value for money). To reach this 
aim, it is vital to generate the strongest possible competition for public contracts awarded in 
the internal market. Bidders must be given the opportunity to compete on a level-playing field 
and distortions of competition must be avoided. At the same time, it is crucial to increase the 
efficiency  of  procurement  procedures  as  such:  Streamlined  procurement  procedures  with 
targeted  simplification  measures  meeting  the  specific  needs  of  small  contracting  authorities 
could help public procurers to achieve the best possible procurement outcomes for the least 
possible investment in terms of time and public money. More efficient procedures will benefit 
all economic operators and facilitate the participation of both SMEs and cross-border bidders. 
In  fact,  cross  border-participation  in  EU  public  procurement  procedures  remains  low9.  The 
comparison with the private sector, where cross-border trade is much higher, shows that there 
is  still  considerable  potential  to  be  tapped.  This  objective  of  more  efficient  public 
procurement  is  addressed  mainly  through  the  questions  in  parts  2  (improve  the  toolbox  for 
contracting authorities) and 3 (a more accessible European procurement market) of the Green 
Paper. 

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Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating 
the  procurement  procedures  of  entities  operating  in  the  water,  energy,  transport  and  postal  services 
sectors  (OJ  L  134,  30.4.2004,  p.  1).  Directive  as  last  amended  by  Commission  Regulation  (EC)  No 
1177/2009 of 30 November 2009 amending Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of the 
European Parliament and of the Council in respect of their application thresholds for the procedures for 
the award of contracts (OJ L 314 , 1.12.2009, p. 64). 
Directive  2004/18/EC  of  the  European  Parliament  and  of  the  Council  of  31  March  2004  on  the 
coordination of procedures for the award of public works contracts, public supply contracts and public 
service contracts (OJ L 134, 30.4.2004, p. 114). Directive as last amended by Commission Regulation 
(EC)  No  1177/2009.  The  following  text  will  take  as  its  starting  point  the  provisions  of  Directive 
2004/18/EC; however, unless explicitly stated otherwise, this can be understood as referring, – mutatis 
mutandis – to the corresponding provisions of Directive 2004/17/EC. The term “contracting authority” 
can  therefore  be  taken  as  referring  both  to  bodies  whose  procurement  is  subject  to  Directive 
2004/18/EC and to “contracting entities” under Directive 2004/17/EC. 
Directive  71/305/EEC  of  26  July  1971  concerning  the  coordination  of  procedures  for  the  award  of 
public works contracts (OJ No L 185, 16.8.1971, p. 5). 
See Recitals 5 and 46 of Directive 2004/18/EC and Recitals 12 and 55 of Directive 2004/17/EC. 
See Recital 43 of Directive 2004/18/EC and the corresponding Recital 40 of Directive 2004/17/EC. 
According to recent studies, only 1.6% of public contracts are awarded to operators from other Member 
States. Indirect cross-border participation – via corporate affiliates or partners situated in the Member 
State of the contracting authority – is more frequent. Nevertheless, even the rate of indirect cross-border 
awards remains relatively low (11%). 

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Another  complementary  objective  is  to  allow  procurers  to  make  better  use  of  public 
procurement  in  support  of  common  societal  goals:  These  include  protection  of  the 
environment, higher resource and energy efficiency and combating climate change, promoting 
innovation and social inclusion, and ensuring the best possible conditions for the provision of 
high quality public services. Pursuing this objective may also contribute to the first objective 
of more efficient public spending in the long term, for example by moving focus from lowest 
initial price to lowest life-cycle cost10. Issues relating to this objective are discussed in part 4 
of the Green Paper (strategic use of public procurement). 

Further  developing  EU  public  procurement  law  could  also  be  envisaged  to  tackle  important 
issues that are so far not sufficiently addressed, such as preventing and fighting corruption and 
favouritism  (part  5)  and  the  question  how  the  access  of  European  undertakings  to  third 
country markets can be improved (part 6). In addition, the review of the legislative framework 
will also be an opportunity to examine if certain basic notions and concepts should be refined 
to  ensure  better  legal  certainty  for  contracting  authorities  and  undertakings  (part  1).  In  this 
context,  the  review  may  present  certain  opportunities  to  increase  convergence  between  the 
application of the EU public procurement and State aid rules. 

The Green Paper reflects a number of ideas as to how the various objectives could be better 
achieved. However, one has to be aware that there may be conflicts between the various goals 
(e.g.  simplifying  procedures  as  against  taking  other  policy  objectives  into  account).  These 
different  goals  sometimes  translate  into  policy  options  which  may  point  in  different 
directions, and that will require a reasoned choice at a later stage.  

Furthermore,  the  scope  for  possible  legislative  modifications  is  not  unlimited.  Legislative 
changes  will  have  to  be  consistent  with  EU  international  commitments  or  may  require  the 
opening  of  appropriate  negotiations  with  all  partners  concerned  on  possible  requests  for 
compensation.  These  commitments,  as  defined  in  a  plurilateral  agreement11  and  seven 
bilateral agreements12, therefore may have the effect of limiting the scope of any legislative 
adjustments.  This  concerns  in  particular  the  thresholds  for  application  of  the  EU  public 
procurement rules, the definitions of purchasing activities and public purchasers and certain 
procedural issues such as the setting of technical specifications and time periods. 

Concessions  are  not  dealt  with  in  this  consultation;  they  have  been  the  subject  of  earlier 
separate  consultation  exercises  and  impact  assessment.  The  Commission  intends  to  propose 
legislation with a view to ensure greater legal certainty for regional and local authorities and 
economic operators throughout Europe and at facilitating the development of Public-Private 
partnerships.  E-procurement  issues  are  covered  by  a  separate  Green  Paper  which  was 
published on 18 October 201013.  

In  parallel  with  the  current  Green  Paper,  the  Commission  is  undertaking  a  comprehensive 
evaluation  of  the  impact  and  cost-effectiveness  of  EU  public  procurement  policy.  The 
evaluation  will  gather  market-based  evidence  on  the  functioning  of  current  procurement 

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A  classic  example  is  that  of  profitable  energy  efficiency  investments  not  being  undertaken  because 
investment and operational expenditure are managed separately under different budgetary processes. 
WTO 
Procurement 
Government 
http://ec.europa.eu/internal_market/publicprocurement/international_en.htm. 
See on bilateral trade agreements: http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/. 
Green Paper on expanding the use of e-Procurement in the EU, SEC(2010) 1214, 18.10.2010. 

Agreement 

(GPA), 

see 

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legislation with a view to providing empirical insights into the areas that need improvement. 
The results of this new research will be made public in summer 2011. 

Together  with  the  results  of  the  evaluation,  contributions  from  stakeholders  to  this  Green 
Paper will feed the reflection on the future reform of the EU public procurement rules, which 
will lead to a proposal for legislative reform.  

1. 

WHAT ARE PUBLIC PROCUREMENT RULES ABOUT? 

When spending public money, public purchasers have to weigh up different incentives from 
those of managers of a private business who bear the risk of losses and ultimately bankruptcy, 
and are directly controlled by market forces.  

For these reasons, public procurement rules provide for specific contract award procedures to 
enable  public  purchases  to  be  made  in  the  most  rational,  transparent  and  fair  manner. 
Safeguards are put in place to compensate for the potential lack of commercial discipline in 
public  purchasing,  as  well  as  to  guard  against  costly  preferential  treatment  in  favour  of 
national or local economic operators. 

Therefore,  European  public  procurement  rules  apply  to  all  public  contracts  that  are  of 
potential  interest  to  operators  within  the  Internal  Market,  ensuring  equal  access  to  and  fair 
competition for public contracts within the European Procurement Market. 

1.1. 

Purchasing activities 

Basically,  public  procurement  rules  are  meant  to  regulate  the  purchasing  activities  of 
contracting  authorities.  However,  the  EU  Public  Procurement  Directives  do  not  explicitly 
limit their scope to purchases covering the specific needs of the contracting authority.14 This 
has  prompted  a  debate  about  the  applicability  of  the  Directives  in  situations  where  public 
authorities conclude agreements that provide legally binding obligations for purposes that are 
not connected with their own purchasing needs.  

This  concerns,  for  instance,  cases  where  the  grant  agreement  for  the  provision  of  an  aid 
includes  a  legally  binding  obligation  for  the  beneficiary  to  provide  specific  services.  Such 
obligations are normally provided to ensure the appropriate use of public finds; they are not 
intended to meet procurement needs of the public authority granting the aid. 

Member  State  authorities  and  other  stakeholders  have  complained  about  the  lack  of  legal 
certainty with regard to the scope of the public procurement rules in these situations and have 
called for a clarification of the purpose of these rules. In its most recent case-law, the Court 
held that the concept of public contracts requires that the works, supplies or services which 
are  the  subject  of  the  contract  are  carried  out  for  the  immediate  economic  benefit  of  the 
contracting authority.15  

Question: 

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See judgment of 18.11.2004 in Case C-126/03 Commission v Germany, paragraph 18. 
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.  

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1. 

Do you think that the scope of the Public Procurement Directives should be limited 
to purchasing activities? Should any such limitation simply codify the criterion of the 
immediate  economic  benefit  developed  by  the  Court  or  should  it  provide 
additional/alternative conditions and concepts? 

1.2. 

Public contracts 

The  current  classification  of  public  contracts  –  in  works  contracts,  supply  contracts  and 
service  contracts  –  is  in  part  the  result  of  historic  development.  The  need  to  classify  public 
contracts in one of these categories at the very outset can result in difficulties, for instance in 
the  case  of  contracts  for  the  purchase  of  software  applications  which  may  be  considered  as 
either  supply  or  service  contracts,  depending  on  the  circumstances.  Directive  2004/18/EC 
contains specific rules for  mixed  contracts, which have been  further developed  by the case-
law. In the view of the Court, where a contract contains elements relating to different types, 
the applicable rules have to be determined by identifying the main purpose of the contract. 

Some of these problems could be avoided by simplifying the present structure. It would, for 
instance,  be  conceivable  to  provide  only  two  types  of  public  contracts  as  in  the  case  of  the 
GPA  system,  which  distinguishes  only  between  supply  and  service  contracts,  with  works 
being  considered  as  a  form  of  services  (“construction  service  contract”).  The  possibility  of 
using  a  unified  concept  of  public  contract  and  differentiating  according  to  the  subject  only 
where this is strictly necessary (for example, in the provisions on the thresholds) could also be 
envisaged. 

Question: 

2. 

Do  you  consider  the  current  structure  of  the  material  scope,  with  its  division  into 
works,  supplies  and  services  contracts,  appropriate?  If  not,  which  alternative 
structure would you propose? 

Independently of a possible restructuring of the contract types, it might be necessary to review 
and simplify the current definitions of the various contract types. 

This  concerns  in  particular  the  definition  of  “public  works  contracts”  in  Article  1(2)(b)  of 
Directive  2004/18/EC,  which  contains  three  alternative  conditions  that  are  complex  and 
partially overlapping. The concept of a public works contract includes the execution, or both 
the design and  execution, of specific works  of types listed in an annex to the Directive, the 
execution,  or  both  the  design  and  execution  of  a  work  as  defined  in  Article  1(2)(b)  of  the 
Directive  and,  finally,  “the  realisation,  by  whatever  means,  of  a  work  corresponding  to  the 
requirements specified by the contracting authority”. The last condition was added in order to 
make  sure  that  the  definition  includes  cases  where  the  works  are  carried  out  not  by  the 
contractor itself, but by third parties acting on behalf of the contractor. 

It might be envisaged to simplify the definition by replacing the current structure with a much 
simpler and clearer set of conditions covering all kinds of construction activities, regardless of 
their  character  and  purpose,  including  activities  connected  with  the  realisation  of  specific 
works, possibly by third parties.  

Question: 

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3. 

Do  you  think  that  the  definition  of  “works  contract”  should  be  reviewed  and 
simplified? If so, would you propose to omit the reference to a specific list annexed 
to the Directive? What would be the elements of your proposed definition? 

A/B-services 

An even more important matter is the coverage with regard to service contracts.  

The  current  Directives  make  a  distinction  between  so  called  "A-services"16  and  "B-
services"17.  While  A-services  are  subject  to  the  full  procedures  of  the  Directives,  contract 
awards for B-services have only to comply with the provisions on technical specifications and 
on the transmission of a notice of the results of the award procedure18. However, according to 
ECJ case-law, contracting authorities awarding contracts for B-services have to comply with 
the fundamental rules of primary EU law, in particular the principles of non-discrimination, 
equal  treatment  and  transparency,  if  the  contracts  in  question  are  of  certain  cross-border 
interest.19  This  implies  an  obligation  to  ensure  a  sufficient  degree  of  advertising  to  enable 
interested  economic  operators  from  other  Member  States  to  decide  whether  to  express  their 
interest in the contract. 

Initially, the intention of the legislator was to limit the full application of the Directive, for a 
transitional  period,  to  certain  specific  service  contracts  which  were  deemed  to  present  an 
increased  potential  for  cross-border  trade.20  One  has  to  be  aware  that,  in  view  of  the  open 
character  of  the  “B  services”  list  (see  category  27:  “other  services”),  full  application  of  the 
Directives to services is, in fact, the exception, whereas treatment as “B services” is the rule. 

There are some doubts whether this situation is still appropriate in the light of the economic 
and legal development of the Internal Market. For some of the services explicitly mentioned 
in  the  “B”  list,  such  as  water  transport  services,  hotel  services,  personnel  placement  and 
supply  services  or  security  services,  it  does  indeed  appear  difficult  to  assume  that  they 
represent a lesser cross-border interest than the services in the “A” list. 

Furthermore,  the  distinction  between  “A”  and  “B”  services  is  a  source  of  difficulties  and 
possible errors in the application of the rules. As in the case of contract classification, there 
are the problems of borderline situations and mixed contracts.21 In addition, such a distinction 
does not exist in most trading partners' systems. The current legal situation therefore makes it 
more  difficult  to  obtain  further  market  access  commitments  from  trading  partners  since  the 
EU is not in a position to reciprocate, especially on services that have become relevant for the 
internal market and cross-border trade.  

The most consequent solution would be to eliminate the distinction between the current “B” 
services  and  “A”  services  and  to  apply  the  standard  regime  to  all  service  contracts22.  This 
would have the advantage of simplifying the existing rules. If the current consultation shows 
that the general regime needs to be simplified, such simplification could also make it easier to 
abolish the current special regime for B-services.  

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Services listed in Annex II A of Directive 2004/18/EC or Annex XVII A of Directive 2004/17/EC. 
Services listed in Annex II B of Directive 2004/18/EC or Annex XVII B of Directive 2004/17/EC. 
See Articles 20 and 21 of Directive 2004/18/EC and Articles 31 and 32 of Directive 2004/17/EC. 
See judgment of 13.11.2007 in Case C-507/03 Commission v Ireland, paragraphs 24-31. 
See recital 19 of Directive 2004/18/EC. 
See Article 22 of Directive 2004/18/EC 
For social services, cf. below Section 4.4 

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Questions: 

4. 

5. 

Do you think that the distinction between A and B services should be reviewed? 

Do you believe that the Public Procurement Directives should apply to all services, 
possibly on the basis of a more flexible standard regime? If not please indicate which 
service(s) should continue to follow the regime currently in place for B-services, and 
the reasons why. 

Thresholds  

At  present,  the  thresholds  defined  in  the  directives  are  regarded  as  too  low  by  some 
stakeholders and they consequently ask for these thresholds to be raised on the grounds that 
cross-border interest is considered to be too limited to justify the administrative burdens of a 
contract  award  procedure  for  relatively  low  value  contracts  currently  covered  by  the 
Directives.  

However, increasing the thresholds would exempt more contracts from the requirement of an 
EU-wide  publication  of  a  contract  notice,  reducing  business  opportunities  for  undertakings 
throughout Europe.  

In  any  case,  it  must  be  noted  that  all  international  commitments  taken  by  the  EU  include 
thresholds which are set at exactly the same value as in the current directives, except for the 
so-called B-services  (and  social services in particular)23. These thresholds determine  market 
access  opportunities  and  are  one  of  the  most  important  elements  in  all  of  these  agreements. 
Any  increase  in  the  applicable  thresholds  in  the  EU  would  automatically  involve  a 
corresponding increase in all the agreements concluded by the EU (meaning not only in the 
GPA,  but  also  in  all  other  international  agreements).  This  situation  could  in  turn  trigger 
requests for compensation from our partners. These requests could be quite significant.  

Question: 

6. 

Would  you  advocate  that  the  thresholds  for  the  application  of  the  EU  Directives 
should  be  raised,  despite  the  fact  that  this  would  entail  at  international  level  the 
consequences described above?  

Exclusions 

The section on “excluded contracts” in Directive 2004/18/EC24 is quite heterogeneous: Some 
of the exclusions are based on exceptions/limitations of the scope of the Treaty (Art. 14) or on 
considerations  of consistency with the international legal order (Art.  15)  or with  other legal 
disciplines (Art. 16 c, e), while others are the result of political choices (Art. 16 a, b, d, f, Art. 
17). This makes it difficult to implement an overarching concept when assessing the need for 
a review of these provisions. In any event, a review of these exclusions must be considered in 
the  light  of  Europe’s  international  commitments  which  currently  reflect  the  exceptions  and 
derogations included in the directives. The introduction of any new exclusion would certainly 
be a matter of concern from this point of view. The international commitments do leave room, 
however,  for  updating  or  clarifying  the  content  and  presentation  of  the  exclusions.  The 

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For social services , cf. below Section 4.4 
Articles 12 – 18 of Directive 2004/18/EC. 

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abolition  of  exclusions  that  may  no  longer  be  needed  for  legal,  political  or  economic 
developments could also be considered. 

Questions: 

7. 

8. 

Do you consider the current provisions on excluded contracts to be appropriate? Do 
you  think  that  the  relevant  section  should  be  restructured  or  that  individual 
exclusions are in need of clarification?  

Do you think that certain exclusions should be abolished, reconsidered or updated? If 
yes, which ones? What would you propose? 

1.3. 

Public purchasers 

Procurement by entities belonging to the State sphere 

Directive  2004/18/EC  applies  to  contracts  awarded  by  the  State  (including  all  of  its 
subdivisions),  regional  or  local  authorities  and  bodies  governed  by  public  law,  as  well  as 
associations formed by one or more of these entities.25  

While  the  concepts  of  “State”  and  “local  and  regional  authorities”  are  relatively 
straightforward,  the  concept  of  “bodies  governed  by  public  law”  is  more  complex.  It  is 
intended  to  cover  legally  independent  organisations  that  have close  links  with  the  State  and 
fundamentally  act  like  State  entities.  Examples  include  public  broadcasting  bodies, 
universities, sickness insurance funds and municipal enterprises. 

The  definition  provided  by  Directive  2004/18/EC  has  been  the  subject  of  a  whole  series  of 
judgments  by  the  ECJ.  In  the  light  of  that  case-law,  the  conditions  can  be  summarised  as 
follows: 

(1) 

(2) 

(3) 

The body has the specific purpose of meeting needs in the general interest not having 
an industrial or commercial character. 

It has its own legal personality (under private or public law). 

It depends closely, for its financing, management or supervision, on the State, regional 
or local authorities or other bodies governed by public law (see the exact conditions in 
Article 1(9), second subparagraph, point (c)).  

The proper application of these elements requires a detailed case-by-case analysis, taking into 
account  factors  such  as  the  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.  

Question: 

9. 

Do  you  consider  that  the  current  approach  in  defining  public  procurers  is 
appropriate? In particular, do you think that the concept of “body governed by public 
law”  should  be  clarified  and  updated  in  the  light  of  the  ECJ  case-law?  If  so,  what 
kind of updating would you consider appropriate? 

25 

For the entities bound to apply Directive 2004/17/EC, see below point 7. 

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Public utilities 

Under  the  current  public  procurement  regime,  a  special  Directive,  2004/17/EC,  regulates 
procurement  in  the  water,  energy,  transport  and  postal  services  sectors.  These  sectors  have 
certain features in common: they are network industries, i.e. they involve the use of a physical 
or "virtual" network (e.g. pipelines, electricity grids, postal infrastructures, railway lines etc.), 
or  they  exploit  geographical  areas,  normally  on  an  exclusive  basis,  in  order  to  provide 
terminal facilities or to prospect for and eventually extract minerals (oil, gas, coal etc.).  

A  further  characteristic  of  these  sectors  is  that  the  activities  in  question  are  carried  out  not 
only by public authorities, but also - and in some Member States above all - by commercial 
companies, whether they be public undertakings or private companies operating on the basis 
of  special  or  exclusive  rights.  A  major  reason  for  introducing  public  procurement  rules  for 
these sectors was the closed nature of the markets in which the operators are active, owing to 
the  existence  of  special  or  exclusive  rights  granted  by  the  Member  States  concerning  the 
supply  to,  provision  or  operation  of  networks  for  providing  the  service  concerned.  The 
extension of public procurement disciplines to include public and private (commercial) utility 
operators  was  considered  necessary  because  of  the  variety  of  ways  in  which  national 
authorities  can  influence  the  behaviour  of  these  entities,  including  the  granting  (or  not)  of 
special  or  exclusive  rights  or  participation  in  their  capital  and  representation  in  the  entities' 
administrative, managerial or supervisory bodies.  

In other words, in the absence of sufficient competitive pressure, the discipline put in place by 
the  application  of  the  procedural  rules  of  the  Utilities  Directive  was  considered  to  be 
necessary in order to ensure that procurement for the pursuit of the activities concerned would 
be  carried  out  in  a  transparent  and  non-discriminatory  manner.  In  the  absence  of  dedicated 
rules,  it  was  feared  that  procurement  decisions  by  utility  operators  could  be  influenced  by 
favouritism, local preference or other factors.  

Since then, processes of liberalisation have been pursued either at EU level or at the national 
level for many of these sectors (for instance, concerning electricity and gas, exploration and 
exploitation  of  hydrocarbons,  postal  services,  etc.).  However,  experience  shows  that 
"liberalisation",  i.e.  a  process  aimed  at  obtaining  free  access  to  the activity  concerned,  does 
not  necessarily  or  automatically  lead  to  strong  competition  -  "established  operators"  often 
maintain  very  substantial  market  shares,  and  in  some  Member  States,  the  presence  of  state-
owned enterprises may also distort market functioning. 

The  current  Directive  contains  a  provision,  Article  30,  which  allows  the  Commission  to 
exempt certain procurements from the scope of the Directive where the level of competition 
(on markets to which access is unrestricted) is such that competitive pressure will ensure the 
necessary  transparency  and  non-discrimination  in  procurement  in  the  pursuit  of  such 
activities.  To  date,  the  Commission  has  adopted  sixteen  such  Decisions  concerning  nine 
different  Member  States,  and  one  application  has  been  withdrawn.  The  sectors  concerned 
until now have been the electricity sector (production and sale), the gas sector (sale), the oil 
and (natural) gas sectors, as well as various parts of the postal sector (in particular logistics, 
parcels and financial services).  

One  final  point  to  consider  is  that  more  and  more  private  entities  are  gaining  the  right  to 
operate after undergoing open and transparent procedures and therefore do not have special or 
exclusive rights within the meaning of the Directive. 

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It  should  also  be  noted  that  the  full  scope  of  the  Utilities  Directive  has  been  enshrined 
internationally, either in the GPA or in bilateral agreements. Possible restrictions of coverage 
could result in a modification of the international commitments undertaken by the EU, which 
might give rise to requests for compensation. 

Questions: 

10. 

10.1. 

11. 

12. 

13. 

Do you think that there is still a need for EU rules on public procurement in respect 
of these sectors? Please explain the reasons for your answer. 

If yes: Should certain sectors that are currently covered be excluded or, conversely, 
should other sectors also be subject to the provisions? Please explain which sectors 
should be covered and give the reasons for your answer. 

Currently, the scope of the Directive is defined on the basis of the activities that the 
entities concerned carry out, their legal statute (public or private) and, where they are 
private, the existence or absence of special or exclusive rights. Do you consider these 
criteria to be relevant or should other criteria be used? Please give reasons for your 
answer.  

Can the profit-seeking or commercial ethos of private companies be presumed to be 
sufficient to guarantee objective and fair procurement by those entities (even where 
they operate on the basis of special or exclusive rights)? 

Does the current provision in Article 30 of the Directive constitute an effective way 
of  adapting  the  scope  of  the  Directive  to  changing  patterns  of  regulation  and 
competition in the relevant (national and sectoral) markets?  

2. 

IMPROVE THE TOOLBOX FOR CONTRACTING AUTHORITIES 

Contracting  authorities  sometimes  complain  that  the  regulatory  instruments  provided  by  the 
EU rules are not fully adapted to their purchasing needs. In particular, they claim that leaner 
and/or  more  flexible  procedures  are  needed.  They  further  argue  that,  in  certain  cases, 
application of the full set of rules is not practicable (particularly in the case of procurement by 
very  small  contracting  authorities);  other  situations  (certain  forms  of  public-public 
cooperation) should be entirely exempted from the application of these rules. There are also 
areas of public purchasing where the instruments provided by the EU procurement rules might 
not be sufficient (joint procurement, specific problems arising after the contract award).  

These  concerns  will  be  discussed  in  the  following  section.  It  is  clear  from  the  feedback 
provided by economic operators that there have to be some basic requirements enshrined in 
EU rules to guarantee a European level playing field, whereas some more detailed rules of the 
current Directives could be reviewed. It must be noted, however, that cutting back on the EU 
rules  will  come  up  against  certain  limits.  A  number  of  procedural  requirements  originate 
directly from the GPA and the bilateral agreements signed by the EU, such as the deadlines 
for different procedures, the conditions for using a negotiated procedure without publication 
or  the  publication  of  a  contract  award  notice.  Abandoning  or  changing  these  requirements 
would not be possible without a renegotiation of the EU's international obligations. It should 
also be borne in mind that the EU rules are complemented by a large body of rules at national 
or  regional  level.  Regulation  that  is  repealed  at  EU  level  might  be  replaced  at  other  levels, 
thus  creating  a  risk  of  more  diverse  national  legislation  and  possibly  more  national  gold-

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plating26.  Any  review  of  the  procedural  rules  will  also  have  to  be  checked  against  the 
objective  of  ensuring  the  greatest  possible  coherence  between  public  procurement  law  and 
other areas of EU-law, such as State aid control. 

Questions:  

14. 

Do  you  think  that  the  current  level  of  detail  of  the  EU  public  procurement  rules  is 
appropriate? If not, are they too detailed or not detailed enough?  

2.1.  Modernise procedures 

One  of  the  main  themes  of  the  public  debate  is  whether  the  procedures  provided  by  the 
Directives  are  still  fully  suitable  for  the  needs  of  contracting  authorities  and  economic 
operators, or whether they should be modified, – and, if so, how – particularly with a view to 
reducing  complexity  and  administrative  burdens,  while  at  the  same  time  ensuring  fair 
competition for public contracts and optimal procurement outcomes. 

General procedures  

The  current  Directives  provide  for  a  wide  range  of  tools  and  procedures.  Both,  Directive 
2004/17/EC  and  Directive  2004/18/EC  give  procurers  a  free  choice  between  the  open27  and 
the restricted28 procedure. The situation is somewhat different when it comes to the negotiated 
procedure  with  prior  publication29  of  a  contract  notice.  The  Utilities  Directive  provides  for 
increased flexibility30, with the result that utilities may freely choose to award their contracts 
by  negotiated  procedures,  provided  they  have  published  a  call  for  competition.  Under 
Directive 2004/18/EC, on the other hand, negotiated procedures with prior publication may be 
used exclusively under the specific circumstances listed in Article 30. In both Directives the 
use of negotiated procedures without publication of a contract notice is limited to exceptional 
situations, which are exhaustively listed31 and restrictively interpreted. 

26 

27 

28 

29 

30 

31 

The notion of "Gold-plating" describes national legislation adding on additional rules or requirements to 
the standards required by relevant the EU rules. 
In  the  open  procedure,  contracting  authorities  and  entities  publish  a  contract  notice,  on  the  basis  of 
which  all  interested  parties  can  submit  their  offers.  Amongst  those  bidders  who  fulfil  the  criteria  for 
qualitative  selection,  the  contracting  authority  chooses  the  offer  that  fulfils  best  the  award  criterion 
indicated  in  the  contract  notice  (lowest  price  or  most  economically  advantageous  tender).  This 
procedure accounts for nearly 3/4 of all procedures within the scope of application of the Directives. 
In  the  restricted  procedure,  all  economic  operators  can  reply  to  the  contract  notice  expressing  their 
interest  to  participate,  but  only  certain  candidates,  chosen  on  the  basis  of  criteria  indicated  in  the 
contract notice, are invited to submit offers.  
In the negotiated procedure, contracting authorities and entities consult the economic operators of their 
choice  and  negotiate  with  one  or  more  of  them  the  terms  of  the  contract  to  be  concluded.  Such 
negotiation of the terms of the offer is not possible in the open or the restricted procedure. 
The increased flexibility provided for under the Utilities Directive is due to the fact that it applies not 
only  to  public  authorities,  but  also  to  commercial  companies,  be  they  public  undertakings  or  private 
companies  operating  on  the  basis  of  special  or  exclusive  rights.  Its  procedures  are  therefore  aimed  at 
being  close  to  commercial  practices,  albeit  such  that  preserve  a  minimum  of  transparency  and  equal 
treatment. 
Article 31 of Directive 2004/18/EC, Article 40(3) of Directive 2004/17/EC. 

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In  the  area  of  services,  procurers  can  also  make  use  of  design  contests32.  Several  specific 
procedural  options  and  tools  were  introduced  into  the  Directives  in  2004,  such  as  the 
competitive  dialogue33,  dynamic  purchasing  systems34  or  electronic  auctions35.  Further 
procedural flexibility introduced in 2004 includes the possibility to centralise procurement by 
procuring  from  or  through  a  central  purchasing  body36  or  by  the  award  of  framework 
agreements37. Furthermore, in the context of the financial crisis, the Commission considered 
the use of an accelerated procedure38 to be justified for conducting major public investment 
projects in 2009 and 2010. 

This increased range of procedural options now needs to be examined to ascertain whether the 
procedures  under  the  current  Directive  are  still  the  best  possible  toolkit  for  efficient 
procurement,  including  in  view  of  the  increasing  importance  of  public-private  partnerships. 
Both the design of the different types of procedures as such, and also the various requirements 
imposed  by  the  Directives  for  the  different  stages  of  the  procedure39,  should  undergo  a 
thorough screening as to their efficiency in ensuring optimal procurement outcomes with the 
least possible administrative burdens40.  

Questions: 

15. 

16. 

32 

33 

34 
35 
36 
37 

38 

39 

40 

Do  you  think  that  the  procedures  as  set  out  in  the  current  Directives  allow 
contracting  authorities  to  obtain  the  best  possible  procurement  outcomes?  If  not: 
How  should  the  procedures  be  improved  in  order  to  alleviate  administrative 
burdens/reduce  transaction  costs  and  duration  of  the  procedures,  while  at  the  same 
time guaranteeing that contracting authorities obtain best value for money? 

Can you think of other types of procedures which are not available under the current 
Directives  and  which  could,  in  your  view,  increase  the  cost-effectiveness  of  public 
procurement procedures?  

Design contests are procedures which enable the contracting authority or contracting entity to acquire a 
plan  or  design  selected  by  a  jury  after  being  put  out  to  competition,  for  example  a  contest  to  obtain 
ideas  as  to  the  design  of  a  community  centre  of  a  quarter  that  is  scheduled  for  urban  regeneration. 
Design  contest  can  also  be  used  in  other  fields,  for  instance  to  obtain  plans  for  the  possible  future 
structure of a communications network between administrations at different levels. 
Under  this  procedure  for  particularly  complex  contracts,  the  detailed  contract  conditions  can  be 
determined  through  a  dialogue  between  the  contracting  authority  and  the  candidates;  Article  29  of 
Directive  2004/18/EC  (only  in  Directive  2004/18/EC).  According  to  recent  statistics,  the  competitive 
dialogue was however used for less than 0.4 % of the procedures. 
Article 33 of Directive 2004/18/EC. 
Article 54 of Directive 2004/18/EC. 
Article 11 of Directive 2004/18/EC. 
In  this  regard,  new  flexibility  was  introduced  only  into  Directive  2004/18/EC  (see  Article  32),  as  the 
already existing (and different) provisions in the Utilities Directive (Article 14) were considered to be 
satisfactory in the particular context of Utilities procurement. 
This  procedure  is  foreseen  by  Article  38(8)  of  Directive  2004/18/EC  in  cases  where  urgency  renders 
impracticable the regular time limits. Cf. press release IP/08/2040 of 19 December 2008. 
For  instance,  rules  relating  to  publication  of  notices,  content  of  tender  documents,  time  spans  for  the 
procedure, evidence for selection criteria, documentation and communication with bidders. 
Of  course,  up  to  date  information  and  communication  technologies  have  a  considerable  potential  for 
increasing the procedures for all parties and help cutting red tape, notably when it comes to gathering 
and  providing  certificates.  This  aspect  of  the  modernisation  debate  is  however  not  dealt  with  by  the 
current Green Paper, as it is covered by a separate consultation, the Green Paper on expanding the use 
of e-Procurement in the EU, SEC(2010) 1214, 18.10.2010. 

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17. 

18. 

Do  you  think  that  the  procedures  and  tools  provided  by  the  Directive  to  address 
specific  needs  and  to  facilitate  private  participation  in  public  investment  through 
public-private  partnerships  (e.g.  dynamic  purchasing  system,  competitive  dialogue, 
electronic  auctions,  design  contests)  should  be  maintained  in  their  current  form, 
modified (if so, how) or abolished?  

On  the  basis  of  your  experience  with  the  use  of  the  accelerated  procedure  in  2009 
and  2010,  would  you  advocate  a  generalisation  of  this  possibility  of  shortening  the 
deadlines under certain circumstances? Would this be possible in your view without 
jeopardizing the quality of offers? 

More negotiation 

Stakeholders often suggest that more flexibility in procurement procedures is needed, and that 
in particular, contracting authorities should be allowed to negotiate the terms of the contract 
with potential bidders.  

The use of negotiations is allowed in the GPA, provided that this is announced in the contract 
notice.  Such  a  possibility  could  hence  be  opened  in  the  general  EU  public  procurement 
legislation,  on  condition  of  compliance  with  the  principles  of  non-discrimination  and  fair 
procedure.  This  could  indeed  give  contracting  authorities  more  flexibility  to  obtain 
procurement outcomes that really fit their needs. 

This  option  needs  to  be  discussed  in  depth  with  all  interested  stakeholders,  contracting 
authorities and economic operators. The possible advantages of more flexibility and potential 
simplification must be weighed against the increased risks of favouritism and, more generally, 
of  overly  subjective  decisions  arising  from  the  greater  discretion  enjoyed  by  contracting 
authorities  in  the  negotiated  procedure.  Such  subjectivity  would  in  turn  make  it  harder  to 
show that the resulting contract did not involve State aid. Moreover, giving more leeway to 
contracting  authorities  will  deliver  useful  results  only  if  they  have  the  necessary  technical 
expertise, knowledge of the market and skills to negotiate a good deal with the suppliers.  

Finally, it must be carefully assessed for which type and size of contracts negotiation would 
make  sense.  Stakeholders  often  claim  that  negotiation  would  be  particularly  appropriate  for 
the  award  of  smaller  contracts.  On  the  other  hand,  it  might  also  -  or  rather  –  be  useful  for 
tendering  large-scale  projects,  notably  through  public-private  partnerships.  Given  the 
complexity of contracts for such projects, there might be an even greater need for particularly 
flexible  procedures  and  large  margins  for  negotiation,  and  more  technical  expertise  on  the 
side of the contracting authority to conduct the negotiations. 

Questions: 

19. 

20. 

21. 

Would  you  be  in  favour  of  allowing  more  negotiation  in  public  procurement 
procedures  and/or  generalizing  the  use  of  the  negotiated  procedure  with  prior 
publication?  

In the latter case, do you think that this possibility should be allowed for all types of 
contracts/all types of contracting authorities, or only under certain conditions?  

Do you share the view that a generalised use of the negotiated procedure might entail 
certain risks of abuse/ discrimination? In addition to the safeguards already provided 

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for  in  the  Directives  for  the  negotiated  procedure,  would  additional  safeguards  for 
transparency  and  non-discrimination  be  necessary  in  order  to  compensate  for  the 
higher level of discretion? If so, what could such additional safeguards be? 

Commercial goods and services 

The  GPA  provides  some  special  rules  for  “goods  and  services  of  a  type  generally  sold  or 
offered  for  sale  in  the  commercial  marketplace  to,  and  customarily  purchased  by,  non-
governmental  buyers  for  non-governmental  purposes”.  Commercial  goods  and  services  are 
considered  to  be  available  on  the  market  in  a  standardized  form  and  hence  procurement  of 
such goods and services is simplified by the fact that price, quality and conditions are widely 
established on the markets. There might be a  case  for  introducing simplified procedures for 
the  purchase  of  such  goods  and  services  (for  instance,  streamlined  procedures  with  shorter 
time-limits). 

Question: 

22. 

Do  you  think  that  it  would  be  appropriate  to  provide  simplified  procedures  for  the 
purchase  of  commercial  goods  and  services?  If  so,  which  forms  of  simplification 
would you propose? 

Selection and award  

Under  the  current  Directives,  the  choice  of  the  winning  bidder  has  to  be  carried  out  in  two 
stages.  During  the  selection  stage,  the  contracting  authority  assesses  the  capacity  and 
suitability  of  the  economic  operators.  This  is  done  on  the  basis  of  exclusion  criteria  and 
criteria of economic and financial standing, professional and technical knowledge and ability. 
In the award stage, the contracting authority examines the offers and chooses the best offer. 
This is done on the basis of objective criteria related to the quality of products and services 
proposed.  

According to ECJ case-law41, contracting authorities are required to operate a strict distinction 
between  selection  criteria  and  award  criteria.  The  contract  award  decision  must  be  based 
exclusively on criteria concerning the products and services offered. Considerations linked to 
the  tenderer’s  ability  to  perform  the  contract,  such  as  his  experience,  manpower  and 
equipment, are not allowed.  

The  GPA  also  makes  a  distinction  between  the  selection  and  the  contract  award  decision. 
However, this distinction is less strict than in the case-law quoted above, since the GPA does 
not  explicitly  prohibit  the  taking  into  account,  at  the  award  stage,  of  criteria  which  are  not 
linked to the goods and services offered, and hence allows bidder-related criteria to be taken 
into account. 

Contracting authorities sometimes complain about the administrative burdens arising from the 
need to first verify the selection criteria for all candidates and bidders before examining the 
award  criteria.  They  argue  that,  in  some  circumstances,  allowing  them  to  first  examine  the 

41 

See judgments of 20.9.1988 in Case 31/87 Beentjes, paragraphs 15-19, of 24.1.2008 in Case C-532/06 
Lianakis, paragraph 30, and of 12.11.2009 in Case C-199/07 Commission v Greece, paragraphs 51 to 
55. 

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award criteria would help to move the process forward more quickly, as the selection criteria 
would only need to be examined with regard to the winning bidder.  

In  that  respect,  there  might  be  an  argument  for  reconsidering  the  organisation  and  the 
sequence of the examination of selection and award criteria within the procedural framework. 
A pointer in that direction is to be found in the more recent ECJ case-law which states that the 
Public  Procurement  Directives  “do  not  in  theory  preclude  the  examination  of  the  tenderers’ 
suitability and the award of the contract from taking place simultaneously”, provided that “the 
two procedures are ... distinct and are governed by different rules”.42 This suggests that it is 
not so much the sequence of the procedural steps that matters, but the separation in principle 
between selection criteria and award criteria. 

However,  the  appropriateness  of  such  a  possibility  would  have  to  be  carefully  analysed.  A 
genuine  alleviation  of  administrative  burdens  can  only  be  imagined  under  specific 
circumstances.  Examining  the  selection  criteria  after  the  award  criteria  would  only  make 
sense  when  the  award  criteria  can  be  assessed  quickly  and  easily  for  all  the  tenders.  This 
could be the case in particular for contract awards concerning the purchase of standard goods 
at the lowest price. Furthermore, the approach would be difficult to implement in a restricted 
or negotiated procedure where the candidates to be invited to tender or negotiate are normally 
selected  on  the  basis  of  the  criteria  for  qualitative  selection,  as  well  as  when  qualification 
systems are being used. 

Some  stakeholders  present  more  far-reaching  proposals  that  would  call  into  question  the 
separation in principle between selection and award criteria. They claim that the possibility to 
take  into  account  bidder-related  criteria,  such  as  experience  and  qualification,  as  award 
criteria might help to improve procurement outcomes. 

However, one has to be aware that creating such a possibility would result in a major change 
in the procedural system set out in the Public Procurement Directives. The separation between 
selection and award criteria guarantees fairness and objectivity in the comparison of tenders. 
Allowing  the  inclusion  of  bidder-related  criteria  such  as  experience  and  qualification  as 
contract  award  criteria  could  undermine  the  comparability  of  the  factors  to  be  taken  into 
account  and  ultimately  infringe  the  principle  of  equal  treatment.  The  reliance  on  bidder 
related criteria could thus potentially also lead to distortions of competition. Proposals in that 
direction  should  therefore  be  envisaged,  if  at  all,  in  limited  circumstances  only,  e.g.  for 
specific types of contracts, where the qualifications and CVs of available staff are particularly 
relevant.  

In any event, any changes that have a bearing on the principle of the separation of selection 
and award would have to be considered extremely carefully. It may be necessary to provide 
additional safeguards in order to guarantee the fairness and objectivity of procedures.  

Questions: 

23. 

Would you be in favour of a more flexible approach to the organisation and sequence 
of  the  examination  of  selection  and  award  criteria  as  part  of  the  procurement 
procedure? If so, do you think that it should be possible to examine the award criteria 
before the selection criteria? 

42 

See judgments Lianakis, paragraph 27, and Commission v Greece, paragraph 51. 

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24. 

Do  you  consider  that  it  could  be  justified  in  exceptional  cases  to  allow  contracting 
authorities to take into account criteria pertaining to the tenderer himself in the award 
phase? If so, in which cases, and which additional safeguards would in your view be 
needed  to  guarantee  the  fairness  and  objectivity  of  the  award  decision  in  such  a 
system? 

Taking past performance into account 

Stakeholders  also  suggest  that  the  current  Directives  would  not  provide  appropriate 
instruments  to  take  account  of  previous  experiences  which  the  contracting  authority  might 
have had with the performance of bidders. It is true that taking such experience into account 
could provide useful pointers to the quality of the bidder and his future work. However, this 
possibility would entail obvious risks of discrimination between bidders. It would therefore be 
necessary  to  put  appropriate  safeguards  in  place  to  ensure  equal  treatment  of  bidders, 
transparency and a fair procedure. 

Question: 

25. 

Do you think the Directive should explicitly allow previous experience with one or 
several bidders to be taken into account? If yes, what safeguards would be needed to 
prevent discriminatory practices? 

Specific tools for utilities 

The  procedural  tools  of  the  Utilities  Directive  differ  substantially  from  those  of  Directive 
2004/18/EC  on  a  number  of  points.  One  aspect  is  that  they  are  characterised  by  greater 
procedural flexibility for contracting entities. In addition to the above mentioned free choice 
of  a  negotiated  procedure  with  a  call  for  competition,  utilities  operators  also  have  at  their 
disposal  two  specific  tools  to  organise  procurement,  namely:  qualification  systems43  and 
periodic indicative notices44. 

Under the terms of the current Utilities Directive, notices on the existence of a qualification 
system can be used as a means of calling for competition in respect of procurements of any 
given  type  of  works,  supplies  or  services  that  will  be  procured  over  the  duration  of  the 
qualification  system,  irrespective  of  the  number  of  individual  procurement  procedures  that 
will be used for the purpose. Where a notice on the existence of a qualification system is the 
chosen means of calling for competition, then the specific contract(s) concerned may only be 
awarded by restricted or negotiated procedures in which participants are chosen from among 
those - and only those – who are already qualified in accordance with the rules governing the 
system concerned. Qualification systems may be a useful tool in connection with procurement 
of technically exacting works, supplies or services45 which involve such a lengthy procedure 
in order for economic operators to qualify46 that it is advantageous for all involved to use the 
same  qualification  process  in  respect  of  a  number  of  individual  procurement  procedures, 
rather than having to repeat the qualification process for each procurement procedure.  

43 
44 
45 
46 

See in particular Article 53.  
Cf. Article 42(3). 
E. g. railway rolling stock, high pressure gas pipes etc. 
In some cases longer than six months. 

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Periodic  indicative  notices  can  be  used  as  a  means  of  calling  for  competition  in  respect  of 
procurements of any given type of works, supplies or services that are to be procured over a 
twelve-month  period,  irrespective  of  the  number  of  individual  procurement  procedures  that 
will be used for the purpose. When a periodic indicative notice is the chosen means of calling 
for  competition,  then  the  specific  contract(s)  concerned  may  not  be  awarded  by  open 
procedures, but only by restricted or negotiated procedures in which participants are chosen 
from  among  those  -  and  only  those  –  who  have  declared  their  interest  in  response  to  the 
periodic indicative notice. Periodic indicative notices are often used as a means of calling for 
competition in respect of repetitive purchases of similar uniform goods, services or works and 
they can therefore facilitate the day-to-day business of utilities operators. 

Question: 

26. 

Do you consider that specific rules are needed for procurement by utilities operators? 
Do  the  different  rules  applying  to  utilities  operators  and  public  undertakings 
adequately recognise the specific character of utilities procurement?  

2.2. 

Specific instruments for small contracting authorities 

Small  contracting  authorities,  in  particular,  often  complain  that  applying  the  full  regime  of 
procedural  rules  and  safeguards  for  the  award  of  their  relatively  small  contracts  requires  a 
disproportionate  amount  of  time  and  effort.  For  small  contracts  below  the  thresholds  of  the 
Directives, they also complain about legal uncertainty relating to the necessity to comply or 
not  with  requirements  stemming  from  primary  law.  Both  concerns  could  be  addressed  as 
follows: 

A lighter procedural framework for local and regional contracting authorities for the award 
of contracts above the thresholds of the Directives 

There  could  be  case  for  setting  out  a  lighter  procedural  framework  for  local  and  regional 
contracting authorities so as to make full use of the flexibilities that are available under the 
GPA  for  sub-central  authorities  and  utilities  operators  without  compromising  the  need  for 
transparency. The current Directives provide these flexibilities only for utilities operators, but 
not  for  local  and  regional  contracting  authorities.  Such  a  differentiated  system  would  give 
local  authorities  more  freedom  in  their  procurement  business  and  reduce  administrative 
burdens  precisely  in  those  areas  where  they  might  be  disproportionate.  On  the  other  hand, 
creating different levels of procedural requirements could add to the complexity of the overall 
legal  framework  and  might  be  difficult  to  transpose  and  apply  in  practice,  notably  when  it 
comes to the application of State aid rules.47 

One  element  of  such  a  lighter  procedural  framework  could  be  less  strict  publication 
requirements:  Under  the  GPA,  a  sub-central  contracting  authority  can  award  a  contract 
without publishing an individual contract notice, as long as it has announced its intention and 
published specific information in a periodic indicative notice or a notice on the existence of a 
qualification system48. This possibility could considerably reduce administrative burdens for 

47 

48 

State aid rules focus on the compensation granted rather than on the size of the contracting authority. 
Any  possible  revision  towards  a  lighter  procedural  framework  shall  be  without  prejudice  to  the 
application of State aid rules. 
For detailed explanation of these instruments please refer to section 2.1. 

EN 

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contracting  authorities.  A  possible  downside  might  be  reduced  accessibility  to  contracts  for 
economic operators, resulting in reduced competition for the individual contracts.  

Another  possibility  could  be  to  allow  the  generalized  use  of  the  negotiated  procedure  with 
prior  publication  of  a  contract  notice.  The  possibility  to  allow  negotiations  in  general  has 
already been discussed above (section 2.1). The appropriateness of this possibility specifically 
for local and regional contracting authorities should be carefully analyzed. It may be a good 
way to adapt the contract to take into account specific concerns and needs of such authorities. 
On  the  other  hand,  it  is  not  certain  that  small contracting  authorities  always  have  the  buyer 
power and technical expertise to conduct negotiations on an equal footing with the bidders. 

Questions: 

27. 

28. 

Do  you  think  that  the  full  public  procurement  regime  is  appropriate  or  by  contrast 
unsuitable  for  the  needs  of  smaller  contracting  authorities?  Please  explain  your 
answer. 

If so, would you be in favour of a simplified procurement regime for relatively small 
contract awards by local and regional authorities? What should be the characteristics 
of such a simplified regime in your view?  

More legal certainty for awards below the thresholds of the Directives 

Many of the contracts awarded by small local and regional contracting authorities have values 
below  the  thresholds  of  the  Directives.  However,  according  to  the  case-law  of  the  ECJ,  the 
award  of  such  contracts  must  respect  the  basic  principles  of  EU  law,  such  as  non-
discrimination and transparency, if they present a cross-border interest. The Commission has 
stated its view on the requirements arising from the case-law of the Court in its Interpretative 
Communication on the Community law applicable to contract awards not or not fully subject 
to the provisions of the Public Procurement Directives49.  

However,  many  contracting  authorities  claim  that  the  clarification  provided  by  this 
Communication  might  not  always  be  sufficient  in  practice,  especially  when  it  comes  to 
determining whether or not there is a cross-border interest. The uncertainty of whether or not 
the  standards  of  the  basic  principles  must  be  respected  in  specific  cases  would  make  life 
difficult  especially  for  smaller  contracting  authorities.  The  importance  of  this  issue  is  also 
apparent  from  the  measures  taken  by  Member  States  in  this  regard  in  the  context  of  the 
financial crisis.  

Even though contracts below the thresholds would most probably not be covered by a future 
legislative  proposal,  further  guidance  could  be  considered  to  help  contracting  authorities  in 
assessing the existence or not of a certain cross-border interest in specific cases. 

Question: 

49 

Commission Interpretative Communication on the Community law applicable to contract awards not or 
not  fully  subject  to  the  provisions  of  the  Public  Procurement  Directives  of  1.8.2006  (OJ  C  179, 
1.8.2006, p. 2). Cf. also the decision of the General Court of 20 May 2010 in case T-258/06, Germany 
vs. Commission. 

EN 

20 

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29. 

Do  you  think  that  the  case-law  of  the  Court  of  Justice  as  explained  in  the 
Commission Interpretative Communication provides sufficient legal certainty for the 
award  of  contracts  below  the  thresholds  of  the  Directives?  Or  would  you  consider 
that  additional  guidance,  for  instance  on  the  indications  of  a  possible  cross-border 
interest,  or  any  other  EU  initiative,  might  be  needed?  On  which  points  would  you 
deem this relevant or necessary? 

2.3. 

Public-public cooperation 

Another  issue  which  has  been  the  subject  of  controversial  debate  in  recent  decades  is  the 
question of whether, and to what extent, public procurement rules should apply to contracts 
concluded between public authorities.  

The  principle  of  fair  and  open  competition  prevents  contracts  concluded  between  public 
authorities from being automatically excluded from the scope of application of the EU public 
procurement  Directives.  However,  it  is  true  that  the  application  of  these  rules  is  not 
appropriate  for  certain  forms  of  cooperation  between  public  authorities,  and  therefore  the 
European Court of Justice does not consider these to be public procurement.  

In  essence,  a  dividing  line  has  to  be  drawn  between  arrangements  among  contracting 
authorities to perform their tasks covered by their right of self–organisation on the one hand 
and procurement activities which should benefit from of open competition among economic 
operators on the  other  hand. The ECJ has distinguished in particular between two scenarios 
for public-public cooperation that are not covered by the EU public procurement Directives:  

In-House:  Contracts  awarded  to  a  publicly  owned  entity  are  not  considered  to  be  public 
procurement if this entity is being controlled by the contracting authorities in a similar way to 
that  in  which  they  control  their  own  departments,  and  if  it  conducts  an  essential  part  of  its 
activities  with  the  contracting  authorities50.  Several  contracting  authorities  can  use  a  single, 
jointly controlled in-house entity (vertical/institutionalised cooperation). However, this case-
law of the Court leaves a number of questions open, such as what is meant exactly by "similar 
control", the award of contracts from the controlled entity to the mother(s) or to an in-house 
sister (i.e. an entity controlled by the same mother). 

"Horizontal  cooperation":  In  a  more  recent  judgment51,  the  Court  found  that  using  jointly 
controlled  in-house entities  was not the  only  way to perform public-public cooperation, and 
that such cooperation can remain at a purely contractual level (horizontal/non-institutionalised 
cooperation).  This  kind  of  set-up  is  not  covered  by  the  EU  public  procurement  rules  in  the 
case  of  joint  performance  by  solely  public  entities  of  a  public  task,  using  own  resources, 
having  a  common  aim  and  involving  mutual  rights  and  obligations  going  beyond 
"performance of a task against remuneration" in the pursuit of objectives in the public interest. 

Apart  from  these  two  forms  of  cooperation,  one  further  case  needs  to  be  mentioned,  which 
does not concern the "cooperation" in the strict sense between several contracting authorities, 
but rather the transfer of competence for a public task from one authority to another. Such a 
transfer of competences remains outside the scope of the EU public procurement Directives if 
the  responsibility  for  the  task  as  such  is  transferred  in  its  entirety  (as  opposed  to  simply 
entrusting the actual execution of the task to another authority). 

50 
51 

See e.g. cases C-107/98, Teckal; C-324/07, Coditel and C-573/07, Sea. 
Case C-480/06, Commission v Germany. 

EN 

21 

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The  evolving  case-law  of  the  ECJ  has  resulted  in  quite  a  complex  picture  of  possible 
exceptions  for  public-public  cooperation,  and  experience  has  shown  that  contracting 
authorities are not always clear about whether and under what conditions their relations fall 
within the scope of the EU law on public procurement. To reply to this need for clarification 
in the short term, the Commission services will provide guidance on the interpretation of the 
case law in a staff working document to be published in 2011.  

The main question, however, is whether and how this issue should be addressed by legislative 
rules which would provide in particular a clear definition of those forms of cooperation that 
are outside of the scope of application of the EU public procurement Directives. 

It could be useful to explore whether there is room for a concept with certain common criteria 
for exempted public-public cooperations. Such a concept should be designed so as to clearly 
distinguish between modern forms of organisation of the (joint) performance of public tasks 
by  contracting  authorities,  that  are  guided  solely  by  considerations  of  public  interest  on  the 
one hand (i.e. not covered by public procurement rules), and the pure (commercial) sale and 
purchase  of  goods  and  services  on  the  market  on  the  other  hand  (covered  by  the  rules).  A 
careful  analysis  must  be  made  of  how  this  distinction  can  be  implemented  in  practice,  also 
taking  into  account  what  has  been  handed  down  by  the  ECJ  in  its  recent  judgments.  The 
following aspects seem to be particularly important in this context.  

First,  it  seems  clear  from  the  case-law  of  the  Court52  that  any  public-public  cooperation 
exempted from the application of the EU public procurement rules must remain purely public. 
The participation of private capital in one of the cooperating entities will therefore prevent the 
cooperation from being exempted as such from public procurement rules.  

Another element that seems to be important is the criterion of "limited market orientation" of 
the entities in question, as more recently developed by the ECJ53. If the entities concerned are 
market  oriented,  they  are  active  on  the  market  in  direct  competition  with  private  operators, 
pursuing  the  same  or  similar  commercial  objectives  and  using  the  same  instruments. 
Cooperation which is exempt from the procurement rules and aimed at fulfilling a public task 
should  in  principle  not  include  such  entities.  In-house  providers  with  a  market  orientation 
might also give rise to competition and State aid concerns. 

Lastly,  the  type  of  connection  between  the  cooperating  entities  needs  to  be  addressed.  In 
institutionalised cooperation, it is the presence of a (joint) in-house control that could lead to 
exempting  from  its  scope  even  an  agreement  that  would  normally  be  covered  by  the 
procurement  regime.  In  the  absence  of  such  control,  and  in  order  to  distinguish  non-
institutionalised cooperation from a normal public contract, it seems to be important that the 
former should involve mutual rights and obligations going beyond the "performance of a task 
against  remuneration"  and  that  the  principal  aim  of  the  cooperation  is  not  of  a  commercial 
nature. 

Questions: 

52 
53 

Case Case C-26/03., Stadt Halle. 
Case C-573/07, SEA, point 73. The requirements in judgement C-480/06, that the cooperation must be 
"governed solely by considerations and requirements relating to the pursuit of objectives in the public 
interest  and  that  the  principle  of  equal  treatment  of  the  persons  concerned  is  respected  points  in  the 
same direction. 

EN 

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30. 

31. 

32. 

33. 

In the light of the above, do you consider it useful to establish legislative rules at EU 
level regarding the scope and criteria for public-public cooperation?  

Would you agree that a concept with certain common criteria for exempted forms of 
public-public  cooperation  should  be  developed?  What  would  in  your  view  be  the 
important elements of such a concept? 

Or would you prefer specific rules for different forms of cooperation, following the 
case-law of the ECJ (e.g. in-house and horizontal cooperation)? If so, please explain 
why and which rules they should be. 

Should  EU  rules  also  cover  transfers  of  competences?  Please  explain  the  reasons 
why. 

2.4. 

Appropriate tools for aggregation of demand / Joint procurement 

One  of  the  issues  where  stakeholders  often  deplore  what  they  see  as  the  insufficiency  of 
instruments  at  EU  level  is  the  issue  of  aggregation  of  demand/  coordination  of  public 
procurement between contracting authorities.  

Those  who  are  in  favour  of  such  aggregation  of  demand  highlight  the  considerable  positive 
effects  for  suppliers  and  contracting  authorities,  which  include:  economies  of  scale,  lower 
production  costs  at  the  benefit  of  undertakings  and  European  taxpayers,  increased  buying 
power on the part of public authorities and a possibility for them to pool skills and expertise 
and  to  share  the  procurement  related  costs  and  risks.  The  sharing  of  costs  and  risks  in 
particular  would  also  facilitate  strategic  procurement  of  new,  innovative  products  and 
services, thereby encouraging the development of new products and markets54. 

Especially  cross-border  cooperation  between  contracting  authorities  from  different  Member 
States  could  contribute  to  the  further  integration  of  procurement  markets,  encouraging  the 
defragmentation  of  European  markets  across  national  borders  and  thereby  creating  a  viable, 
internationally competitive European industrial base.  

The  current  Directives  already  provide  a  number  of  tools  for  the  aggregation  of  demand, 
including the central purchasing bodies55. There are other instruments that are not specifically 
designed for aggregating demand, but may be used for this purpose, such as the possibility of 
concluding  framework  contracts  to  which  several  contracting  authorities  participate.  Of 
course,  contracting  authorities  can  also  coordinate  their  procurement  activities  by  simply 
sharing their experiences or coordinating certain phases of the procurement procedure. 

However, there is a need for a discussion of the recurring request for more specific EU-level 
instruments  to  aggregate  demand,  in  particular  cross-border  joint  procurement.  Such 
instruments  and  mechanisms  would  have  to  strike  the  right  balance  between  allowing  a 
stronger  aggregation  of  demand  in  strategic  sectors,  and  not  restricting  competition  in 
procurement markets (in particular to the detriment of SMEs), e.g. by dividing contracts into 
lots. 

54 

55 

This  is why  the  "Innovation Union"  flagship  initiative  - SEC(2010) 1161) - which  seeks  to  re-launch 
European  innovation  and  research  policies  as  part  of  the  Europe  2020  Strategy,  also  calls  for  an  EU 
initiative on joint procurement.  
Cf. Article 1 par. 10 of Directive 2004/18/EC. 

EN 

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As regards cross-border joint public procurement, there might be additional legal issues to be 
addressed,  such  as:  identifying  which  national  legislation  is  applicable  to  the  public 
procurement  procedure  and  to  the  contract,  the  ability  of  contracting  authorities  to  use 
national legislation other than their own, deciding on the competent body and the applicable 
rules for reviewing procurement decisions, etc. 

Questions: 

34. 

35. 

36. 

37. 

38. 

In  general,  are  you  in  favour  of  a  stronger  aggregation  of  demand/more  joint 
procurement? What are the benefits and/or drawbacks in your view?  

Are  there  in  your  view  obstacles  to  an  efficient  aggregation  of  demand/joint 
procurement?  Do  you  think  that  the  instruments  that  these  Directives  provide  for 
aggregating demand (central purchasing bodies, framework contracts) work well and 
are  sufficient?  If  not,  how  should  these  instruments  be  modified?  What  other 
instruments or provision would be necessary in your view? 

Do you think that a stronger aggregation of demand/ joint procurement might involve 
certain  risks  in  terms  of  restricting  competition  and  hampering  access  to  public 
contracts by SMEs? If so, how could possible risks be mitigated?  

Do  you  think  that  joint  public  procurement  would  suit  some  specific  product  areas 
more than others? If yes, please specify some of these areas and the reasons.  

Do  you  see  specific  problems  for  cross  border  joint  procurement  (e.g.  in  terms  of 
applicable  legislation  and  review  procedures)?  Specifically,  do  you  think  that  your 
national  law  would  allow  a  contracting  authority  to  be  subjected  to  a  review 
procedure in another Member State? 

2.5. 

Address concerns relating to contract execution  

Apart  from  requiring  prior  transparency  for  contract  execution  clauses  (indication  in  the 
contract notice or the specifications), the current Directives do not regulate the execution of 
the  contract.  However,  certain  problems  occurring  during  the  contract  execution  phase  can 
have serious consequences as regards non-discrimination between bidders and in terms of the 
soundness  of  public  purchasing  in  general.  The  question  arises  as  to  whether  the  EU  rules 
should  provide  for  specific  regulatory  instruments  that  might  allow  contracting  to  deal  with 
these problems more effectively. 

Substantial modifications 

A  particularly  complex  issue  is  the  problem  of  subsequent  developments  which  have  an 
impact on the contract itself or its execution. 

According  to  the  case-law  of  the  ECJ,  amendments  to  the  provisions  of  a  public  contract 
during its currency require a new contract award procedure, if they are materially different in 
character from the original contract56.  

56 

See  judgments  of  5.10.2000  in  Case  C-337/98  Commission  v  France,  paragraphs  44  and  46,  of 
19.6.2008 in Case C-454/06 pressetext Nachrichtenagentur, paragraphs 34-37 and of 13.4.2010 in Case 
C-91/08, Wall AG, paragraphs 37. 

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24 

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The ECJ has already provided some pointers as to when amendments should be considered as 
material. This is notably the case where they introduce conditions which would have allowed 
the participation or the success of other tenderers, if they considerably extend the scope of the 
contract  or  if  they  change  the  economic  balance  of  the  contract.57  However,  contracting 
authorities have indicated that, for certain types of amendments, the case-law does not appear 
to be sufficiently clear in terms of establishing whether a new tender procedure is needed.  

The present consultation seeks to establish whether a legal clarification at EU level is needed 
to  set  out  the  conditions  under  which  a  modification  of  the  contract  requires  a  new  tender 
procedure.  Such  a  clarification  could  also  tackle  the  possible  consequences  of  such 
modifications  (e.g.  provide  for  a  lighter  procurement  procedure  for  tendering  the  amended 
contract)58.  

Questions:  

39. 

40. 

Should  the  public  procurement  Directives  regulate  the  issue  of  substantial 
modifications  of  a  contract  while  it  is  still  in  force?  If  so,  what  elements  of 
clarification would you propose?  

Where a new competitive procedure has to be organised following an amendment of 
one or more essential conditions would the application of a more flexible procedure 
be justified? What procedure might this be? 

Changes concerning the contractor and termination of contracts 

Complex  questions  also  arise  from  changes  concerning  the  chosen  contractor  itself. 
According to ECJ case-law, the substitution of a new contractual partner for the one to which 
the  contracting  authority  had  initially  awarded  the  contract  constitutes  a  substantial 
modification, and therefore requires a new award, unless that substitution was provided for in 
the terms of the initial contract, for instance, by inserting a provision for subcontracting. This 
does  not  apply,  however,  in  cases  where  a  contract  is  transferred  to  another  contractor 
belonging  to  the  same  group  as  part  of  an  internal  reorganization.59  On  the  other  hand,  in 
exceptional situations a change of subcontractor may be considered a material amendment to 
the contract, even if the possibility of a change is provided for in the contract terms.60 

Stakeholders' experience furthermore suggests that not only the substitution of the contractor 
by  another  legal  entity,  but  also  changes  in  its  status,  can  have  a  significant  impact  on  the 
contractual  balance  or  sound  execution  (e.g.  incidents  impacting  on  the  capacity  to  execute 
the contract, such as bankruptcy, crucial experts leaving the firm etc.).  

Again, there should be a discussion to ascertain whether EU-level instruments are needed to 
help contracting authorities address these situations in an appropriate manner, e.g. a right for 

57 
58 

59 
60 

See judgment pressetext Nachrichtenagentur, paragraphs 35-37. 
A  solution  for  some  specific  changes  is  already  provided  today  in  Article  31(4)  of  Directive 
2004/18/EC, allowing the use of the negotiated procedure without prior publication for the execution of 
additional works or services under certain circumstances. 
Judgment pressetext Nachrichtenagentur, paragraph 40. 
See judgment Wall AG, paragraph 39. 

EN 

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contracting authorities to terminate the contract in the event of major changes relating to the 
contractor, and/or a new simplified procedure to replace the former contractor in such cases61. 

Such an explicit possibility for contracting authorities to terminate the contract might also be 
required for cases where the ECJ declares that a specific contract has been awarded in breach 
of  EU  public  procurement  rules.  Even  though  Member  States  are  obliged  to  terminate 
contracts which have been awarded in breach of EU rules62, some national legislations do not 
provide  for  any  right  of  cancellation  of  such  contracts,  which  makes  it  difficult  -  if  not  de 
facto impossible - for contracting authorities to take the appropriate measures to comply with 
ECJ judgments in infringement cases.  

Questions: 

41. 

42. 

Do you think that EU rules on changes in the context of the contract execution would 
have  an  added  value?  If  so,  what  would  be  the  added  value  of  EU-level  rules?  In 
particular, should the EU rules make provision for the explicit obligation or right of 
contracting  authorities  to  change  the  supplier/  terminate  the  contract  in  certain 
circumstances? If so, in which circumstances? Should the EU also lay down specific 
procedures on how the new supplier must/ may be chosen?  

Do  you  agree  that  the  EU  public  procurement  Directives  should  require  Member 
States to provide in their national law for a right to cancel contracts that have been 
awarded in breach of public procurement law? 

More  generally,  national  regulation  on  the  implementation  of  contracts  is  quite  detailed  in 
many  Member  States  and  can  be  a  source  of  administrative  burden  (e.g.  rules  on  execution 
guarantees, delivery conditions, delays, pricing of adjustments, etc.). The number of national 
rules  in  this  field  could  possibly  be  reduced  by  introducing  common  standards  for  certain 
aspects at EU level. 

Question:  

43. 

Do  you  think  that  certain  aspects  of  the  contract  execution  –  and  which  aspects  - 
should be regulated at EU level? Please explain. 

Subcontracting 

The  existing  legislation  contains  only  very  limited  rules  on  subcontracting.  Article  25  of 
Directive  2004/18/EC  provides  that  contracting  authorities  may  oblige  the  tenderer  to  give 
indications  on  envisaged  subcontracting.  However,  under  ECJ  case-law,  a  tenderer  is  in 
principle entitled to have recourse to subcontractors for the performance of the contract, even 
if  this  means  that  a  large  part  of  the  contract  or  the  entire  contract  is  performed  by 
subcontractors.  Subcontracting  of  essential  parts  of  the  contract  may  only  be  restricted  or 
prohibited in cases where the contracting authority was not in a position to verify the technical 
and economic capacities of the subcontractors. 

61 

62 

Such  a  procedure  might  also  provide  intermediary  solutions  such  as  the  possibility  to  mandate  the 
second best of the original tender procedure or to reopen competition only between the tenderers having 
participated  in  the  original procedure, provided  that  the  former  procedure  did  not  take  place  too  long 
ago. 
See Case C-503/04, Commission / Germany. 

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Some  stakeholders  are  calling  for  stronger  restrictions  on  subcontracting  in  order  to  allow 
contracting authorities to exert more influence on the performance of the contract. They are 
advocating,  for  instance,  the  possibility  to  exclude  subcontracting  completely  or  at  least  for 
essential parts of the contract, or to restrict it to a certain share percentage of the contract or 
provide for a general right for the contracting authority to reject proposed subcontractors. 

Question: 

44. 

Do  you  think  that  contracting  authorities  should  have  more  possibilities  to  exert 
influence  on  subcontracting  by  the  successful  tenderer?  If  yes,  which  instruments 
would you propose? 

3. 

A MORE ACCESSIBLE EUROPEAN PROCUREMENT MARKET 

One  of  the  foremost  objectives  of  EU  public  procurement  legislation  is  to  enable  economic 
operators  to  compete  effectively  for  public  contracts  in  other  Member  States.  Considerable 
success has been achieved in this regard since the introduction of the first public procurement 
Directives in the 1970s. Nevertheless, there still seems to be some room for improvement to 
create  a  true  European  procurement  market  that  is  fully  accessible  to  all  European 
undertakings.  This  concerns,  in  particular,  better  access  for  SMEs  and  more  competitive 
procurement markets generally. 

Question: 

45. 

Do  you  think  that  the  current  Directives  allow  economic  operators  to  avail 
themselves  fully  of  procurement  opportunities  within  the  Internal  Market?  If  not: 
Which provisions do you consider are not properly adapted to the needs of economic 
operators and why?  

3.1. 

Better access for SMEs and Start-ups  

The  purpose  of  the  Public  Procurement  Directives  is  to  open  up  the  public  procurement 
market for all economic operators, regardless of their size. However, special attention needs 
to  be  paid  to  the  issue  of  access  to  those  markets  by  small  and  medium-sized  enterprises 
(SMEs)63.  

SMEs are regarded as the backbone of the EU economy, and they have a huge potential for 
job  creation,  growth  and  innovation.  Easy  access  to  procurement  markets  can  help  them  to 
unlock this growth and innovation potential, while having a positive impact on the European 
economy. Moreover, a strong involvement by SMEs in public purchasing allows contracting 
authorities to considerably broaden the potential supplier base, with positive effects of higher 
competition for public contracts and as a counterbalance to dominant market players.  

In  order  to  make  public  procurements  of  all  sizes  as  accessible  as  possible  to  SMEs,  the 
Commission  published  in  2008  the  "European  Code  of  Best  Practices  facilitating  access  by 

63 

See also the request of the European Parliament that the Commission should make more efforts in order 
to  facilitate  access  by  SMEs  to  procurement  markets  in  the  Report  on  new  developments  in  public 
procurement (2009/2175(INI)).  

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SMEs  to  public  procurement  contracts"64.  The  Code  highlights  and  develops  a  number  of 
practices within the EU regulatory framework which optimise tenders for the participation of 
SMEs and ensure equal chances for this bidder group. 

A recent study commissioned by the European Commission65 reveals that, between 2006 and 
2008, the proportion of SMEs amongst companies which won public contracts above the EU 
thresholds was between 58% and 61% in the EU-27. In terms of estimated total contract value 
secured,  SMEs  accounted  for  between  31%  and  38%  of  public  procurement  while  their 
overall share in the economy, as calculated on the basis of their combined turnover is 52%.  

Against this background, it is worth analysing whether it is necessary to envisage legislative 
measures  at  EU  level  to  ensure  that  contracting  authorities  take  full  advantage  of  the 
economic and innovative potential of SMEs in their procurement dealings.  

Reducing administrative burdens in the selection phase 

Feedback from small and medium-sized economic operators suggests that the major obstacles 
to SME participation in public tenders are to be found in the selection phase. On the one hand 
this relates to the evidence that has to be provided. The large number of certificates that are 
often required at the selection phase entails an administrative burden which may be difficult 
for SMEs to cope with, especially in a cross-border context when the certificates even have to 
be translated. On the other hand, the selection criteria themselves are often set so high (e.g. 
turnover requirements or number of required reference contracts) that it is virtually impossible 
for SMEs to fulfil them. 

On the first issue (evidence for selection criteria), a solution that is often proposed could be to 
generally  allow  undertakings  to  submit  only  a  summary  of  the  relevant  information  for 
selection and/or provide self-declarations on the fulfilment of the selection criteria as a first 
step.  In  principle,  only  the  successful  tenderer  or  the  tenderers  admitted  to  the  award  phase 
would  then  be  asked  to  submit  actual  supporting  documents  (certificates).  However,  the 
contracting  authority  would  have  the  possibility  to  request  the  documents  at  any  moment 
during  or  even  after  the  procurement  procedure  for  fraud  prevention  purposes.  This  would 
reduce the administrative burden, particularly for small and medium sized enterprises, without 
compromising the guarantees for making sound choices. 

On  the  second  issue  (excessively  demanding  selection  criteria),  there  might  be  a  case  for 
introducing  into  the  EU  rules  a  cap  on  certain  requirements  for  qualitative  selection, 
especially on financial standing. This could avoid contracting authorities setting excessively 
demanding  selection  criteria  (e.g.  on  turnover)  which  inevitably  exclude  SMEs.  Such  a 
measure would further develop the already existing obligation to apply proportionate selection 
criteria.  On  the  other  hand,  it  would  restrict  the  freedom  of  the  contracting  authorities  to 
determine  which  standards  they  deem  necessary  to  ensure  that  the  contract  is  implemented 
properly. 

Other suggestions 

64 
65 

Commission Staff Working Document SEC(2008) 2193. 
Evaluation  of  SMEs’  access  to  public  procurement  markets  in  the  EU  (2009  update),  produced  in 
September 2010. Commissioned by Directorate General of Enterprise and Industry. Consultant: GHK.  

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Stakeholders have also sometimes suggested introducing measures of positive discrimination 
in relation to SMEs, such as advance fixing of procurement  quotas  reserved exclusively for 
SMEs. Unlike some of our trading partners who have introduced such measures, the EU is not 
in  favour  of  reserving  markets  to  specific  undertakings.  Such  actions  would  also  be  in 
contradiction with the principle of equal treatment of tenderers, a fundamental pillar of the EU 
public procurement regime anchored by the Court of Justice in the Treaty freedoms.  

However,  internal  administrative  measures  encouraging  contracting  authorities  to  do  their 
utmost to improve access by SMEs to their public contracts could be a viable possibility. One 
idea,  for  instance,  might  be  to  set  targets  for  SME  shares  in  overall  procurement.  Such  a 
system  would  not  involve  reserving  specific  contracts  for  SMEs,  but  they  would  simply 
provide an incentive for contracting authorities to make the best possible use of the available 
instruments for SME-friendly procurement. 

Another option would be to allow contracting authorities to require the successful tenderer to 
subcontract  a  given  share  of  the  contract  value  to  third  parties.  Such  an  obligation  already 
exists  under  Directive  2004/18/EC  for  public  works  concessions  (Article  60)  and  under 
Directive 2009/81/EC on procurement in the fields of defence and security (Article 21).  

Questions: 

46. 

47. 

48. 

49. 

50. 

51. 

Do you think that the EU public procurement rules and policy are already sufficiently 
SME-friendly?  Or,  alternatively,  do  you  think  that  certain  rules  of  the  Directive 
should be reviewed or additional measures be introduced to foster SME participation 
in public procurement? Please explain your choice.  

Would you be of the opinion that some of the measures set out in the Code of Best 
Practices should be made compulsory for contracting authorities, such as subdivision 
into lots (subject to certain caveats)? 

Do you think that the rules relating to the choice of the bidder entail disproportionate 
administrative burdens for SMEs? If so, how could these rules be alleviated without 
jeopardizing  guarantees  for  transparency,  non-discrimination  and  high-quality 
implementation of contracts? 

Would  you  be  in  favour  of  a  solution  which  would  require  submission  and 
verification of evidence only by short-listed candidates/ the winning bidder?  

Do you think that self-declarations are an appropriate way to alleviate administrative 
burdens with regard to evidence for selection criteria, or are they not reliable enough 
to replace certificates? On which issues could self-declarations be useful (particularly 
facts in the sphere of the undertaking itself) and on which not?  

Do  you  agree  that  excessively  strict  turnover  requirements  for  proving  financial 
capacity  are  problematic  for  SMEs?  Should  EU  legislation  set  a  maximum  ratio  to 
ensure  the  proportionality  of  selection  criteria  (for  instance:  maximum  turnover 
required  may  not  exceed  a  certain  multiple  of  the  contract  value)?  Would  you 
propose  other  instruments  to  ensure  that  selection  criteria  are  proportionate  to  the 
value and the subject-matter of the contract? 

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52. 

What are the advantages and disadvantages of an option for Member States to allow 
or  to  require  their  contracting  authorities  to  oblige  the  successful  tenderer  to 
subcontract a certain share of the main contract to third parties? 

3.2. 

Ensuring fair and effective competition  

Public  procurers  often  buy  on  markets  with  anti-competitive  market  structures66.  On  such 
markets, the aim of public procurement rules - namely open and effective competition - may 
be  difficult  to  achieve  by  simply  applying  the  procedural  rules  provided  for  by  the  current 
Directives. Procurement decisions which are taken without regard to market structures, even 
if they are fully in line with the rules of the Directives, entail the risk of consolidating or even 
aggravating  anti-competitive  structures.  This  is  particularly  true  in  cases  of  high  contract 
values and in sectors where public authorities are the main clients and private demand is not 
big enough to compensate the impact of the public authorities' purchases on the market.  

Intelligent  procurement  aimed  at  maximizing  competition  in  such  markets  would  require  in 
the  first  place  that  procurers  are  aware  of  the  structure  of  the  markets  in  question. 
Furthermore, they would have to adapt their procurement strategies (design of contracts and 
procedural choices) accordingly. For instance, contracting authorities should avoid tendering 
contracts which can only be executed by one or a small number of market player(s), as this 
would solidify oligopolistic structures and make new market entries almost impossible. In the 
worst  case,  the  contracting  authority  would  end  up  with  one  dominant  supplier  who  could 
dictate contract terms and prices. 

The  right  shape  of  contracts  obviously  depends  on  the  structure  of  the  relevant  market.  If 
smaller competitors on the market are able to deliver the service or products in question on a 
smaller  scale,  efficient  ways  to  maximise  competition  may  include  reducing  the  volume  / 
duration of contracts. Efficient competition could also be achieved by splitting contracts into 
lots, possibly accompanied by a maximum number of lots that can be awarded to one bidder. 
If there are not enough competitors amongst the smaller firms, an alternative way to ensure 
efficient competition might be to group several purchases into one contract, in order to attract 
potential competitors from other Member States.  

A  number  of  other  instruments  are  often  mentioned  as  useful  safeguards  for  efficient 
competition  in  procurement  markets,  which  could  be  introduced  at  EU  level  as  optional 
choices  for  Member  States  or  contracting  authorities.  As  mentioned  above,  less  demanding 
selection criteria will normally increase the number of valid bids67. Disadvantageous contracts 
imposed  by  dominant  suppliers  can  be  prevented  by  the  prior  definition  of  a  maximum 
reserve price, above which the contract is not awarded, or by the possibility of cancelling the 
procedure if only the offer(s) of one bidder passes the selection stage.  

More generally, measures aimed at facilitating the participation of bidders from other Member 
States  should  also  be  considered,  wherever  possible.  As  already  highlighted,  there  is 

66 

67 

The  waste  disposal  market  is  in  many  Member  States  dominated  by  one  or  two  big  players.  The 
construction sector is, at least concerning large infrastructure projects, oligopolistic and prone to cartel-
building. Other examples are IT-supply, the electricity market in certain Member States, as illustrated 
by the Article 30 decisions concerning the electricity market in Czech Republic, Spain and Italy, and the 
market  for  certain  postal  services  in  a  number  of  Member  States,  as  illustrated  by  the  Article  30 
decisions concerning the postal sector in Sweden, Finland and Austria. 
Lower  turnover  requirements  facilitate  the  participation  of  smaller  firms,  lower  requirements 
concerning previous experience favour new market entries, etc. 

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considerable untapped potential for increasing intra-European trade in public procurement in 
order  to  create  a  truly  European  procurement  market.  This  would  multiply  business 
opportunities for European undertakings and at the same time increase the potential supplier 
base for contracting authorities. Measures to facilitate cross-border participation may include 
a better mutual recognition of certificates (or even putting in place a common European pre-
qualification system). Some stakeholders even suggest that, for certain high-value contracts, 
drawing  up  tender  specifications  in  a  second  language  or  accepting  tenders  in  foreign 
languages might be helpful. Using a system of automatic translation – at least for preliminary 
information purposes - for certain steps of the procedure might also be considered. 

All  measures  aiming  at  enhancing  competition  in  procurement  markets  presuppose  that 
contracting  authorities  have  a  good  knowledge  of  the  markets  on  which  they  purchase  (e.g. 
via studies on the structure and shape of the targeted market prior to the actual procurement). 
Putting these (or other) safeguards into practice would require an additional effort on the part 
of contracting authorities, which would probably only be justified for large contracts with a 
considerable potential impact on the market structure.  

Questions: 

53. 

54. 

55. 

56. 

57. 

58. 

Do  you  agree  that  public  procurement  can  have  an  important  impact  on  market 
structures and that procurers should, where possible, seek to adjust their procurement 
strategies in order to combat anti-competitive market structures? 

Do you think that European public procurement rules and policy should provide for 
(optional) instruments to encourage such pro-competitive procurement strategies? If 
so, which instruments would you suggest? 

In  this  context,  do  you  think  more  specific  instruments  or  initiatives  are  needed  to 
encourage  the  participation  of  bidders  from  other  Member  States?  If  so,  please 
describe them. 

Do  you  think  the  mutual  recognition  of  certificates  needs  to  be  improved?  Would 
you be in favour of creating a Europe-wide pre-qualification system?  

How  would  you  propose  to  tackle  the  issue  of  language  barriers?  Do  you  take  the 
view that contracting authorities should be obliged to draw up tender specifications 
for  high-value  contracts  in  a  second  language  or  to  accept  tenders  in  foreign 
languages? 

What  instruments  could  public  procurement  rules  put  in  place  to  prevent  the 
development  of  dominant  suppliers?  How  could  contracting  authorities  be  better 
protected against the power of dominant suppliers?  

Preventing anti-competitive behaviours 

A  related  issue  is  the  problem  of  anti-competitive  behaviours  in  procurement  markets. 
Procurement markets seem to be particularly prone to collusive behaviours of the participants 

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(bid-rigging,  market  sharing…)68,  amongst  other  factors,  because  of  the  stability  and 
predictability  of  public  demand.  Some  analysts  also  consider  that  the  transparency  of  the 
process is actually conducive to cartel-building.  

Even though the number of violations of competition law in public procurement procedures is 
far from marginal69, the current EU public procurement rules do not specifically address this 
issue. So far, the view has been that the problem could be handled efficiently on the basis of 
the  current  rules,  e.g.  by  providing  guidance  to  procurement  agents  on  how  to  prevent  and 
detect collusive behaviours.  

However,  there  should  be  a  debate  as  to  whether  such  guidance  is  sufficient  to  combat 
collusion  efficiently  in  procurement  markets,  or  whether  specific  legislative  instruments  are 
needed,  such  as:  stricter  debarment  in  case  of  bid-rigging;  the  possibility  of  not  disclosing 
certain  information  or  the  obligatory  use  of  the  negotiated  procedure  in  sectors  with  a  high 
probability  of  cartel-building;  the  use  of  Certificates  of  Independent  Bid  Determination; 
obligations for procurers to consult competition authorities in cases of suspicious patterns in 
bids, etc.  

Experience also suggests that it might be useful to make certain instruments which present a 
particular  risk  of  being  misused  for  collusion  more  "collusion-proof".  For  instance, 
subcontracting certain parts of the contract is a popular way for the winning bidder to reward 
cartel members for abiding by the cartel agreement. One possible way to address this problem 
could be to forbid, under certain conditions, subcontracting to undertakings which participated 
themselves in the tender procedure70.  

It  is  clear  that  additional  guarantees  against  anti-competitive  behaviours  could  contribute  to 
maintaining  sound  competition  in  procurement  markets.  Again,  this  advantage  must  be 
carefully  weighed  against  the  additional  administrative  burdens  that  such  rules  would  entail 
for procurers and undertakings. 

Question:  

59. 

Do you think that stronger safeguards against anti-competitive behaviours in tender 
procedures should be introduced into EU public procurement rules? If so, which new 
instruments/provisions would you suggest?  

3.3. 

Procurement in the case of non-existent competition/exclusive rights 

In  practice,  contracting  authorities  often  need  to  purchase  from  one  specific  economic 
operator because that undertaking holds exclusive rights on the production of the goods or the 
provision of  the services in question. In such  cases,  normal  competition  for the  contracts in 
question  is  ruled  out.  This  is  why  the  public  procurement  Directives  allow  the  use  of  the 
negotiated  procedure  without  prior  publication  in  cases  where,  "for  technical  or  artistic 

68 

69 

70 

See also the extensive work of the OECD, for instance the guidelines for fighting bid-rigging in public 
procurement: 
http://www.oecd.org/document/29/0,3343,en_2649_40381615_42230813_1_1_1_1,00.html 
For some "famous" cartels in public procurement markets, cf. for example the "Lunch coupons case" in 
Italy, or the French case "Lycées de l'Ile-de-France". 
Participation  of  bidders  because  of  risks  of  collusion  can  however  only  be  restricted  under  relatively 
narrow conditions, cf. the judgement of the ECJ of 19 May 2009 in case C-538/07, Assitur (concerning 
temporary groups of undertakings).  

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reasons  or  reasons  connected  with  the  protection  of  exclusive  rights,  the  contract  may  be 
awarded only to a particular economic operator"71. 

It is true that, due to the existence of the exclusive right, a call for tenders would be a pure 
formality without any practical value. It is undeniable however, that the access to the public 
contract  in  question  has  been  locked  by  the  prior  award  of  the  exclusive  right,  thus 
eliminating any possibility of competition before the procurement process has even started.  

The  question  of  how  the  exclusive  right  itself  has  been  awarded,  and  in  particular  whether 
there  has  been  fair  competition  at  the  stage  of  the  award  of  the  exclusive  right  (which  pre-
empts  the  later  procurement  decision),  is  not  addressed  in  the  current  public  procurement 
Directives as far as contracts awarded to private operators are concerned. 

The issue is dealt with only in the context of public-public cooperation, where public service 
contracts between contracting authorities are excluded from the application of the Directive if 
they  are  awarded  on  the  basis  of  an  exclusive  right  –  but  only  under  the  condition  that  this 
exclusive right is compatible with the principles of the Treaty.72  

This specific provision will probably no longer be needed once an overall solution is found to 
the issues related to public-public cooperation. It should however be considered whether, for 
the sake of sound competition in procurement markets, there should be a generalisation of the 
underlying  idea  of  this  Article.  This  principle  would  only  allow  contracts  to  be  awarded 
without a competitive procedure on the basis of exclusive rights, if these exclusive rights have 
also been subject to a competitive procedure. 

Questions: 

60. 

61. 

In  your  view,  can  the  attribution  of  exclusive  rights  jeopardise  fair  competition  in 
procurement markets? 

If so, what instruments would you suggest in order to mitigate such risks / ensure fair 
competition? Do you think that the EU procurement rules should allow the award of 
contracts without procurement procedure on the basis of exclusive rights only on the 
condition that the exclusive right in question has itself been awarded in a transparent, 
competitive procedure? 

4. 

STRATEGIC USE OF PUBLIC PROCUREMENT IN RESPONSE TO NEW CHALLENGES  

Public authorities can make an important contribution to the achievement of the Europe 2020 
strategic goals73, by using their purchasing power to procure goods and services with higher 
"societal"  value  in  terms  of  fostering  innovation,  respecting  the  environment  and  fighting 
climate  change,  reducing  energy  consumption,  improving  employment,  public  health74  and 
social  conditions,  and  promoting  equality  while  improving  inclusion  of  disadvantaged 

71 
72 
73 
74 

Article 31(1)(b) of Directive 2004/18/EC. 
Article 18 of Directive 2004/18/EC. 
See Communication from the Commission of 3 March 2010 - COM(2010) 2020. 
See Council Conclusions of 13 September 2010 on the lessons learned from the A/H1N1 pandemic. 

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groups75.  Significant  demand  from  public  authorities  for  "greener",  low-carbon  more 
innovative  and  socially  responsible  goods  and  services  can  also  shape  production  and 
consumption  trends  for  the  years  to  come.  Of  course,  addressing  societal  challenges  should 
not  decrease  the  efficiency  of  public  procurement.  Taking  into  account  policy  related 
considerations  in  public  procurement  should  be  done  in  a  way  so  as  to  avoid  creating 
disproportionate  additional  administrative  burdens  for  contracting  authorities  or  distorting 
competition in procurement markets. 

There are two possible ways to use public procurement in order to achieve the Europe 2020 
policy objectives:  

provide  contracting  authorities  with  the  wherewithal  to  take  into  account  those 

° 
objectives under procedural public procurement rules ("how to buy");  

impose mandatory requirements on contracting authorities or provide for incentives to 

° 
steer their decisions as to which goods and services should be procured ("what to buy"). 

The  public  procurement  Directives  provide  a  common  framework  for  public  purchases  by 
laying  down  procedural  rules  on  "how  to  buy",  and  leave  the  contracting  authorities  free  in 
their basic decision of "what to buy", to define the characteristics of the works,  products or 
services  that  best  fit  their  needs  and  to  put  in  place  the  conditions  which  are  the  most 
appropriate  for  their  desired  policy  objectives  (as  long  as  they  are  transparent  and  non-
discriminatory).  

EU  public  procurement  legislation  also  allows  incentives  for  procurement  in  line  with  the 
Europe  2020  objectives,  or  the  imposition  of  obligations  on  the  contracting  authorities  on 
"what  to  buy",  either  at  European  or  at  national  level,  to  ensure  that  public  procurement 
strategies are consistent with overall policy objectives.  

A range of policy specific initiatives have already been launched in the recent years, both at 
European and at national level, to encourage the use of public procurement in support of the 
above  outlined  policy  objectives,  such  as  the  ongoing  work  on  promoting  Green  public 
procurement (GPP)76, on social considerations in public procurement77 and on innovation78.  

75 

76 

77 

78 

Such a reflection is notably in line with Article 9 TFEU which calls on the Union to take into account 
the  promotion  of  a  high  level  of  employment,  the  guarantee  of  an  adequate  social  protection  and  the 
fight against social exclusion. 
Cf. Commission Communication "Public Procurement for a Better Environment" - COM(2008) 400 - 
that  set  targets  for  the  uptake  of  GPP  in  Member  States  and  started  the  process  of  development  of 
common  voluntary  European  GPP  criteria.  Cf.  also  the  "Handbook  on  Environmental  Public 
Procurement (Buying Green)", http://ec.europa.eu/environment/gpp/guideline_en.htm. 
Cf.  the  handbook  “Buying  social  –  A  Guide  to  Taking  Account  of  Social  Considerations  in  Public 
Procurement” - SEC(2010) 1258.  
Following  the  "Innovation  Union"  communication  commitment  n°  17,  the  European  Commission  is 
currently monitoring a study (starting November 2010 - ending November 2011) that intends to develop 
a new support mechanism for procurement of innovation. This scheme will provide guidance and set up 
a  (financial)  support  mechanism  to  help  contracting  authorities  to  implement  these  procurements  in  a 
non-discriminatory  and  open  manner,  to  pool  demand,  to  draw  up  common  specifications,  and  to 
promote  SME  access.  On  pre-commercial  procurement,  cf.  the  Commission  communication  "Pre-
commercial  procurement:  Driving  innovation  to  ensure  sustainable  high  quality  public  services  in 
Europe - COM(2007) 799. 

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In particular, Green Public Procurement (GPP) has been practised in Member States for more 
then a decade. Most Member States have adopted National Action Plans for GPP (NAPs) with 
voluntary  or  mandatory  targets  and  specific  measures  to  promote  and  implement  GPP.  The 
EU has developed GPP criteria for 18 product and service groups79; further ones will follow.  

The following section will discuss whether and what changes to EU public procurement rules 
are  needed  to  ensure  the  coherence  and  appropriateness  of  the  various  measures  that  are  or 
could be taken at EU and national level. 

4.1. 

"How to buy" in order to achieve the Europe 2020 objectives 

Considerations  relating  to  environmental  protection,  social  inclusion  or  promotion  of 
innovation  may  be  relevant  at  different  stages  of  the  procurement  procedure,  depending  on 
their nature. Not all of the different considerations relating to these policy objectives can be 
taken  into  account  at  every  stage.  The  following  section  will  discuss  how  each  of  the 
individual  policy  objectives  could  be  taken  into  account  at  the  successive  stages  of  a 
procurement procedure.  

Describing the subject matter of the contract and the technical specifications 

Under the current EU public procurement rules, contracting authorities have to ensure a clear 
and  non-discriminatory  description  of  the  subject-matter  of  the  contract  and  they  have  to 
define  technical  specifications  which  must  not  have  the  effect  of  favouring  certain 
undertakings.  

Requirements in respect of process and production methods must relate to the manufacturing 
of  the  product  and  contribute  to  its  characteristics,  without  necessarily  being  visible.  Under 
the current rules it is not possible to require process and production methods that do not relate 
to the manufacturing of the product and are not reflected in the characteristics of the product.  

Public authorities and stakeholders sometimes claim that, for environmental and health related 
reasons, certain products would necessarily have to be or ought to be sourced locally. In this 
context  it  should  be  emphasized  that  such  requirements  infringe  EU  law  if  they  result  in 
unjustified direct or indirect discriminations between suppliers. They can only be justified in 
exceptional cases where legitimate and objective needs that are not related to purely economic 
considerations can only be met by products from a certain region.  

Questions: 

62. 

63. 

79 

Do you consider that the rules on technical specifications make sufficient allowance 
for the introduction of considerations related to other policy objectives? 

Do  you  share  the  view  that  the  possibility  of  defining  technical  specifications  in 
terms of performance or functional requirements might enable contracting authorities 
to  achieve  their  policy  needs  better  than  defining  them  in  terms  of  strict  detailed 
technical requirements? If so, would you advocate making performance or functional 
requirements mandatory under certain conditions? 

Cf. Commission Communication "Public Procurement for a Better Environment" - COM(2008) 400 - 
that  set  targets  for  the  uptake  of  GPP  in  Member  States  and  started  the  process  of  development  of 
common  voluntary  European  GPP  criteria.  Cf.  also  the  "Handbook  on  Environmental  Public 
Procurement (Buying Green)", http://ec.europa.eu/environment/gpp/guideline_en.htm. 

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64. 

65. 

66. 

67. 

68. 

By way of example, do you think that contracting authorities make sufficient use of 
the  possibilities  offered  under  Article  23  of  Directive  2004/18/EC  concerning 
accessibility80  criteria  for  persons  with  disabilities  or  design  for  all  users?  If  not, 
what needs to be done? 

Do  you  think  that  some  of  the  procedures  provided  under  the  current  Directives81 
(such as the competitive dialogue, design contests) are particularly suitable for taking 
into account environmental, social, accessibility and innovation policies?  

What  changes  would  you  suggest  to  the  procedures  provided  under  the  current 
Directives  to  give  the  fullest  possible  consideration  to  the  above  policy  objectives, 
whilst  safeguarding  the  respect  of  the  principles  of  non-discrimination  and 
transparency ensuring a level playing field for European undertakings? Could the use 
of  innovative  information  and  communication  technologies  specifically  help 
procurers in pursuing Europe 2020 objectives? 

Do you see cases where a restriction to local or regional suppliers could be justified 
by  legitimate  and  objective  reasons  that  are  not  based  on  purely  economic 
considerations? 

Do you think that allowing the use of the negotiated procedure with prior publication 
as  a  standard  procedure  could  help  in  taking  better  account  of  policy-related 
considerations, such as environmental, social, innovation, etc.? Or would the risk of 
discrimination and restricting competition be too high? 

Requiring the most relevant selection criteria 

When  assessing  the  candidates'  ability  to  perform  the  contract,  contracting  authorities  may 
take  into  account  specific  experience  and  competence  relating  to  social  or  environmental 
aspects that are relevant to the subject matter of the contract.  

Question: 

69. 

What  would  you  suggest  as  useful  examples  of  technical  competence  or  other 
selection criteria aimed at fostering the achievement of objectives such as protection 
of  environment,  promotion  of  social  inclusion,  improving  accessibility  for  disabled 
people and enhancing innovation? 

Using the most appropriate award criteria 

In  order  to  ensure  effective  competition  between  economic  operators  and  avoid  arbitrary 
decisions  by  public  authorities,  the  current  EU  public  procurement  rules  require  that  award 
criteria  must  be  linked  to  the  subject-matter  of  the  contract,  may  not  confer  an  unrestricted 
freedom of choice on the contracting authority, and must be expressly mentioned in the tender 
documents.  

Contracting  authorities  are  free  to  decide  the  relative  weighting  to  be  given  to  each  of  the 
criteria  used  to  identify  the  most  economically  advantageous  tender.  This  allows  them  to 

80 
81 

Accessibility in this context means accessibility by persons with functional limitations (disabilities). 
For the description of the procedures, please refer to section 2.1 above. 

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reflect in the evaluation the importance they wish to attach to environmental or social criteria 
compared to the other criteria, including price.  

For  standard  goods  and  services,  it  is  already  in  many  cases  possible  to  set  high 
environmental  or  social  standards  in  technical  specifications  or  contract  performance 
conditions  while  awarding  the  contract  on  the  criterion  of  the  lowest  price.  In  this  way, 
contracting authorities can obtain products and services complying with high standards at the 
best price.  

However,  using  criteria  that  relate  to  the  environment,  energy  efficiency,  accessibility  or 
innovation  in  the  award  phase  rather  than  only  in  the  technical  specifications  or  as  contract 
performance conditions can have the benefit of prompting companies to submit bids that go 
further than the level set in the technical specifications and thereby promote the introduction 
of innovative products on to the market. It could also be useful to apply such criteria in the 
award phase in cases where there is uncertainty as to the products or services available on the 
market.  

Questions: 

70. 

The criterion of the most economically advantageous tender seems to be best suited 
for pursuing other policy objectives. Do you think that, in order to take best account 
of such policy objectives, it would be useful to change the existing rules (for certain 
types of contracts/ some specific sectors/ in certain circumstances): 

70.1.1.  to eliminate the criterion of the lowest price only; 

70.1.2.  to limit the use of the price criterion or the weight which contracting authorities can 

give to the price; 

70.1.3.  to introduce a third possibility of award criteria in addition to the lowest price and the 
economically most advantageous offer? If so, which alternative criterion would you 
propose  that  would  make  it  possible  to  both  pursue  other  policy  objectives  more 
effectively  and  guarantee  a  level  playing  field  and  fair  competition  between 
European undertakings? 

71. 

72. 

73. 

Do  you  think  that  in  any  event  the  score  attributed  to  environmental,  social  or 
innovative  criteria,  for  example,  should  be  limited  to  a  set  maximum,  so  that  the 
criterion does not become more important than the performance or cost criteria? 

Do you think that the possibility of including environmental or social criteria in the 
award phase is understood and used? Should it in your view be better spelt out in the 
Directive?  

In  your  view,  should  it  be  mandatory  to  take  life-cycle  costs  into  account  when 
determining the economically most advantageous offer, especially in the case of big 
projects?  In  this  case,  would  you  consider  it  necessary/appropriate  for  the 
Commission services to develop a methodology for life-cycle costing?  

Imposing proper contract performance clauses  

Under the current EU public procurement rules, contract performance clauses must be linked 
to the tasks which are necessary for the production and the provision of the goods or services 

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37 

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purchased. Such conditions relating to the performance of the contract may take into account 
other  policy  considerations,  such  as  social  and  environmental  issues82.  The  latter  could  for 
instance  consist  in  requiring  emissions  offsetting  for  specific  purchased  supplies  with  a 
significant  carbon  footprint.  Some  Member  states  have  experience  when  procuring  taxi  or 
other transport services in requiring that the vehicles used for these services are vehicles from 
the top most  efficient classes. Contract performance clauses could also be used to stimulate 
innovation  during  the  execution  of  the  contract,  e.g.  by  providing  incentives  to  further 
develop the products or services during the performance of the contract. 

At this stage, contracting authorities can impose certain obligations on the successful tenderer 
which  relate  to  achieving  different  environmental  or  social  objectives,  and  which  cannot  be 
reflected in the earlier stages of the procurement procedure 

Questions: 

74. 

75. 

76. 

Contract  performance  clauses  are  the  most  appropriate  stage  of  the  procedure  at 
which  to  include  social  considerations  relating  to  the  employment  and  labour 
conditions of the workers involved in the execution of the contract. Do you agree? If 
not, please suggest what might be the best alternative solution. 

What kind of contract performance clauses would be particularly appropriate in your 
view  in  terms  of  taking  social,  environmental  and  energy  efficiency  considerations 
into account? 

Should  certain  general  contract  performance  clauses,  in  particular  those  relating  to 
employment  and  labour  conditions  of  the  workers  involved  in  the  execution  of  the 
contract, be already specified at EU level?  

Verification of the requirements 

Contracting authorities could specify environmental or social requirements when drawing up 
the  technical  specifications  or  devising  selection/award  criteria  or  introducing  contract 
performance  clauses.  In  such  cases,  they  will  normally  draw  up  a  list  of  particulars 
(certification/documentation  and  or  specific  commitment)  to  be  submitted  by  candidates  or 
tenderers  so  as  to  demonstrate  that  they  are  able  to  meet  the  environmental  or  social 
requirements. Under the current rules, specific certification schemes (e.g. forest certification 
schemes,  social  certificates,  etc.)  may  be  accepted  as  a  possible  means  of  proof,  but 
equivalent means must also be accepted. A general problem that arises in public procurement 
is  how  to  verify  these  requirements  in  the  supply  chain.  The  issue  of  verification  is 
particularly relevant in cases where part of the supply chain is located in a third country. 

When  examining  requests  to  participate  and  offers,  the  contracting  authority  will  check 
whether the information and documentation supplied by candidates or tenderers conforms to 
the  requirements.  If  required  particulars  are  missing,  or  if  the  information  provided  is 
considered unsatisfactory, the candidate or tenderer will be excluded from the procedure. 

Questions: 

82 

See Article 26 of Directive 2004/18/EC.  

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38 

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77. 

78. 

Do you think that the current EU public procurement framework should provide for 
specific  solutions  to  deal  with  the  issue  of  verification  of  the  requirements 
throughout the supply chain? If so, which solutions would you propose to tackle this 
issue? 

How could contracting authorities best be helped to verify the requirements? Would 
the  development  of 
schemes  and 
documentation,  as  well  as  labels  facilitate  their  work?  When  adopting  such  an 
approach, what can be done to minimise administrative burdens? 

"standardised"  conformity  assessment 

Link with the subject matter/ with the execution of the contract 

As previously indicated, in the current EU public procurement legal framework the link with 
the subject-matter of the contract is a fundamental condition that has to be taken into account 
when introducing into the public procurement process any considerations that relate to other 
policies.  This  is  true  throughout  the  successive  stages  of  the  procurement  process  and  for 
different  aspects  (technical  specifications,  selection  criteria,  award  criteria).  In  the  case  of 
contract execution clauses, what is required is that there should be a link with the performance 
of the tasks necessary for the production/provision of the goods/services being tendered.  

Relaxation  of  this  requirement  might  enable  public  authorities  to  go  further  in  pursuing 
Europe  2020  policy  objectives  through  public  procurement.  Among  others,  it  would  allow 
contracting authorities to influence the behaviour of undertakings regardless of the product or 
service  purchased,  e.g.  in  order  to  encourage  more  environmental  responsibility  or  greater 
attention to corporate social responsibility. This could be a powerful instrument in support of 
Europe 2020 policy objectives. 

However, when considering such a possibility, the trade-offs with other policy considerations 
must be carefully assessed. The link with  the subject-matter of the contract ensures that the 
purchase  itself  remains  central  to  the  process  in  which  taxpayers'  money  is  used.  This  is  an 
important guarantee to ensure that contracting authorities obtain the best possible offer with 
efficient  use  of  public  monies.  As  explained  above,  this  objective  is  also  highlighted  in  the 
Europe  2020  strategy,  which  stresses  that  public  procurement  policy  must  ensure  the  most 
efficient use of public funds. At the same time, this guarantee of purchases at the best price 
ensures a measure of consistency between EU public procurement policy and the rules in the 
field  of  State  aid,  as  it  makes  sure  that  no  undue  economic  advantage  is  conferred  on 
economic  operators  through  the  award  of  public  contracts.  Loosening  the  link  with  the 
subject-matter of the contract might therefore entail a risk of distancing the application of EU 
public procurement rules from that of the State aid rules, and may eventually run counter to 
the objective of more convergence between State aid rules and public procurement rules. 

The  link  with  the  subject  matter  can  also  help  avoid  a  situation  where  some  economic 
operators  from  a  particular  country  might  potentially  be  favoured  to  the  detriment  of  those 
from other Member States. While this is particularly relevant for some types of considerations 
(for  example,  some  social  requirements)  because  they  are  more  likely  to  be  rooted  in  the 
national, regional or even local realities, it is also true for other policy considerations such as 
environmental  issues.  For  example,  in  the  case  of the  supply of goods,  the requirement that 
the office buildings used by the tenderers be exclusively heated by solar power could favour 
undertakings from Member States with specific meteorological conditions favourable to solar 
technology. 

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39 

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The link between policy related considerations and the subject matter of the contract is also 
intended  to  ensure  certainty  and  predictability  for  enterprises.  Otherwise,  in  the  absence  of 
such a link (and of harmonised requirements at EU level), economic operators might be asked 
to  comply  with  different  requirements  (with  regard  to  the  percentage  of  women,  number  of 
unemployed people recruited, child care facilities available for employees, environmental or 
waste management measures, eco-labels, etc.) for every procurement or for each contracting 
authority.  

Meeting  the  different  requirements  imposed  by  the  contracting  authorities  might  be 
particularly  difficult  for  SMEs,  as  they  may  not  have  the  necessary  economic  and  human 
resources to fulfil a wide variety of societal requirements on a case-by-case basis. 

Finally,  requirements  unrelated  to  the  product  or  service  purchased  could  go  against  the 
Europe 2020 objective of promoting innovation, as competition between undertakings would 
no longer take place on the grounds of developing the best (possibly innovative) product or 
service, but on the basis of corporate policy. 

Questions: 

79. 

80. 

81. 

82. 

Some  stakeholders  suggest  softening  or  even  dropping 
that 
requirements  imposed  by  the  contracting  authority  must  be  linked  to  the  subject 
matter  of  the  contract  (this  could  make  it  possible  to  require,  for  instance,  that 
tenderers have a gender-equal employment policy in place or employ a certain quota 
of  specific  categories  of  people,  such  as  jobseekers,  persons  with  disabilities,  etc.). 
Do  you  agree  with  this  suggestion?  In  your  view,  what  could  be  the  advantages  or 
disadvantages of loosening or dropping the link with the subject matter? 

the  condition 

If the link with the subject matter is to be loosened, which corrective mechanisms, if 
any, should be put in place in order to mitigate the risks of creating discrimination 
and of considerably restricting competition? 

Do  you  believe  that  SMEs  might  have  problems  complying  with  the  various 
requirements? If so, how should this issue be dealt with in your view?  

If you believe that the link with the subject matter should be loosened or eliminated, 
at which of the successive stages of the procurement process should this occur? 

82.1.  Do  you  consider  that,  in  defining  the  technical  specifications,  there  is  a  case  for 
relaxing  the  requirement  that  specifications  relating  to  the  process  and  production 
methods must be linked to the characteristics of the product, in order to encompass 
elements that are not reflected in the product's characteristics (such as for example - 
when buying coffee - requesting the supplier to pay the producers a premium to be 
invested  in  activities  aimed  at  fostering  the  socio-economic  development  of  local 
communities)?  

82.2.  Do  you  think  that  EU  public  procurement  legislation  should  allow  contracting 
authorities to apply selection criteria based on characteristics of undertakings that are 
not  linked  to  the  subject  of  the  contract  (e.g.  requiring  tenderers  to  have  a  gender-
equal employment policy in place, or a general policy of employing certain quotas of 
specific categories of people, such as jobseekers, persons with disabilities, etc.)? 

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40 

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82.3.  Do  you  consider  that  the  link  with  the  subject  matter  of  the  contract  should  be 
loosened or eliminated at the award stage in order to take other policy considerations 
into account (e.g. extra points for tenderers who employ jobseekers or persons with 
disabilities)? 

82.3.1.  Award  criteria  other  than  the  lowest  price/  the  economically  most  advantageous 
tender/  criteria  not  linked  to  the  subject-matter  of  the  contract  might  separate  the 
application of the EU public procurement rules from that of the State aid rules, in the 
sense that contracts awarded on the basis of other than economic criteria could entail 
the  award  of  State  aids,  potentially  problematic  under  EU  State  aid  rules.  Do  you 
share this concern? If so, how should this issue be addressed? 

82.4.  Do  you  think  that  the  EU  public  procurement  legislation  should  allow  contracting 
authorities  to  impose  contract  execution  clauses  that  are  not  strictly  linked  to  the 
provision of the goods and services in question (e.g. requiring the contractor to put in 
place child care services for the his employees or requiring them to allocate a certain 
amount of the remuneration to social projects)? 

4.2. 

"What to buy" in support of Europe 2020 policy objectives  

Another way of achieving policy objectives through public procurement could be to impose 
on contracting authorities obligations on "what to buy". For example, this could be done by 
imposing  mandatory  requirements  or  criteria  governing  the  characteristics  of  the  goods  or 
services  to  be  provided  (e.g.  maximum  levels  for  energy  and  resource  use,  environmental 
harmful  substances,  minimum  levels  of  recycling),  or  alternatively  by  setting  targets  (e.g. 
60% of public purchases must be environmentally friendly)83. 

Recent European sector specific legislation at EU level has: 

•  introduced  obligations  on  contracting  authorities  to  require  in  their  public  contracts  a 

certain level of energy efficiency 84; 

•  introduced  obligations  on  contracting  authorities  to  take  energy  or  other  environmental 

impacts into account in their public procurement decisions85; 

•  called on the public sector to play an exemplary role in the field of energy efficiency by 
adopting a minimum number of energy efficient procurement measures86 and by promoting 
resource-efficient  public  buildings  (e.g.  buildings  with  low  or  zero  primary  energy 
consumption87). 

83 

84 
85 
86 
87 

For  instance  in  the  field  of  green  public  procurement,  several  Member  States,  like  the  Netherlands, 
Finland, Slovenia, Austria, or Belgium have set ambitious green public procurement targets at national 
level. 
Regulation (EC) No 106/2008 (OJ L39, 13.2.2008, p. 1) (so called EU Energy Star Regulation). 
Directive 2009/33/EC on promotion of clean and energy-efficient vehicles. 
Directive 2006/ 32/ EC on energy end-use efficiency and energy services. 
Directive  2009/28/EC  on  the  promotion  of  the  use  of  energy  from  renewable  sources  (OJ  L  140, 
5.6.2009,  p.  16),  and  Directive  2010/31/EU  on  the  energy  performance  of  buildings  (OJ  L  153, 
18.06.2010, p. 13).  

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41 

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•  called on contracting authorities to endeavour to procure only such products which belong 

to the highest energy efficiency class88. 

In its recent communication "Energy 2020 – A strategy for competitive, and sustainable and 
secure energy"89, the Commission stated that energy criteria (regarding efficiency, renewables 
and  smart  networking)  should  be  used  in  all  public  procurement  of  works,  services  or 
supplies. 

For  products,  a  monetisation  methodology  such  as  that  developed  for  the  Clean  Vehicle 
Directive90  could  also  be  used  more  widely.  Indeed,  the  obligation  to  include  lifetime 
operational cost into the purchase decision for products and services (along the lines of what 
is already required for vehicles) may ensure lower overall costs. This would however require 
identifying a general methodology that could be applicable across all product groups. 

More  generally,  introducing  mandatory  requirements  into  EU  public  procurement  rules  by 
means  of  legislation  based  on  delegated  acts  has  been  advocated  as  a  further  means  of 
promoting innovation or other policy objectives within the Europe 2020 strategy91. 

As regards social inclusion, the new European Disability Strategy 2010-202092 indicates that 
the  Commission  will  explore  the  merits  of  adopting  regulatory  measures  to  ensure 
accessibility  of  products  and  services,  including  measures  to  step  up  the  use  of  public 
procurement. 

Imposing such obligations can be a very effective instrument for achieving the Europe 2020 
policy  objectives,  by  fostering  the  market  uptake  of  goods  and  services  of  a  high  societal 
value. Moreover, centralising the decisions on purchasing strategies can avoid fragmentation 
of procurement policies and increase predictability, to the benefit of economic operators. For 
example, in the field of Green Public Procurement, diverging approaches by Member States 
on  GPP  may  lead  to  problems  for  suppliers,  especially  for  SMEs,  who  have  to  adapt  to 
different  frameworks  in  different  countries,  thus  complicating  the  development  and  sale  of 
green products and services. 

On  the  other  hand,  some  concerns  have  been  raised  with  regard  to  imposing  obligations  on 
what to buy.  

One important aspect to be considered is the risk that the introduction of such obligations may 
lead  to  discrimination  or  restrict  competition  in  procurement  markets,  possibly  resulting  in 
fewer bidders and higher prices, which might be problematic in times of economic difficulties 
and budgetary restraints in many Member States. To mitigate this risk, the requirements and 
criteria  imposed  must  be  objective  and  non  discriminatory,  and  should  be  used  only  when 
there is sufficient EU-wide market development to ensure effective competition. It should also 

88 

89 
90 

91 

92 

Directive  2010/30/EU  on  the  indication  by  labelling  and  standard  product  information  of  the 
consumption of energy and other resources by energy-related products (OJ L 153, 18.6.2010, p. 6) 
COM(2010)639. 
To  support  the  implementation  of  the  obligation,  stemming  from  this  Directive,  to  take  into  account 
lifetime  costs,  a  Clean  Vehicle  Portal  has  been  developed  by  the  Commission,  which  provides  all 
information  necessary  for  the  monetisation  of  the  lifetime  cost  addressed  by  the  Directive: 
http://www.cleanvehicle.eu/; http://ec.europa.eu/transport/urban/vehicles/directive/directive_en.htm. 
Report  from  Mario  Monti  to  the  President  of  the  European  Commission  of  9  May  2010,  "A  new 
strategy for the Single Market", point 3.4, p. 78.  
COM(2010) 636. 

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42 

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be  taken  into  account  that  some  requirements  for  higher  environmental  protection  may 
nevertheless  lead  in  the  mid  or  long-term  to  savings  in  economic  terms  (e.g.  in  the  field  of 
energy-efficiency). 

Some types of obligations may have a bigger impact on competition in procurement markets 
than others. 

–  Technical  specifications  in  terms  of  performance  requirements  are  likely  to  have  a  less 
limiting effect on competition than detailed specifications on the technical characteristics 
of the goods to be procured.  

–  Mandatory prescriptions on the technical characteristics of the goods to be procured could 
considerably  reduce  choice  and  competition  in  procurement  markets,  or  even  eliminate 
them altogether, whereas mandatory provisions concerning the decision as to which of the 
various  award  criteria  should  be  taken  into  account  (for  example  energy  efficiency,  life-
cycle  costing,  accessibility)  would  probably  have  less  limiting  effects  on  competition  in 
procurement markets.  

Another effect of imposing "what to buy" obligations on contracting authorities is that their 
room for manoeuvre in the procurement procedures is reduced. This may affect their capacity 
to  procure  goods  and  services  that  are  perfectly  adapted  to  meet  the  specific  needs  of  the 
individual contracting authorities. This risk might be mitigated by setting the obligation at an 
adequate level. 

It is also argued that centrally imposed obligations on what to buy would create an additional 
administrative  burden  for  contracting  authorities  and  economic  operators,  such  as  an 
increased  workload  to  verify  that  undertakings  meet  the  requirements.  Additional  education 
and  adequate  training  as  well  as  devoted  tools93  could  help  contracting  authorities  cope 
efficiently  with  this  workload.  Moreover,  standardised  requirements  at  EU  level  e.g.  to  buy 
from the top performance classes of labelled products could eliminate the need for contracting 
authorities  to  possess  specific  technical  knowledge  when  drawing  up  specifications,  thus 
simplifying in certain cases the task of taking such criteria into account at local, regional and 
national level. 

A  less  far-reaching  solution  would  be  to  provide  incentives  for  the  procurement  of  certain 
types  of  goods  or  services,  but  not  impose  it.  Such  incentives  could  consist  in  financial 
advantages  for  contracting  authorities  procuring  environmentally-friendly,  socially  inclusive 
or  innovative  goods  and  services,  mechanisms  for  the  exchange  of  best  practices  between 
contracting  authorities  or  other  support  mechanisms  for  contracting  authorities  wishing  to 
pursue Europe 2020 objectives through their procurement. 

Questions: 

83. 

Do you think that EU level obligations on "what to buy" are a good way to achieve 
other  policy  objectives?  What  would  be  the  main  advantages  and  disadvantages  of 
such an approach? For which specific product or service areas or for which specific 
policies do you think obligations on "what to buy" would be useful? Please explain 
your choice. Please give examples of Member State procurement practices that could 
be replicated at EU level. 

93 

Such as the abovementioned Clean Vehicle Portal. 

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43 

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84. 

85. 

86. 

Do  you  think  that  further  obligations  on  "what  to  buy"  at  EU  level  should  be 
enshrined  in  policy  specific  legislation  (environmental,  energy-related,  social, 
accessibility,  etc)  or  be  imposed  under  general  EU  public  procurement  legislation 
instead? 

Do you think that obligations on "what to buy" should be imposed at national level? 
Do  you  consider  that  such  national  obligations  could  lead  to  a  potential 
fragmentation of the internal market? If so, what would be the most appropriate way 
to mitigate this risk? 

Do you think that obligations on what to buy should lay down rather obligations for 
contracting authorities as regards the level of uptake (e.g. of GPP), the characteristics 
of the goods/services/works they should purchase or specific criteria to be taken into 
account as one of a number of elements of the tender?  

86.1.  What  room  for  manoeuvre  should  be  left  to  contracting  authorities  when  making 

purchasing decisions?  

86.2. 

Should  mandatory  requirements  set  the  minimum  level  only  so  the  individual 
contracting authorities could set more ambitious requirements? 

87. 

88. 

89. 

In  your  view,  what  would  be  the  best  instrument  for  dealing  with  technology 
development  in  terms  of  the  most  advanced  technology  (for  example,  tasking  an 
entity  to  monitor  which  technology  has  developed  to  the  most  advanced  stage,  or 
requiring contracting authorities to take the most advanced technology into account 
as one of the award criteria, or any other means)? 

The  introduction  of  mandatory criteria or mandatory targets on  what to buy should 
not  lead  to  the  elimination  of  competition  in  procurement  markets.  How  could  the 
aim of not eliminating competition be taken into account when setting those criteria 
or targets?  

Do  you  consider  that  imposing  obligations  on  "what  to  buy"  would  increase  the 
administrative burden, particularly for small businesses? If so, how could this risk be 
mitigated?  What  kind  of  implementation  measures  and/or  guidance  should 
accompany such obligations? 

90. 

If  you  are  not  in  favour  of  obligations  on  "what  to  buy",  would  you  consider  any 
other instruments (e.g. recommendations or other incentives) to be appropriate?  

4.3. 

Innovation 

Europe has huge and untapped potential to drive innovation through public procurement and 
at the same time to encourage cross-border competition, promote a low-carbon economy and 
achieve  best  value  for  money  for  public  authorities.  Public  procurement  of  innovative 
products and services is crucial to improve the quality and efficiency of public services at a 
time of budget constraints.  

The  current  EU  Directives  on  public  procurement  adopt  a  flexible  approach  which  enables 
contracting  authorities  to  make  use  of  innovation-oriented  tendering,  which  can  encourage 
industry to find new advanced solutions. 

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Design contests94 enable contracting authorities to acquire plans or designs in fields such as 
architecture, engineering or data processing: under such a procedure participants are asked to 
propose projects outside of the strict terms of reference; they are therefore free to put forward 
innovative ideas that may be used in a future procurement procedure. 

In case of particularly complex contracts, where contracting authorities consider that the use 
of  the  open  or  restricted  procedure  will  not  allow  the  award  of  the  contract,  the  Directive 
provides  for  another  procedure,  the  competitive  dialogue95.  In  this  procedure  contracting 
authorities  can  engage  in  a  dialogue  with  candidates  to  identify  and  define  the  means  best 
suited to satisfying the needs of the contracting authority. Participants are required to propose 
ideas and solutions which are discussed with the contracting authorities.  

The aim of the current EU public procurement rules is to protect innovative solutions, even if 
they  are  not  embodied  in  intellectual  property  rights.  Proposed  solutions  and  other 
confidential information may not be communicated by the contracting authorities to the other 
participants without the agreement of the bidder96. 

Nevertheless,  "cherry  picking"  of  intellectual  property  rights  or  of  innovative  solutions 
themselves has been raised as an issue of concern, particularly with regard to the competitive 
dialogue:  if  a  participant  discloses  the  unique  features  of  its  solution,  these  may  become 
known to the other candidates. While the current rules require that such information must be 
kept confidential, the contracting authority is nevertheless in a bind between the obligation to 
protect  the  confidential  information  and  the  need  to  disclose  some  information  in  order  to 
identify solutions which are best suited to satisfying its needs. Contracting authorities might 
be tempted to put pressure on tenderers to agree to disclosure. Moreover, the fact that the best 
solution  (the  one  chosen  by  the  contracting  authority)  is  inevitably  presented  to  all  the 
participants, who are then invited to submit their tenders on the basis of this solution, may be 
a  disincentive  for  participants  to  propose  highly  innovative  solutions,  as  they  are  not  sure 
whether  they  will  be  "rewarded"  for  inventing  this  solution  by  the  award  of  the  actual 
contract. 

When  preparing  a  call  for  tenders,  contracting  authorities  may  also  decide  to  authorise 
tenderers to submit variants. In such a case, goods or services may be offered which do not 
correspond  to  those  identified  by  the  contracting  authority,  but  which  meet  the  minimum 
technical requirements contained in the tender documents. The opportunity to submit tenders 
that  differ  from  the  technical  specifications  initially  set  out  by  the  contracting  authorities 
encourages  economic  operators  to  propose  more  innovative  services  or  products.  This  may 
stimulate  research  into  new  technologies  and  allow  users  to  take  advantage  of  technical 
progress.  

Another  important  way  to  stimulate  innovation  is  for  contracting  authorities  to  request  the 
development  of  products  or  services  that  are  not  yet  available  on  the  market.  Under  the 
current  legal  framework,  this  can  be  done  via  what  is  known  as  "pre-commercial 

94 
95 

96 

See Articles 66 to 74 of Directive 2004/18/EC. 
See  Article  29  of  Directive  2004/18/EC  and  recital  31  of  Directive  2004/18/EC.  The  competitive 
dialogue  is  not  provided  for  under  Directive  2004/17/EC.  However,  there  is  nothing  to  prevent  a 
contracting authority which has opted for a negotiated procedure with prior call for competition from 
stipulating in the specifications that the procedure will be as laid down in Directive 2004/18/EC for the 
competitive dialogue. 
Article  29(3)  of  Directive  2004/18/EC.  Such  guarantee  is  a  further  rule  added  to  the  confidentiality 
clause of Article 6 of that Directive. 

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procurement"97,  consisting  of  the  procurement  of  research  and  development  services  for  the 
development of new solutions98, with a view to the possible purchase of the final product or 
service through a normal public procurement procedure at a later stage. This approach enables 
public  authorities  to  share  the  risks  and  benefits  of  designing,  prototyping  and  testing  a 
limited volume of new products and services with suppliers, without involving State aid.  

Pre-commercial  procurement  can  help contracting authorities to make radical improvements 
to  the  quality  and  efficiency  of  public  services,  by  creating  lead-markets  and  triggering  the 
development  of  new  breakthrough  solutions  that  can  address  public  sector  challenges  for 
which there are no ready-made products and services available yet on the market. 

Despite  these  different  possibilities  to  foster  innovation  through  public  procurement, 
stakeholders  claim  that  too  little  public  procurement  in  Europe  is  aimed  at  innovation.  This 
might be due to a range of factors, such as: wrong incentives that favour low-risk solutions; a 
lack of knowledge and capabilities regarding successful procurement of new technologies and 
innovations;  a  disconnection  between  public  procurement  and  policy  objectives  and  lack  of 
strategic approach. Hence, in response to an identified need for guidance, a debate is needed 
on how the application of the public procurement rules and possible further measures could 
help contracting authorities foster innovation. Particular attention should be paid to measuring 
performance, as this plays a key role in evaluating effect of public procurement on innovation, 
improving performance and achieving the actual goal of innovation.  

Questions: 

91. 

92. 

93. 

94. 

Do  you  think  there  is  a  need  for  further  promote  and  stimulate  innovation  through 
public  procurement?  Which  incentives/measures  would  support  and  speed  up  the 
take-up of innovation by public sector bodies?  

Do you think that the competitive dialogue allows sufficient protection of intellectual 
property rights and innovative solutions, such as to ensure that the tenderers are not 
deprived of the benefits from their innovative ideas?  

Do  you  think  that  other  procedures  would  better  meet  the  requirement  of 
strengthening  innovation  by  protecting  original  solutions?  If  so,  which  kind  of 
procedures would be the most appropriate? 

In  your  view,  is  the  approach  of  pre-commercial  procurement,  which  involves 
contracting authorities procuring R&D services for the development of products that 
are not yet available on the market, suited to stimulating innovation? Is there a need 
for further best practice sharing and/or benchmarking of R&D procurement practices 
used  across  Member  States  to  facilitate  the  wider  usage  of  pre-commercial 
procurement?  Might  there  be  any  other  ways  not  covered  explicitly  in  the  current 
legal  framework  in  which  contracting  authorities  could  request  the  development  of 
products or services not yet available on the market? Do you see any specific ways 

97 

98 

For  more  guidance  cf.  the  Commission  Communication  and  associated  staff  working  document  'Pre-
commercial  procurement:  Driving  innovation  to  ensure  sustainable  high  quality  public  services  in 
Europe'  -  COM(2007)  799  and  SEC  (2007)  1668.  For  more  information  on  latest  developments  and 
news on pre-commercial procurement: http://cordis.europa.eu/fp7/ict/pcp/home_en.html 
Procurement not covered by the EU public procurement Directives by virtue of Art. 16 (f) of Directive 
2004/18/EC. 

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that contracting authorities could encourage SMEs and start-ups to participate to pre-
commercial procurement? 

95. 

96. 

Are  other  measures  needed  to  foster  the  innovation  capacity  of  SMEs?  If  so,  what 
kind of specific measures would you suggest? 

What  kind  of  performance  measures  would  you  suggest  to  monitor  progress  and 
impact  of  innovative  public  procurement?  What  data  would  be  required  for  this 
performance  measures  and  how  it  can  be  collected  without  creating  an  additional 
burden on contracting authorities and /or economic operators? 

4.4. 

Social services 

Social  services  are  listed  in  Annex  II  B  of  Directive  2004/18/EC.  Therefore,  as  explained 
above,  contracts  for  social  services  with  a  value  above  the  thresholds  for  application  of  the 
Public Procurement Directives are subject to only a few specific rules of the Directives (those 
concerning  technical  specifications  and  the  publication  of  the  results  of  the  procurement 
procedure)  and  to  the  basic  principles  of  EU  law,  such  as  non-discrimination  and 
transparency99.  As  explained  above,  contracts  below  the  thresholds  are  only  subject  to  the 
basic principles of EU law - such as non-discrimination and transparency - if they present a 
cross-border interest.  

Therefore,  when  outsourcing  social  services  via  a  public  service  contract,  public  authorities 
already enjoy considerable latitude with regard to the procedures to be followed. Moreover, 
public  authorities  can 
the  quality, 
comprehensiveness and continuity of the service at stake, as well as requirements referring to 
users' involvement and participation in the service provision and evaluation or ensuring that 
service  providers  familiarize  themselves  with  the  local  context  when  carrying  out  the 
service100. 

introduce  requirements  concerning 

in  particular 

Nevertheless,  some  stakeholders  claim  that  adaptations  of  the  current  rules  are  needed  in 
order to take better account of the specificities of social services. There are in particular calls 
for higher thresholds for such services. It should be noted that, in the case of social services, 
an  increase  of  the  applicable  thresholds  would  not  result  in  a  restriction  of  coverage  and 
possible compensation requests under the GPA and other international agreements, since B-
services are not covered by these instruments.  

Questions: 

99 

100 

Social services figure among the services listed in Annex II B of Directive 2004/18/EC, to which only 
limited  rules  of  that  Directive  apply  (for  the  distinction  between  services  listed  in  Annex  II  A  and 
services listed in Annex II B, see Articles 20 and 21 of that Directive). 
Specific guidance on the application of public procurement rules to social services bearing in mind the 
wide  discretion  that  public  authorities  enjoy  in  this  field  has  been  provided  in  the  "Guide  to  the 
application  of  the  European  Union  rules  on  State  aid,  public  procurement  and  the  internal  market  to 
services  of  general  economic  interest  and,  in  particular,  to  social  services  of  general  interest" 
(SEC(2010)  1545)  which  updates  the  Commission  Staff  Working  Document  Frequently  Asked 
Questions concerning the application of public procurement rules to social services of general interest - 
SEC(2007) 1514, 20.11.2007. 

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97. 

Do  you  consider  that  the  specific  features  of  social  services  should  be  taken  more 
fully  into  account  in  EU  public  procurement  legislation?  If  so,  how  should  this  be 
done? 

97.1.  Do  you  believe  that  certain  aspects  concerning  the  procurement  of  social  services 
should be regulated to a greater extent at EU level with the aim of further enhancing 
the quality of these services? In particular: 

97.1.1.  Should the Directives prohibit the criterion of lowest price for the award of contracts 
/ limit the use of the price criterion / limit the weight which contracting authorities 
can give to the price / introduce a third possibility of award criteria in addition to the 
lowest price and the economically most advantageous offer? 

97.1.2.  Should  the  Directives  allow  the  possibility  of  reserving  contracts  involving  social 
services  to  non-profit  organisations  /  should  there  be  other  privileges  for  such 
organisations in the context of the award of social services contracts? 

97.1.3.  Loosening the award criteria or reserving contracts to certain types of organisations 
could prejudice the ability of procurement procedures to ensure acquisition of  such 
services  "at  least  cost  to  the  community"  and  thus  carry  the  risk  of  the  resulting 
contracts involving State aid. Do you share these concerns? 

97.2.  Do you believe that other aspects of the procurement of social services should be less 
regulated  (for  instance  through  higher  thresholds  or  de  minimis  type  rules  for  such 
services)?  What  would  be  the  justification  for  such  special  treatment  of  social 
services? 

5. 

ENSURING SOUND PROCEDURES 

The financial risks at stake and the close interaction between the public and the private sectors 
make  public  procurement  a  risk  area  for  unsound  business  practices,  such  as  conflict  of 
interest,  favouritism  and  corruption.  In  the  same  line  of  thinking,  the  Stockholm 
programme101  mentions  public  procurement  as  an  area  of  special  attention  in  the  context  of 
the fight against corruption.  

Effective  mechanisms  to  prevent  unsound  business  practices  in  public  procurement  are  not 
only  needed  in  order  to  ensure  fair  competition  on  an  equal  basis  and  to  guarantee  the 
efficient use of taxpayers' money, but they can also make a considerable contribution to the 
success of the overall fight against economic crime. 

The  requirements  set  out  in  the  Directives  on  the  transparency  of  the  procedure  in  order  to 
guarantee equal treatment of all bidders are already minimising the risks of unsound business 
practices. However, the current Directives do not include more specific rules to prevent and 
sanction conflicts of interest, and they have few specific rules for penalising favouritism and 
corruption  in  public  procurement.  These  issues  are  more  particularly  addressed  in  national 
legislation,  but  the  level  of  specific  safeguards offered  by  national  legislation  varies  greatly 
between Member States.  

101 

Council document 17024/09 adopted by the European Council on 10/11 December 2009. 

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Increasing  the  procedural  guarantees  against  unsound  business  practices  at  EU  level  could 
improve  the  European  common  standard  of  protection  against  such  practices,  increase  the 
overall  fairness  of  the  procedures  and  make  procurement  processes  less  vulnerable  to  fraud 
and  corruption.  However,  such  additional  guarantees  would  often  entail  additional 
administrative  burdens  for  procurers  and  undertakings,  and  their  added  value  in  the  fight 
against  unsound  business  practices  must  be  carefully  weighed  against  a  possible  negative 
impact on the overall objective of simplification of the procedures.  

5.1. 

Preventing conflicts of interest 

The  notion  of  conflict  of  interest  characterises  a  situation  where  persons  involved  in  the 
contract  award  decision  have  competing  professional  or  personal  obligations  or  personal  or 
financial  interests  which  could  make  it  difficult  for  them  to  fulfil  their  duties  fairly  and 
impartially,  or  where  a  person  is  in  a  position  to  influence  the  contracting  authority’s 
decision-making process in order to further his own interests. Such a conflict of interest does 
not  necessarily  lead  to  corruption,  but  it  may  lead  to  corrupt  conduct.  Identifying  and 
resolving conflicts of interest is therefore key to prevent fraud. It has to be emphasised that a 
conflict of interest constitutes, objectively and on itself a serious irregularity regardless of the 
intentions of the parties concerned and whether they were acting in good or bad faith.102 

There should be a debate about whether basic rules are needed at EU level, such as a common 
definition  of  unacceptable  conflict-of-interest  situations  and  some  safeguards  to  prevent  or 
resolve such situations.103 These safeguards could include requiring declarations of absence of 
conflict  of  interest  as  well  as  a  certain  degree  of  transparency  and  accountability  of 
procurement officials with regard to their personal situation, naturally in full compliance with 
data  protection  rules  and  standards.  For  instance,  EU  rules  could  make  it  mandatory  to 
disclose  the  names  of  the  members  of  the  evaluation  committee  to  a  control  body,  or 
introduce  a  requirement  for  the  contracting  authority  to  verify  that  there  are  no  conflicts  of 
interest when setting up the evaluation committee.  

Questions: 

98. 

99. 

102 

103 

Would  you  be  in  favour  of  introducing  an  EU  definition  of  conflict  of  interest  in 
public procurement? What activities/situations harbouring a potential risk should be 
interests  such  as  shareholdings, 
relationships,  business 
covered 
incompatibilities with external activities/ etc.)? 

(personal 

Do  you  think  that  there  is  a  need  for  safeguards  to  prevent,  identify  and  resolve 
conflict-of-interest situations effectively at EU level? If so, which kind of safeguards 
would you consider useful? 

See judgment of 15 June 1999 in Case T-277/97 Ismeri Europa Srl v Court of Auditors, paragraph 123, 
concerning the procurement rules by EU institutions. 
See,  for  instance,  the  rules  provided  for  procurement  by  EU  institutions:  Article  52  of  Council 
Regulation No 1605/2002 on the Financial Regulation applicable to the general budget of the European 
Communities, and the relevant case-law, notably judgments of 9 July 2002 in Case T-21/01 Zavvos v 
Commission, and of 17 March 2005 in Case T-160/03 AFCon Management Consultants v Commission. 

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5.2. 

Fighting favouritism and corruption 

Procurement  markets,  and  especially  major  works  projects,  are  often  considered  a  lucrative 
target for potential bribery. It should also be emphasized that the integrity of the process is not 
only endangered in the case of corruption, which is fairly obvious, but also more generally in 
all  cases  of  favouritism,  even  if  it  does  not  necessarily  involve  corrupt  conduct,  e.g. 
favouritism  shown  to  a  local  candidate.  The  most  common  corruption  scenarios  that  might 
occur  in  the  public  procurement  procedures  are  the  so-called  "kickback"  (i.e.  payment  of  a 
bribe as a reward for the official who influenced the procurement process), manipulation of 
tender documents to favour a specific bidder, and the use of front/intermediary companies to 
cover the illegal activities of the corrupt official. 

The procurement rules of many Member States contain mechanisms specifically designed to 
prevent and combat corruption and favouritism. In the same way as for the issue of conflict of 
interest,  an  analysis  must  be  made  as  to  whether  certain  specific  safeguards  should  be 
integrated  in  the  EU  public  procurement  legislation,  on  the  condition  of  not  creating 
disproportionate  administrative  burdens.  However,  it  should  be  borne  in  mind  not  only  that 
corruption is a highly sensitive issue for Member States but also that the actual problems in 
this  field  and  also  the  potential  solutions  depend  on  the  –  widely  diverging  –  national 
administrative and business cultures. Consequently, it might be difficult to find "one size fits 
all" solutions to be put in place at EU level. 

It is often proposed that corruption in public procurement should be tackled by increasing the 
level  of  transparency  concerning,  in  particular,  the  decisions  taken  by  procurement  officials 
throughout  the  procedure.  This  would  allow  candidates  and  possibly  the  general  public  to 
scrutinise  public  officials’  decisions  and  hence  act  as  an  efficient  instrument  against 
corruption. Such increased transparency could, for instance, be introduced for the opening of 
the bids or the compulsory publication of the reports documenting the procurement process. 
The additional administrative burden of such a measure would be fairly limited, as contracting 
authorities are already obliged to draw up these reports104. In the same way, the publication of 
concluded  contracts  (with  redacting  of  commercially  sensitive  information)  might  be 
conducive to better democratic scrutiny of procurement decisions.  

It could also be envisaged to develop specific tools, such as free phone or Internet based fraud 
notification systems to encourage participants or other persons to provide information about 
any  wrongdoing  or  irregularity.  The  contract  notice,  the  contracting  authority’s  website  and 
other  means  of  publication  could  include  references  to  such  a  system  through  which  the 
contracting authority or a supervising authority may receive information from anonymous or 
identified sources. 

The use of practices such as existing toolkits that enhance good, transparent management of 
the  whole  procurement  cycle  should  be  encouraged.  In  this  context  the  development  of  red 
flag  indicator  lists  for  contracting  authorities  could  be  useful,  despite  known  limitations105. 
Promoting clear rules on reporting requirements and on protection of whistleblowers might be 
helpful for the enforcement of more efficient reporting practices. The use of external monitors 
(e.g. governance experts, NGOs, etc) may add value to the internal control tools in assessing 
the performance of contractors, as well as detecting and reporting suspicious cases. 

104 
105 

Article 43 of Directive 2004/18/EC. 
World Bank Policy Research Paper no. 5243, 29 March 2010. 

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The  use  of  the  existing  evaluation  mechanisms  to  monitor  compliance  with  relevant 
international instruments comprising provisions on corruption in public procurement may also 
be considered106. 

Finally,  limiting  the  discretion  of  contracting  authorities  for  certain  aspects  might  make  it 
more difficult to put into practice decisions which are not justified on objective grounds and 
thereby prevent favouritism (for instance, limiting the discretion of contracting authorities for 
the annulment of procedures). However, such measures must not hamper the necessary room 
for  manoeuvre  that  contracting  authorities  require  in  order  to  purchase  goods  and  services 
adapted to their specific needs. 

Questions: 

100. 

101. 

Do you share the view that procurement markets are exposed to a risk of corruption 
and favouritism? Do you think EU action in this field is needed or should this be left 
to Member States alone? 

In your view, what are the critical risks for integrity at each of the different stages of 
the  public  procurement  process  (definition  of  the  subject-matter,  preparation  of  the 
tender, selection stage, award stage, performance of the contract)?  

102.  Which  of  the  identified  risks  should,  in  your  opinion,  be  addressed  by  introducing 
more  specific/additional  rules  in  the  EU  public  procurement  Directives,  and  how 
(which rules/safeguards)?  

103.  What additional instruments could be provided by the Directives to tackle organised 
crime in public procurement? Would you be in favour, for instance, of establishing 
an ex-ante control on subcontracting? 

5.3. 

Exclusion of "unsound" bidders 

Exclusion  of  bidders  that  are  guilty  of  corruption  and,  more  generally,  professional 
misconduct  ("debarment")  is  a  powerful  weapon  to  punish  –  and  also  to  a  certain  extent 
prevent – unsound business behaviours. Article 45 of Directive 2004/18/EC) already sets out 
an obligation to exclude bidders convicted of certain listed offences (notably corruption), as 
well as the possibility of excluding bidders for a number of other unsound business practices 
(including "grave professional misconduct").  

However,  a  number  of  questions  relating  to  the  scope,  interpretation,  transposition  and 
practical  application  of  this  provision  remain  open,  and  Member  States  and  contracting 
authorities have called for further clarification.  

It  should  be  examined  in  particular  whether  the  exclusion  grounds  in  Article  45  are 
appropriate,  sufficiently  clear  (notably  the  exclusion  ground  of  "professional  misconduct") 
and  exhaustive  enough,  or  if  further  exclusion  grounds  should  be  introduced.  Contracting 
authorities also seem to be faced with practical difficulties when trying to obtain all relevant 
information on the personal situation of tenderers and candidates established in other Member 
States and their eligibility according to their national law.  

106 

Notably  the  OECD  Convention  on  Combating  Bribery  of  Foreign  Public  Officials  in  International 
Business Transactions and the UN Convention against Corruption. 

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Furthermore,  the  scope  for  implementing  national  legislation  on  exclusion  grounds  will 
probably need to be clarified. Providing for Member States to introduce additional exclusion 
grounds in their national legislation might enable them to tackle specific problems of unsound 
business  behaviours  linked  to  the  national  context  more  effectively.  On  the  other  hand, 
specific  national  exclusion  grounds  always  entail  a  risk  of  discrimination  against  foreign 
bidders and could jeopardise the principle of a European level playing field.  

An  important  issue  on  which  the  current  EU  public  procurement  Directives  remain  silent  is 
what  are  referred  to  as  the  "self-cleaning"  measures,  i.e.  measures  taken  by  the  interested 
economic  operator  to  remedy  a  negative  situation  affecting  his/her  eligibility.  Their 
effectiveness  depends  on  their  acceptance  by  Member  States.  The  issue  of  "self-cleaning 
measures" stems from the need to strike a balance between the implementation of the grounds 
for exclusion and respect for proportionality and equality of treatment. The consideration of 
self-cleaning measures may help contracting authorities in carrying out an objective and fuller 
assessment  of  the  individual  situation  of  the  candidate  or  tenderer  in  order  to  decide  its 
exclusion from a procurement procedure. 

Article  45  allows  Member  States  to  take  into  account  self-cleaning  measures  as  far  as  such 
measures  show  that  the  concerns  about  professional  honesty,  solvency  and  reliability  of  the 
candidate  or  tenderer  have  been  eliminated.  However,  there  are  no  uniform  rules  on  "self-
cleaning", even though measures taken by the economic operator to remedy the situation of 
exclusion  are  taken  into  account  anyway  by  the  contracting  authorities  in  some  Member 
States. 

Furthermore, the question arises as to whether the EU should explicitly impose sanctions for 
attempts  to  jeopardise  the  transparency  and  impartiality  of  the  procurement  procedure  (e.g. 
candidates  or  tenderers  attempting  to  gain  access  to  confidential  information  or  to  unduly 
influence the activity of the contracting authority, such as the selection and the award phases). 
Such  sanctions  could  consist,  for  instance,  in  rejecting the  candidature or  tender,  as  long  as 
the decision is duly substantiated. 

Some  serious  forms  of  illegal  behaviour,  such  as  corruption  or  deliberately  undeclared 
conflicts of interest, should also be sanctioned more seriously, e.g. through criminal sanctions. 
Member States are already required to provide for criminal sanctions in the case of corruption 
of their officials. The appropriateness of providing minimum standards in relation to sanctions 
must  be  assessed  in  the  light  of  the  dimension  of  the  crime  and  the  principles  of  necessity, 
subsidiarity and proportionality107. 

Questions: 

104. 

105. 

106. 

Do  you  think  that  Article  45  of  Directive  2004/18/EC  concerning  the  exclusion  of 
bidders  is  a  useful  instrument  to  sanction  unsound  business  behaviours?  What 
improvements to this mechanism and/or alternative mechanisms would you propose? 

How  could  the  cooperation  among  contracting  authorities  in  obtaining  the 
information on the personal situation of candidates and tenderers be strengthened?  

Do  you  think  that  the  issue  of  "self-cleaning  measures"  should  be  expressly 
addressed in Article 45 or it should be regulated only at national level? 

107 

On the EU's functional criminal-law competence, see Case C-440/05, Commission v Council, para 66. 

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107. 

108. 

Is a reasoned decision to reject a tender or an application an appropriate sanction to 
improve observance of the principle of equality of treatment? 

Do  you  think  that  in  light  of  the  Lisbon  Treaty,  minimum  standards  for  criminal 
sanctions  should  be  developed  at  EU  level,  in  particular  circumstances,  such  as 
corruption or undeclared conflicts of interest? 

5.4. 

Avoiding unfair advantages  

Finally, there may be situations where, in the absence of any conflict-of-interest situation or 
unsound business practices, the fairness of the procedure may be jeopardised because certain 
bidders  are  in  an  advantageous  situation.  For  instance,  a  previous  involvement  of  the 
candidate or tenderer in preparatory activities linked with the development of the service to be 
procured (such as research and/or design) can confer considerable advantages on that bidder 
in  terms  of  privileged  information  and  therefore  may  give  rise  to  concerns  as  to  the 
observance of equality of treatment108.  

The question here is to what extent advantages could be compensated without discriminating 
against the bidder in question. Simply excluding bidders who participated in the preparation 
of the project would probably be a disproportionate reaction, and might not even be feasible 
in  practice,  especially  when  there  are  few  qualified  competitors  on  the  market  in  question. 
Meaningful  compensation  might  consist,  for  instance,  in  an  obligation  to  disclose  to  all 
competing bidders any privileged information that the advantaged bidder might have obtained 
from a prior association with the project.  

An even more delicate issue is the problem of the natural advantages of incumbent bidders, 
which  are  even  more  difficult  to  identify  clearly  and  to  compensate.  Again,  mandatory 
disclosure  of  some  privileged  information  may  be  appropriate  in  order  to  mitigate  risks  of 
discrimination,  on  the  condition  that  commercially  sensitive  information  is  adequately 
protected. 

Questions: 

109. 

Should  there  be  specific  rules  at  EU  level  to  address  the  issue  of  advantages  of 
certain  tenderers  because  of  their  prior  association  with  the  design  of  the  project 
subject of the call for tenders? Which safeguards would you propose? 

110. 

Do you think that the problem of possible advantages of incumbent bidders needs to 
be addressed at EU level and, if so, how? 

6. 

ACCESS OF THIRD COUNTRY SUPPLIERS TO THE EU MARKET  

The international commitments undertaken by the EU in the field of procurement are reflected 
by various provisions in the Directives.  

Recital 7 of Directive 2004/18/EC and Recital 14 of Directive 2004/17/EC expressly refer to 
Council Decision 94/800/EC, which approved the WTO GPA. It states that "the arrangements 
to be applied to tenderers and products from signatory third countries are those defined by 

108 

See Joined Cases C-21/03 and C-34/03, Fabricom. 

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the  Agreement".  In  addition,  the  conditions  related  to  the  GPA  are  reflected  in  Article  5  of 
Directive  2004/18/EC  and  Article  12  of  Directive  2004/17/EC.  As  a  result,  economic 
operators originating from the GPA signatories countries should enjoy the same treatment as 
European  economic  operators  under  the  conditions  laid  down  in  the  GPA,  in  particular  the 
EU's Appendix 1 which includes all the EU's commitments under the Agreement.  

Further,  within  the  areas  not  committed  internationally  by  the  EU,  Article  58  of  Directive 
2004/17/EC introduces a Community preference for procurement of goods, and Article 59 of 
the same Directive allows the possibility of restricting access to the EU utilities procurement 
market. 

Recently, many stakeholders have pointed out that the EU procurement market is more open 
than the procurement markets of our international partners. As a result, EU companies do not 
always  compete  on  an  equal  footing  with  foreign  companies.  Also,  this  situation  has  a 
negative  effect  on  the  EU's  negotiating  position  in  international  negotiations  for  greater 
market access. It is therefore necessary to reflect on the EU's public procurement policy vis-à-
vis  third  countries  and  on  the  use  of  the  above-mentioned  provisions  and  on  possible 
improvements. 

This  is  related  to  the  on-going  debate  on  possible  ways  to  strengthen  the  EU's  leverage  in 
international  negotiations  with  a  view  to  ensuring  a  more  balanced  and  reciprocal  access  to 
EU  and  foreign  procurement  markets.  The  Commission  is  currently  undertaking  an  impact 
assessment examining the various possible policy options, building on the implementation of 
our international commitments such as the Government Procurement Agreement, as well as in 
relation to third countries with which the EU does not yet have such agreements.  

Questions: 

111.  What  are  your  experiences  with  and/or  your  views  on  the  mechanisms  set  out  in 

Articles 58 and 59 of Directive 2004/17/EC?  

111.1.  Should these provisions be further improved? If so, how? Could it be appropriate to 
expand the scope of these provisions beyond the area of utilities procurement? 

112.  What other mechanisms would you propose to achieve improved symmetry in access 

to procurement markets? 

*** 

The  present  Green  Paper  tackles  the  issues  that  have  been  identified  by  the  Commission  as 
important aspects of a future reform of the EU public procurement policy. There may be other 
key subjects that are not addressed in the above Green Paper. Also, it would be interesting to 
hear from stakeholders which of the above subjects they consider most important and which 
issues  seem  less  relevant  in  view  of  a  future  reform.  Hence,  all  stakeholders  are  invited  to 
reply to the questions below. 

Questions: 

113. 

Are there any other issues which you think should be addressed in a future reform of 
the  EU  public  procurement  Directives?  Which  issues  are  these,  what  are  -  in  your 
view  -  the  problems  to  be  addressed  and  what  could  possible  solutions  to  these 
problems look like? 

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114. 

Please indicate a ranking of the importance of the various issues raised in this Green 
Paper  and  other  issues  that  you  consider  important.  If  you  had  to  choose  three 
priority  issues  to  be  tackled  first,  which  would  you  choose?  Please  explain  your 
choice. 

*** 

The  Commission  invites  all  interested  parties  to  submit  their  contributions  before  18  April 
to  MARKT-CONSULT-PP-
in  Word 
2011,  preferably  by  e-mail  and 
REFORM@ec.europa.eu. 

format 

These contributions do not need to cover all of the questions raised in this paper. They can be 
limited to questions of particular interest for you. Please indicate clearly the aspects to which 
your contributions relate. 

Received contributions, together with the identity of the contributor, will be published on the 
Internet, unless the contributor objects to publication of the personal data on the grounds that 
such publication would harm his or her legitimate interests. In this case the contribution may 
be published in anonymous form. Otherwise the contribution will not be published nor will, in 
principle, its content be taken into account. 

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