COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT
Date: 2011-12-20
Institutions: European Commission
Subjects: administrative contract, award of contract, energy supply, postal service, transport market, water supply

EUROPEAN COMMISSION 

Brussels, 20.12.2011 
SEC(2011) 1585 final 

COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a Directive of the European Parliament and of the Council 

on Public Procurement 
and  
the Proposal for a Directive of the European Parliament and of the Council  
on procurement by entities operating in the water, energy, transport and postal sectors

{COM(2011) 896 final} 
{SEC(2011) 1586 final} 

 
 
 
 
  
 
COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a Directive of the European Parliament and of the Council 

on Public Procurement 
and  
the Proposal for a Directive of the European Parliament and of the Council  
on procurement by entities operating in the water, energy, transport and postal sectors 

This report commits only the Commission's services involved in its preparation and does not 
prejudge the final form of any decision to be taken by the Commission 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

Procedural Issues and Consultation of Interested Parties .......................................... 12 

Procedural issues........................................................................................................ 12 

External expertise and consultation of interested parties........................................... 12 

1.2.1.  Overview .................................................................................................................... 12 

1.2.2.  Summary of the findings from the 2011 evaluation of public procurement rules ..... 12 

1.2.3.  Summary of the synthesis of responses to the GP on the modernisation of EU public 

procurement policy..................................................................................................... 13 

1.2.4.  Summary of the findings from the 2010 evaluation of the 2004 Action Plan for e-

procurement................................................................................................................ 14 

1.2.5.  Summary of the synthesis of responses to the e-procurement GP ............................. 14 

1.2.6.  External expertise....................................................................................................... 14 

1.2.7. 

Impact Assessment Board .......................................................................................... 15 

2. 

Policy context, Problem definition and Subsidiarity.................................................. 16 

2.1. 

Policy context............................................................................................................. 16 

2.1.1.  Scope of the review and this impact assessment........................................................ 17 

2.1.2.  Overview of legislative framework............................................................................ 17 

2.2. 

Background ................................................................................................................ 17 

2.2.1.  What is public procurement? ..................................................................................... 17 

2.2.2.  Nature and size of the market concerned ................................................................... 18 

2.3. 

Problem definition...................................................................................................... 21 

2.3.1.  Key problems and problem drivers ............................................................................ 21 

2.3.2.  Graphical representation of problem drivers.............................................................. 27 

2.4. 

2.5. 

3. 

3.1. 

3.2. 

3.3. 

4. 

How would the problem evolve, all things being equal? ........................................... 29 

The EU's right to act and justification........................................................................ 30 

Objectives................................................................................................................... 30 

General objectives...................................................................................................... 30 

Specific objectives ..................................................................................................... 31 

Operational objectives................................................................................................ 31 

Policy Options............................................................................................................ 32 

4.1. 

Radical options........................................................................................................... 32 

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4.1.1.  Abolition of the Directives......................................................................................... 32 

4.1.2.  Full harmonisation ..................................................................................................... 33 

4.1.3.  Conclusions on radical options .................................................................................. 33 

4.2. 

Development and screening of possible options........................................................ 34 

4.2.1. 

"No change" options .................................................................................................. 34 

4.2.2.  Non-legislative / soft law options .............................................................................. 34 

4.2.2.1.  Narrowing down the soft law options ........................................................................ 34 

4.2.3.  Framing the legal options........................................................................................... 35 

4.2.4.  Detailed mapping of options ...................................................................................... 38 

4.3. 

Summary of options to be analysed further ............................................................... 43 

5. 

Analysis of Impacts.................................................................................................... 43 

5.1. 

Scope .......................................................................................................................... 44 

5.1.1. 

Impacts of SCO.NC option ........................................................................................ 44 

5.1.1. 

Impacts of SCO.LEGI.TARGET option.................................................................... 44 

5.1.1.1.  Impacts for CAEs....................................................................................................... 44 

5.1.1.2.  Impacts for businesses (including SMEs) .................................................................. 46 

5.1.1.3.  Impacts on Member States ......................................................................................... 46 

5.1.1.4.  Impacts on the Internal Market .................................................................................. 47 

5.1.1.5.  Summary of stakeholder views on this option ........................................................... 47 

5.1.1.6.  Impacts on administrative burden and simplification ................................................ 47 

5.1.2. 

Impacts of SCO.LEGI.REDUCE option.................................................................... 48 

5.1.2.1.  Impacts for CAEs....................................................................................................... 48 

5.1.2.2.  Impacts for businesses (including SMEs) .................................................................. 49 

5.1.2.3.  Impacts on Member States ......................................................................................... 49 

5.1.2.4.  Impacts on the Internal Market .................................................................................. 50 

5.1.2.5.  Summary of stakeholder views on this option ........................................................... 51 

5.1.2.6.  Impacts on administrative burden and simplification ................................................ 51 

5.1.3.  Summary of impacts of options in Scope against specific objectives ....................... 51 

5.2. 

Procedures .................................................................................................................. 52 

5.2.1. 

Impacts of PRO.NC option ........................................................................................ 52 

5.2.2. 

Impacts of PRO.LEGI.DESIGN option ..................................................................... 52 

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5.2.2.1.  Impacts on CAEs........................................................................................................ 52 

5.2.2.2.  Impacts for businesses (including SMEs) .................................................................. 53 

5.2.2.3.  Impacts on Member States ......................................................................................... 54 

5.2.2.4.  Impacts on the Internal Market .................................................................................. 55 

5.2.2.5.  Summary of stakeholders views on this option.......................................................... 55 

5.2.2.6.  Impacts on administrative burden and simplification ................................................ 56 

5.2.3. 

Impacts of PRO.LEGI.FLEXIB option...................................................................... 56 

5.2.3.1.  Impacts on CAEs........................................................................................................ 56 

5.2.3.1.  Impacts for businesses (including SMEs) .................................................................. 57 

5.2.3.2.  Impacts on Member States ......................................................................................... 58 

5.2.3.3.  Impacts on the Internal Market .................................................................................. 58 

5.2.3.4.  Summary of stakeholders views on this option.......................................................... 58 

5.2.3.5.  Impacts on administrative burden and simplification ................................................ 59 

5.2.4.  Summary of impacts of options in Procedures against specific objectives ............... 59 

5.3. 

Strategic public procurement ..................................................................................... 60 

5.3.1. 

Impacts of STR.NC option......................................................................................... 60 

5.3.2. 

Impacts of STR.LEGI.FACILIT option..................................................................... 60 

5.3.2.1.  Impacts on CAEs........................................................................................................ 60 

5.3.2.2.  Impacts on businesses (including SMEs)................................................................... 62 

5.3.2.3.  Impacts on Member States ......................................................................................... 63 

5.3.2.4.  Impacts on the Internal Market .................................................................................. 64 

5.3.2.5.  Summary of stakeholders views on this option.......................................................... 65 

5.3.2.6.  Impacts on administrative burden and simplification ................................................ 65 

5.3.3. 

Impacts of STR.LEGI.ENFORC option .................................................................... 66 

5.3.3.1.  Impacts on CAEs........................................................................................................ 66 

5.3.3.2.  Impacts on businesses (including SMEs)................................................................... 67 

5.3.3.3.  Impacts on Member States ......................................................................................... 67 

5.3.3.4.  Impacts on the Internal Market .................................................................................. 67 

5.3.3.5.  Summary of stakeholders views on this option.......................................................... 68 

5.3.3.6.  Impacts on administrative burden and simplification ................................................ 68 

5.3.4.  Summary of impacts of options in Strategic against specific objectives ................... 69 

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5.4. 

Access ........................................................................................................................ 70 

5.4.1. 

Impacts of ACC.NC option........................................................................................ 70 

5.4.2. 

Impacts of ACC.SOFT option.................................................................................... 70 

5.4.3. 

Impacts of ACC.LEGI.FACILIT option.................................................................... 70 

5.4.3.1.  Impacts on CAEs........................................................................................................ 70 

5.4.3.2.  Impacts on businesses (including SMEs)................................................................... 71 

5.4.3.3.  Impacts on Member States ......................................................................................... 72 

5.4.3.4.  Impacts on the Internal Market .................................................................................. 72 

5.4.3.5.  Summary of stakeholders views on this option.......................................................... 72 

5.4.3.6.  Impacts on administrative burden and simplification ................................................ 73 

5.4.4. 

Impacts of ACC.LEGI.ENFORC option ................................................................... 73 

5.4.4.1.  Impacts on CAEs........................................................................................................ 74 

5.4.4.2.  Impacts on businesses (including SMEs)................................................................... 75 

5.4.4.3.  Impact on Member States........................................................................................... 75 

5.4.4.4.  Impacts on the Internal Market .................................................................................. 76 

5.4.4.5.  Summary of stakeholders views on this option.......................................................... 76 

5.4.4.6.  Impacts on administrative burden and simplification ................................................ 76 

5.4.5.  Summary of impacts of options in Access against specific objectives...................... 77 

5.5. 

Governance ................................................................................................................ 78 

5.5.1. 

Impacts of GOV.NC option ....................................................................................... 78 

5.5.2. 

Impacts of GOV.SOFT option ................................................................................... 78 

5.5.3. 

Impacts of GOV.LEGI.TARGET option ................................................................... 79 

5.5.3.1.  Impacts on CAEs........................................................................................................ 79 

5.5.3.2.  Impacts for businesses (including SMEs) .................................................................. 80 

5.5.3.3.  Impacts on Member States ......................................................................................... 80 

5.5.3.4.  Impacts on the Internal Market .................................................................................. 80 

5.5.3.5.  Summary of stakeholders views on this option.......................................................... 81 

5.5.3.6.  Impacts on administrative burden and simplification ................................................ 81 

5.5.4. 

Impacts of GOV.LEGI.ENHANC option .................................................................. 81 

5.5.4.1.  Impacts on CAEs........................................................................................................ 81 

5.5.4.2.  Impacts on businesses (including SMEs)................................................................... 82 

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5.5.4.3.  Impacts on Member States ......................................................................................... 82 

5.5.4.4.  Impacts on the Internal Market .................................................................................. 83 

5.5.4.5.  Summary of stakeholders views on this option.......................................................... 83 

5.5.4.6.  Impacts on administrative burden and simplification ................................................ 83 

5.5.5.  Summary of impacts of options in Governance against specific objectives.............. 84 

5.6. 

Regulatory form ......................................................................................................... 84 

6. 

Comparing the Options .............................................................................................. 85 

6.1. 

Preferred solution ....................................................................................................... 88 

6.1.1.  Scope .......................................................................................................................... 88 

6.1.2.  Procedures .................................................................................................................. 89 

6.1.3.  Strategic procurement ................................................................................................ 89 

6.1.4.  Access ........................................................................................................................ 90 

6.1.5.  Governance ................................................................................................................ 91 

6.2. 

Conclusions ................................................................................................................ 91 

7. 

8. 

Monitoring and Evaluation ........................................................................................ 92 

ANNEXES ................................................................................................................. 94 

8.1. 

ANNEX 1 – Procedural issues................................................................................... 94 

8.1.1. 

Inter-service steering group........................................................................................ 94 

8.1.2.  External expertise....................................................................................................... 95 

8.1.3.  Public consultations ................................................................................................... 96 

8.1.3.1.  The GP on the modernisation of EU public procurement policy............................... 96 

8.1.3.2.  The e-procurement GP ............................................................................................... 96 

8.2. 

ANNEX 2 – Additional information related to Section 2.2. Background ................. 97 

8.2.1.  Total expenditure on works, goods and services ....................................................... 97 

8.2.2.  The estimated value of tenders published in TED ..................................................... 98 

8.2.3.  Number of contract notices and contract award notices published in OJ/TED ......... 99 

8.2.4.  Legal detail - overview of public procurement legislation ........................................ 99 

8.3. 

ANNEX 3 - Detailed description of problem drivers .............................................. 105 

8.3.1.  Problem drivers in Scope and coverage ................................................................... 105 

8.3.1.1.  Identification of buyers covered............................................................................... 107 

8.3.1.2.  Identification of transactions covered ...................................................................... 107 

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8.3.1.3.  A/B-type services ..................................................................................................... 108 

8.3.1.4.  Legal uncertainty...................................................................................................... 109 

8.3.1.5.  Conclusions .............................................................................................................. 111 

8.3.2.  Problem drivers in Procedures ................................................................................. 111 

8.3.2.1.  Disproportionate costs of procedures for low value contracts ................................. 112 

8.3.2.2.  Complexity of the rules on procedures .................................................................... 114 

8.3.2.3.  Insufficient flexibility............................................................................................... 115 

8.3.2.4.  E-procurement.......................................................................................................... 116 

8.3.2.5.  Aggregation of demand............................................................................................ 117 

8.3.2.6.  Conclusions .............................................................................................................. 119 

8.3.3.  Problem drivers in Strategic public procurement..................................................... 119 

8.3.3.1.  Insufficient provisions with regards to the integration of strategic goals ................ 119 

8.3.3.2.  Uncertainty with regards to extent of integration of strategic goals ........................ 122 

8.3.3.3.  Conclusions .............................................................................................................. 124 

8.3.4.  Problem drivers in Access........................................................................................ 125 

8.3.4.1.  Low cross-border procurement ................................................................................ 125 

8.3.4.2.  Import penetration lower than in the private sector ................................................. 126 

8.3.4.3.  Reluctance to bid cross-border amongst firms......................................................... 128 

8.3.4.4.  Market access barriers (SMEs in particular)............................................................ 130 

8.3.4.5.  Conclusions .............................................................................................................. 133 

8.3.5.  Problem drivers in Governance................................................................................ 133 

8.3.5.1.  Differences in national organisation of public procurement.................................... 133 

8.3.5.2.  Different capabilities of CAEs ................................................................................. 134 

8.3.5.3.  Risks of errors in application ................................................................................... 135 

8.3.5.4.  Difference in monitoring arrangements ................................................................... 137 

8.3.5.5.  Integrity of public procurement ............................................................................... 137 

8.3.5.6.  Conclusions .............................................................................................................. 138 

8.4. 

8.5. 

8.6. 

8.7. 

ANNEX 4 – Summary table linking objectives with problems............................... 138 

ANNEX 5 – Long list of proposals considered before defining Options ................ 140 

ANNEX 6 – Detailed description of Headline actions ............................................ 168 

ANNEX 7 – Detailed analysis of impacts of selected Headline actions.................. 172 

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8.7.1.  SCO.LEGI.TARGET - New regime for all services and a lighter treatment for social 
services..................................................................................................................... 172 

8.7.2.  SCO.LEGI.REDUCE- General increase of EU thresholds...................................... 176 

8.7.2.1.  Impacts on the use of procedures ............................................................................. 176 

8.7.2.2.  Impacts on the number and volume of transactions no longer covered................... 178 

8.7.3.  PRO.LEGI.DESIGN - Increase in the use of e-procurement................................... 179 

8.7.4.  PRO.LEGI.DESIGN - Improve tools for repetitive purchasing .............................. 181 

8.7.4.1.  Impacts of using framework contracts ..................................................................... 182 

8.7.4.2.  Impacts of increasing the use of the DPS................................................................. 183 

8.7.4.3.  Impacts of using e-catalogues .................................................................................. 183 

8.7.5.  PRO.LEGI.FLEXIB - Permit more negotiations ..................................................... 184 

8.7.5.1.  Impact on the costs of procedures............................................................................ 184 

8.7.5.2.  Impacts on competition ............................................................................................ 185 

8.7.5.3.  Impacts on the duration of the award stage.............................................................. 186 

8.7.5.4.  Impacts on the costs of procedures .......................................................................... 187 

8.7.5.5.  Impacts on cross-border trade .................................................................................. 187 

8.7.6.  PRO.LEGI.FLEXIB - New lighter regime for sub-central authorities .................... 189 

8.7.7.  STR.LEGI.FACILIT - Directly linked externalities taken into account.................. 190 

8.7.8.  STR.LEGI.FACILIT - Innovation partnership ........................................................ 191 

8.7.9.  STR.LEGI.ENFORC - Quotas in strategic procurement ......................................... 192 

8.7.10.  ACC.LEGI.FACILIT - European public procurement passport.............................. 192 

8.7.10.1. Implications.............................................................................................................. 193 

8.7.10.2. Advantages and disadvantages................................................................................. 193 

8.7.11.  GOV.LEGI.TARGET - New organisation of CPBs ................................................ 194 

8.7.12.  GOV.LEGI.ENHANC – Oblige Member States to identify national authority in 
charge of implementation, control and monitoring of public procurement which 
reports annually on performance.............................................................................. 195 

8.7.12.1. Current situation....................................................................................................... 195 

8.7.12.2. Reporting obligations:.............................................................................................. 195 

8.7.12.3. Technical support ..................................................................................................... 196 

8.7.12.4. Conclusions .............................................................................................................. 196 

8.7.12.5. Possible impact of creating oversight bodies (back of the envelope calculations) .. 197 

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8.8. 

ANNEX 8 – Background data to support the analysis of impacts........................... 198 

8.8.1.  Comparison between above and below EU-thresholds procurement ...................... 198 

8.8.2.  Comparison between above EU-thresholds procurement and private procurement 199 

8.8.3.  Litigation costs ......................................................................................................... 200 

8.8.4.  Costs of procedures .................................................................................................. 201 

8.8.5.  SMEs impacts........................................................................................................... 202 

8.8.6.  Administrative burden.............................................................................................. 202 

8.9. 

ANNEX 9 – Glossary............................................................................................... 204 

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Introduction 

In 2009, the public sector spent over € 2,200 billion on goods, services and works – 
amounting  to  around  19%  of  EU  GDP.  The  efficient  and  strategic  management  of 
public purchasing is an issue of paramount policy importance on a number of levels: 
the  sound  management  of 
the  daily 
administration of the 250,000+ government departments, agencies and public bodies 
involved  in  the  award  and  management  of  public  contracts;  the  impact  on  the 
supplier  base,  many  of  whom  are  heavily  dependent  on  public  sector  business;  the 
role of the public sector as a buyer of 'first resort' for innovative or environmentally 
superior solutions.  

increasingly  scarce  public  resources; 

The  EU  public  procurement  Directives  seek  to  support  the  emergence  of  open  and 
efficient markets for public procurement contracts and thereby facilitate the best use 
of  public  resources.  They  do  this  by  applying  common  principles  of  transparency, 
open  competition  and  sound  procedural  management  to  higher-value  public 
procurements  which  are  likely  to  be  of  most  interest  to  suppliers  across  the  single 
market.  In  2009,  EU  legislation  applied  to  150,000  procedures,  involving  a  total 
estimated expenditure of € 420 billion or 3.5% of EU GDP.  

The  design  of  EU  public  procurement  disciplines  has  very  significant  and  tangible 
repercussions given the economic significance of the activities concerned, the large 
numbers  of  public  purchasers  and  the  time  and  resource  involved.  EU  public 
procurement Directives must provide an enlightened framework for the organisation 
of public procurement which responds to the most pressing challenges of the time. A 
number  of  critical  reports  from  the  European  Parliament  and  other  stakeholders 
testify to a widespread concern that the current EU public procurement rules can be 
enhanced in a number of important respects. Businesses often find the procedures to 
be  a  “big  irritant”1.  These  concerns  have  prompted  the  Commission  to  undertake  a 
profound  evaluation  of  the  rules  and  a  widespread  consultation  on  possible 
adjustments to the legislative framework (620 respondents).  

Reflecting  these  concerns,  the  Single  Market  Act2  foresees  the  publication  of 
Commission  proposals  before  the  end  of  2011,  paving  the  way  for  adoption  of 
revised legislation before the end of 2012. The revision should 'underpin a balanced 
policy  which  fosters  demand  for  environmentally  sustainable,  socially  responsible 
and innovative goods, services and works. This revision should also result in simpler 
and  more  flexible  procurement  procedures  for  contracting  authorities  and  provide 
easier access for companies, especially SMEs'. This impact assessment identifies the 
shortcomings of the existing legislative framework, and evaluates the key options for 

1 

2 

The  draft  report  of  the  Consortium  indicates  that  European  public  procurement  rules  cost  European 
businesses around € 188 million. It is stressed that in spite of this modest sum businesses often refer to 
public procurement as a “big irritant”. This can be partly explained by the fact that firms perception is 
also based on compliance costs and other business costs and the frequent legal procedures; source: The 
High  Level  Group  of  Independent  Stakeholders  on  Administrative  Burdens,  opinion  of  10  December 
2008; 
http://ec.europa.eu/enterprise/policies/smart-
regulation/files/hlg_opinion_on_ppfinal_en.pdf; page 2  
Commission Communication (COM(2011)206 of 13.04.2011) to the European Parliament, the Council, 
the  Economic  and  Social  Committee  and  the  Committee  of  the  Regions:  "A  Single  Market  Act:  12 
levers to boost growth and strengthen confidence'. 

available 

at: 

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tackling  them.  It  aims  to  help  the  Commission  services  in  identifying  possible 
improvements to the existing legislation. 

1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Procedural issues 

The project was led by Directorate C of the Directorate General Internal Market and 
Services. It was assisted by an inter-service steering group containing representatives 
from 16 other Directorate Generals, which met four times3. 

1.2. 

External expertise and consultation of interested parties 

1.2.1.  Overview 

This impact assessment builds on the extensive external expertise, consultation and 
analysis supporting the evaluation of public procurement published on 24 June 2011 
(hereafter: the evaluation report) and the 2010 evaluation of the 2004 Action Plan for 
e-procurement  (hereafter:  the  e-procurement  evaluation).  It  also  draws  on  the 
findings of two Green Paper consultations on:  

(a)  The modernisation of EU public procurement policy (hereafter: the GP); 

(b)  Expanding  the  use  of  e-procurement  in  the  EU  (hereafter:  the  e-procurement 
GP).  

Both of these Green Papers were supported by well attended conferences in Brussels 
(on  30.06.2011  and  26.11.2010,  respectively),  where  stakeholders  had  a  further 
opportunity to express their views4.  

Both  these  evaluations  and  the  Green  Paper  findings  have  been  presented  and 
discussed  with  Member  State's  (hereafter:  MS)  representatives  at  meetings  of  the 
Advisory Committee for Public Contracts (hereafter: ACPC) and the e-procurement 
working group. A special meeting of the ACPC was held on 6.07.11 to discuss the 
emerging  findings  and  possible  implications  for  the  reform.  A  similar  agenda  was 
discussed  with  a  wide  range  of  Directorates  General  at  an  internal  Commission 
meeting on 15.07.11. 

1.2.2. 

Summary of the findings from the 2011 evaluation of public procurement rules 

The evaluation found that the Directives have had positive impacts: transparency has 
increased  and  there  are  good  levels  of  competition  for  many  public  procurement 
contracts (on average 5.4 bids per invitation). This has resulted in a net increase in 
benefits  -  the  total  cost  of  the  procurement  process  (including  all  the  bidders'  costs 
plus  those  of  the  contracting  authorities  and  entities  (hereafter:  CAE)  for  those 

3 
4 

For a full list of participating DGs see: section 8.1.1). 
A  summary  report  of 
http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/conferences/index_en.htm.  
A summary report of the 26.11.2011 conference and various speeches are available at: 
http://ec.europa.eu/internal_market/publicprocurement/e-procurement/consultations/open_hearing_en.htm 

the  30.06.2011  conference  and  various  speeches  are  available  at: 

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procedures covered by the EU Directives has been estimated at €5.6 billion per year 
or  1.3%  of  the  total  value  of  contracts  published.  This  is  more  than  offset  by  the 
estimated savings, which are around 5% of the total i.e. €20 billion in 2009, without 
making  any  allowance  for  improvements  in  quality  and  wider  environmental  or 
social benefits. However there is some evidence that the current procedures are not 
as  efficient  as  they  could  be  (average  cost  of  an  above  threshold  procedure  is 
approximately  €28,000)  which  sometimes  leads  to  higher  costs  for  certain  parties. 
Cross-border  procurement  is  still  not  as  high  as  had  been  expected,  accounting  for 
around just 1.6% of contract awards (3.5% of total value)5.  

1.2.3. 

Summary of the synthesis of responses to the GP on the modernisation of EU public 
procurement policy 

A  focussed  and  very  broad  GP  consultation  of  stakeholders  was  held  between  27 
January  and  18  April  2011.  Over  620  replies  were  received  and  whilst  responses 
reveal diverging views on the priority which should be given to different areas, there 
is strong support for simplification, improving market access (particularly for SMEs) 
and  fostering  innovation.  There  is  a  certain  consensus  that  the  existing  procedures 
should  be  streamlined  and  made  more  flexible.  The  issue  of  using  public 
procurement to support other policies provoked mixed reactions but it was possible 
to  identify  certain  basic  orientations  and  identify  certain  concrete  measures6.  The 
issues which attracted the most responses are shown in Figure 1). 

Figure 1): Most frequently answered questions in the GP consultation 

5 

The  full  report  on  the  evaluation  of  the public  procurement  rules,  executive  summary  and  supporting 
studies can be found at:  

http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/evaluation/index_en.htm 
6 

A synthesis document, summarising the replies received to the modernisation of EU public procurement 
policy Green Paper and the responses authorised for publication can be found at:  

http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/consultations/index_en.htm 

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1.2.4. 

Summary  of  the  findings  from  the  2010  evaluation  of  the  2004  Action  Plan  for  e-
procurement 

The e-procurement evaluation found that the technology to conduct e-procurement is 
now  ready  to  be  used  and  that  the  replacement  of  paper-based  public  procurement 
procedures  by  automated  processes  can,  as  expected,  deliver  faster  and  more 
streamlined  procurement  administration.  However,  e-procurement  take-up  across 
Europe  was  fairly  low  and  whilst  one  or  two  countries  have  made  significant 
progress  (often  due  to  mandatory  use),  generally  no  more  than  5%  of  procurement 
procedures  above  the  EU  thresholds  involved  electronic  processing.  Public 
authorities were often deterred by the significant costs and challenges of the switch-
over  (administrative,  organisational  and  technical)  whilst  economic  operators  faced 
difficulties  due  to  different  systems  and  interfaces  making  different  demands  (not 
just if trying to operate across borders, but also within a single Member State)7.  

1.2.5. 

Summary of the synthesis of responses to the e-procurement GP  

Across the 77 replies received, there is broad support for EU level action to improve 
the legislative and policy environment and provide support to CAEs and firms which 
choose to use e-procurement. This included use of legislation to facilitate the use of 
standardised e-procurement solutions. A large majority (76%) of respondents call for 
changes to EU public procurement legislation in order to integrate better the use of 
ICT in procurement procedures. 85% of respondents considered that EU intervention 
is  needed  to  avoid  the  emergence  of  unnecessary  or  disproportionate  barriers  to 
cross-border participation in e-procurement. Particular attention is needed to resolve 
access  barriers  linked  to  e-signatures  and  identification.  A  small  majority  (53%)  of 
respondents support the imposition of EU level requirements to use e-procurement8. 

1.2.6.  External expertise 

Both the evaluations were supported via the following studies conducted by external 
consultants. 

7 

The report on the evaluation of the 2004 Action Plan for electronic public procurement and supporting 
study can be found at:  

http://ec.europa.eu/internal_market/publicprocurement/e-procurement/documents/index_en.htm 
8 

A  synthesis  document,  summarising  the  replies  received  to  the  e-Procurement  Green  Paper  and  the 
responses authorised for publication can be found at:  

http://ec.europa.eu/internal_market/publicprocurement/e-procurement/consultations/index_en.htm 

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Table 1): External expertise – list of studies 

Title of a study 

Consultant in charge, date 

“Cross-border procurement above EU thresholds“  Rambøll Management, 2011 

"Public  Procurement  in  Europe  –  Procedures  and 
techniques – A study on the cost and effectiveness 
of procurement regulation“ 

PricewaterhouseCoopers,  
London  Economics  and  Ecorys, 
2011  

"Strategic use of public procurement in Europe" 

Adelphi, Belmont, PPRC, 2011  

"Estimating  Benefits  and  Savings  from 
Procurement Directives" 

the 

Europe Economics, 2011 

"Taking stock on utilities procurement" 

Europe Economics, 2011 

"Evaluation  of  SMEs’  Access 
Procurement Markets in the EU" 

to  Public 

GHK,  2010  (for  DG  Enterprise 
and Industry) 

"Study  on  the  evaluation  of  the  Action  Plan  for 
the  implementation  of  the  legal  framework  for 
electronic procurement " 

Siemens Time.lex, 2010 

1.2.7. 

Impact Assessment Board  

The Impact Assessment Board discussed a draft of this report on 7 September 2011 
and  requested  a  resubmission,  based  on  which  a  final  opinion  was  issued  on  23 
September 2011. The draft report was significantly amended to address both sets of 
comments from the IAB. In particular, the following changes were implemented: 

• 

• 

• 

The problem definition has been modified to identify more clearly the specific 
issues in the legislative framework which need to be addressed. More effective 
use has been made of the available empirical evidence and more examples have 
been included both in the problem statement and more generally throughout the 
report.  

Greater detail has been provided on the content of the options under discussion, 
indicating the specific problem areas which they should address. A "long list" 
of  actions  considered  in  the  context  of  legislative  reform  has  been  added 
(annex  8.5)  and  for  each  legislative  option,  1-3  headline  actions  have  been 
identified and further explained (see chapter 4, tables 2-6 and annex 8.6). 

A  deeper  cost-benefit  analysis  of  the  selected  headline  actions  has  been 
included,  where  possible  (chapter  5  and  annex  8.7).  This  includes  extensive 
reworking  of  the  discussion  relating  to  the  legislative  options  for  strategic 
procurement  (section  5.3).  Whilst  a  more  detailed  analysis  of  some  aspects, 
particularly  in  relation  to  the  options  for  strategic  procurement,  would  have 
been  desirable,  it  has  not  proved  possible  given  the  limited  information 
available at this point; 

EN 

15 

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• 

• 

• 

stakeholder  views  have  been  integrated  more  systematically,  both  in  the 
problem  definition  (section  2.3)  and  to  complement  the  analysis  of  impacts 
(sections added for each legislative option discussed in chapter 5); 

a more systematic treatment of administrative burden has been introduced for 
each legislative option (sections added for each legislative option discussed in 
chapter 5); 

Conclusions  regarding  the  preferred  options  for  the  content  of  the  legislative 
reform  have  been  integrated  in  the  report  (section  6.1).  This  preferred  option 
reflects  the  opinion  of  DG  MARKT  Services  and  does  not  prejudge  the  final 
form of any decision to be taken by the wider Commission Services. It is based 
on  the  vertical  combination  of  the  optimal  solutions  identified  for  each  given 
(horizontal)  problem  theme.  Whilst  the  IAB  recommended  that  alternative 
packages of options should be compared, this has not been done as part of the 
main impact assessment, since the influencing factors would generally be of a 
more  political  nature.  Alternatives  have  however  been  discussed  during  the 
inter-service consultation process and the main resultant changes are identified 
in section 6.2.  

2. 

POLICY CONTEXT, PROBLEM DEFINITION AND SUBSIDIARITY 

2.1. 

Policy context 

The  first  EU  legal  acts  relating  to  public  procurement  date  back  to  the  early 
seventies. The Directives establish common disciplines which regulate the way that 
CAEs organise purchasing procedures above designated thresholds by respecting the 
principles of transparency, regularity / fairness of procedures to ensure openness and 
non-discrimination. Through subsequent developments further aims were added and 
the  scope  was  extended  (e.g.  utilities  sectors,  services),  resulting  in  legislation 
intended to: 

•  promote efficient EU-wide and trans-border competition for contracts; 

•  deliver best value for money; and  

•  Aid the fight against corruption. 

Public  procurement  policy  has  been  and  remains  a  key  element  of  the  Internal 
Market.  However,  a  wide  range  of  recent  reports  and  policy  statements  have 
highlighted  a  need  to  review  the  current  Directives.  Key  amongst  these  are:  the 
Europe  2020  strategy  (hereafter:  Europe  2020),  "A  new  strategy  for  the  Single 
Market"  (hereafter:  Mario  Monti’s  report)  and  the  European  Parliament's  report  on 
new  developments  in  public  procurement  (hereafter:  EP  Report).  Responding  to 
these calls, the Single Market Act (hereafter: SMA) announced in April 2011 that by 
the  end  of  the  year,  proposals  will  be  made  for  a: "Revised  and  modernised  public 
procurement  legislative  framework,  with  a  view  to  underpinning  a  balanced  policy 
which  fosters  demand  for  environmentally  sustainable,  socially  responsible  and 
innovative goods, services and works. This revision should also result in simpler and 

EN 

16 

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more flexible procurement procedures for contracting authorities and provide easier 
access for companies, especially SMEs".  

2.1.1. 

Scope of the review and this impact assessment 

This  impact  assessment  will  analyse  the  specific  challenges  which  public 
procurement  policy  faces  today  and  explore  possibilities  to  adapt  and  support 
Directives 2004/17/EC (hereafter: the Utilities Directive) and 2004/18/EC (hereafter: 
the  Classic  Directive)  in  order  to  better  respond  to  its  current  objectives  and  new 
challenges. The Remedies Directive (2007/66/EC)9 and the Directive on Defence and 
Sensitive  Security  procurement  (2009/81/EC)10  are  not  included  in  this  review. 
Equally,  concessions  are  addressed  through  a  separate  initiative  and  impact 
assessment.  A  future  impact  assessment  will  consider  the  access  of  third  country 
companies and goods to the EU public procurement markets. It should also be noted 
that  the  scope  of  any  possible  legislative  change  analysed  here  may  be  affected  by 
constraints  arising  from  both  existing  and  future  EU  international  commitments 
defined in the Government Procurement Agreement (hereafter: the GPA) and other 
bilateral agreements.  

2.1.2.  Overview of legislative framework  

The first public procurement Directive (71/305/EEC) coordinated the procedures for 
the award of public works contracts. Over time, the field of application has gradually 
increased  to  include  services  and  goods  as  well  as  procurement  in  certain  utilities 
sectors  and  has  been  complemented  by  flanking  measures  to  ensure  that  the  rights 
given  to  firms  by  the  EU  rules  were  observed  (i.e.  the  Remedies  Directives).  The 
most recent reforms took place in 2004 and were intended to simplify and modernise 
the  framework.  Public  procurement  legislation  is  supplemented  by  rulings  by  the 
European  Court  of  Justice  (hereafter:  ECJ).  The  EU  is  also  party  to  a  range  of 
international agreements, most importantly, the GPA. For further detail on the public 
procurement legislative framework, see: section 8.2.4). 

2.2. 

Background 

2.2.1.  What is public procurement? 

Public procurement is the process used by government institutions and public sector 
organisations to buy supplies, services and public works. Some key elements of the 
process are highlighted in Figure 2) below. 

9 

10 

Directive 2007/66/EC relates to the procedures that a business can follow if they consider a contract has 
been awarded unfairly 
Directive 2009/81/EC covers the rules for the procurement of arms, munitions and war material (plus 
related works and services) for defence purposes.  

EN 

17 

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Figure 2): Public procurement rules – overview of general principles  

2.2.2.  Nature and size of the market concerned 

Government expenditure is a significant and influential factor in the economy - over 
€2,200  billion11  (19%  of  EU  GDP)  is  spent  annually  by  different  levels  of 
government (central, sub-central, bodies governed by public law) to procure goods, 
works,  and  services.  Almost  a  fifth  of  this  total  is  spent  on  purchases  whose  value 
exceeds certain thresholds12 and which should therefore be awarded according to the 
rules set out in the public procurement Directives. In 2009, the value of the contracts 
governed by EU public procurement rules was approximately € 420 billion13 (3.6% 
of EU GDP). Of this total, approximately 39% (approx. € 165 billion) was spent on 
works, 38% was spent on services (approx. € 160 billion) and 23% on goods (approx. 
€ 95 billion)14.  

11 
12 
13 
14 

See: Table 17) in section 8.2.1). 
See: Tables 21 and 22) in section 8.3.1).  
See: Table 18) in section 8.2.2). 
See: sections 8.2.1) and 8.2.2). 

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Figure 3): Estimated value of tenders published in OJ/TED by EU MS in € bn  

Value

377.06

367.2

319.87

392.42

420.44

450

400

350

300

250

200

150

100

50

0

2005

2006

2007

2008

2009

Source: DG MARKT estimates based on OJ/TED data 

Transparency  in  these  markets  is  improved  by  the  publication  of  a  variety  of 
standardised  notices  relating  to  contracts  in  OJ/TED15.  This  single  point  of  access 
makes  information  on  contracts  above  the  EU  thresholds  easily  available  to  any 
interested  company.  The  two  most  important  notices  are  the:  Contract  Notice 
(hereafter: CN)16 which contains information on possible contracts and details how to 
bid; and the Contract Award Notice (hereafter: CAN) which provides details of the 
award  process  and  winner.  Significant  improvements  have  been  observed  in  the 
transparency rate over the last five years - the ratio of CANs published relative to the 
number of CNs has grown from 60% to almost 90% (see: Figure 4). 

Figure 4): Number of CNs and CANs published in OJ/TED in 2005 -2010 by EU MS 

170000

160000

150000

140000

130000

120000

110000

100000

90000

80000

70000

133147

126897

142025

115738

88915

77813

161733

143782

150282

153783

138021

127347

CANs

CNs

2005

2006

2007

2008

2009

2010

15 
16 

TED is the online version of the 'Supplement to the Official Journal of the European Union'. 
Also sometimes referred to as an Invitation to Tender (ITT). 

EN 

19 

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Source: DG MARKT estimates based on OJ/TED data 

On average between 5 and 6 offers are submitted for each CN published in OJ/TED, 
meaning  that  firms  prepare  an  estimated  870,00017  offers  each  year.  The  open 
procedure 
for 
approximately 73% of all CANs but only 52% of published value. The second most 
popular procedure is the restricted, which is used in contracts of much higher value 
(9% of CANs, 23% of the total value).  

the  most  commonly  used  procedure,  accounting 

remains 

An increasing trend to aggregation has also been observed. Strong growth in the use 
of framework agreements means that in 2006-2010 they accounted for around 11% 
of  the  number  of  transactions  and  17%  in  value  terms.  The  various  forms  of  joint 
purchasing18 accounted for just 4% of number of contracts, but are worth 12% of the 
total value19. 

Figure 5): Procedures by use and value in 2006-2010 in percentages 

0%
2%
7%
8%
9%

73%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

4%
2%
5%

14%

23%

52%

Competitive dialogue 

Accelerated procedures

Negotiated without
publication 
Negotiated

Restricted

Open 

 Number 

Value

These budgets are managed by over 250,000 CAEs, which vary significantly in size 
and possess different administrative capacities. The organisation of procurement, and 
notably  the  extent  of  centralisation/decentralisation,  varies considerably  across MS, 
generally reflecting the way public administration is organised. 

Source: PwC study 

17 
18 

19 

161,733 CNs published in 2010 * 5.4 bid per offer. 
Including  formally  established  Central  Purchasing  Bodies  (hereafter:  CPBs),  but  also  various  less 
formal forms of cooperative purchasing. 
"Public  procurement  in  Europe  –  Cost  and  effectiveness",  PwC,  London  Economics,  Ecorys,  March 
2011 (hereafter: PwC study), page 22. 

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20 

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2.3. 

Problem definition 

2.3.1.  Key problems and problem drivers 

The evaluation of the Directives confirms that they have encouraged a high level of 
competition,  enhanced  transparency  in  public  procurement  markets  and  achieved 
measurable  savings,  generating  associated  increases  in  employment  and  GDP  of 
between 0.08-0.12% after one decade (164-240,000 jobs20). However, the evaluation, 
taken together with other recent information and the results of the GP consultations, 
points to three areas where there may be opportunities to improve further the existing 
public procurement environment and enable the full potential of the Internal Market 
for public procurement to be realised. These three areas and their associated problem 
drivers are presented below21: 

(1) Sub-optimal cost-efficiency of procurement 

Overall  it  appears that the cost-efficiency of public procurement procedures is sub-
optimal. This is driven by the following issues: 

(a) 

Disproportionate  procedures  defined  in  the  EU  rules,  which 
generate  excess  costs  (especially  for  smaller  contracts).  CAEs 
generally consider that costs are higher for procedures above threshold 
compared with below. A clear majority of respondents to the GP have 
misgivings  about  the  level  of  detail  of  the  EU  public  procurement 
rules; Member States and business representatives tend to have a more 
positive opinion, whilst CAEs, legal experts, citizens and civil society 
organisations  are  more  negative.  The  typical  (above  threshold) 
procurement  procedure  costs  nearly  €  28,000.  This  cost  can  be  split 
between  CAEs  who  typically  have  costs  amounting  to  €  5,500  per 
tender  launched  and  firms  whose  costs  are  around  €  3,800  per  offer 
submitted22.  While  larger  contracts  are  generally  associated  with 
higher costs, there appears to be a substantial element of fixed costs23. 
For  the  low  value  contracts  close  to  the  threshold  of  €125,000  this 
means  total  costs  can  amount  to  between  18-29%  of  the  contract 
value. In total, the cost for all procedures covered by the Directives is 
some  €5.6  billion  p.a.  or  1.3%  of  the  total  value  of  contracts 
published24.  These 
the  significant 
differences  across  Member  States  in  the  time  taken  to  conduct 
procurement. There was a difference of 180 days between the top and 
bottom performers (MS) in terms of time taken from the dispatch of a 
CN  to  the  award  of  a  contract,  across  all  procedures,  (minimum:61 

typical  costs 

reflect  also 

20 

21 

22 
23 

24 

Based  on  an  estimate  of  savings  of  5%  realised  for  the  €420  billion  of  public  contracts  which  are 
published at the EU level would translate into savings or higher public investment of over €20 billion. 
source:  the  Evaluation  Report.  See:  L.Vogel,  "Macroeconomic  effects  of  cost  savings  in  public 
procurement" Economic Papers 389, 2009. 
The problem drivers are highlighted in bold. For more detailed discussion of these drivers, see: annex 
8.3. 
See: section 8.8.4. 
PwC  study, page  91,  "It  turns  out  that procurement  costs are  almost  invariant  across  a  wide  range  of 
contract values." 
Source: PwC study, page 89. 

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(b) 

(c) 

and  maximum:241  days).  There  is  also  considerable  support  among 
stakeholders  for  measures  to  alleviate  administrative  burdens  related 
to  the  choice  of  bidder  e.g.  reducing  the  evidence  required  from 
bidders. Whilst much of this documentation is specified under national 
legislation,  the  EU  could  set  stricter  limits  on  the  documents  which 
can be requested. 

Complex  EU  rules  defining  scope  and  coverage  which  generate 
uncertainty,  lead  to  risk-averse  and  'box-ticking'  behaviour  by 
public  purchasers  to  the  detriment  of  the  quality  of  procurement 
outcomes.  The  EU  provisions  lay  down  prescriptive  requirements 
governing the organisation of procedures, subsequent communication 
with  all  participants  and  the  running  of  the  evaluation  of  tenders. 
There  are  many  'grey  zones'  regarding  the  activities  covered  by  the 
Directives  (e.g.  form  of  public-public  cooperation)  and  the  rules  that 
apply to different types of contract. Problems are also experienced in 
relation to the concept of "bodies governed by public law" contained 
within the Directives, which has resulted in a series of judgements by 
the  ECJ.  This  is  fertile  ground  for  error  and  uncertainty,  'gaming'  of 
the system or circumvention behaviours. Analysis of TED data shows 
that  in  30%  of  the  CNs  published  a  CAE  classifies  itself  as  "other" 
reflecting  either  its  confusion,  or  a  potential  desire  to  benefit  from  a 
more favourable, but possibly incorrect, regime. The other side of the 
coin is that this complexity is a source of litigation risk.  

these 

tasks  (other 

than  specifying  some 

The absence of clear counterparts at national level with responsibility 
for  strategic  oversight  of  public  procurement  administration  and  the 
effective implementation of EU procurement legislation has led to the 
emergence  of  different  models  and 
fragmented  national 
procurement administration and resource dispersion, resulting in 
inconsistent application, control and monitoring across the EU. At 
present,  the  EU  rules  do  not  touch  on  national  arrangements  to 
perform 
information 
requirements  that  Member  States  should  meet).  Confronted  with  the 
complex  challenges  implied  by  public  procurement  policy,  some 
(generally smaller and newer) MS (e.g. Slovenia, Lithuania, Portugal) 
have  established  well  resourced  central  procurement  organisations, 
able  to  provide  training  and  advice  to  individual  CAEs.  These 
Member States are better able to track and direct public procurement 
spend.  Others  have  dispersed  responsibility  for  the  organisation  of 
public  procurement  procedures  across  myriad  CAEs  who  are  poorly 
resourced,  entrusted  with  responsibility  for  procurement  procedures 
on  a  part-time  basis,  and  will  only  rarely  undertake  a  procurement 
procedure following EU rules. This context is ripe for administrative 
error,  and  inconstant  application  of  the  principles  and  provisions  of 
EU law. 25 The varied degree of professional procurement training 
and advice available in many countries may have resulted in errors, 
an  increased  risk  of  fraud  and  a  less  than  optimal  management  of 

25 

Source: the Evaluation Report, page 62 and pages 95-101.  

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resources,  which  would  leave  considerable  scope  for  further  cost 
efficiency  savings.  Recent  audits  of  projects  funded  by  Community 
funds have found around 40% error rates due to the wrong application 
of  public  procurement  rules  and,  in  some  instances,  the  incorrect 
transposition of the Directives into national legislation26. Three major 
weaknesses were identified:  

• 

• 

Inadequate assessment of bids; 

Absence  of  tendering  or  award  of  contract  based  on 
inappropriate  procedure  and  award  of  supplementary 
contracts without competition; 

• 

Non-compliance with publication requirements. 

Such  errors  mean  that  certain  high  value  purchases  are  not  being 
opened  to  EU  wide  competition.  As  a  result  CAEs  may  not  be 
obtaining  optimal  outcomes.  Some  businesses  are  being  excluded 
from competing for these contracts or are not competing on an equal 
footing  to  others.  Errors  of  this  nature  are  more  often  related  to  the 
conduct of a procurement process and a lack of knowledge rather than 
to  the  procedures  set  out  in  legislation  and  therefore  improvements 
could be expected as a result of better monitoring and control at 
Member State level, combined with the provision of greater support. 
An  analysis  of 
the 
Commission since 2005 identified a similar range of errors and issues 
to the above audits, implying that such mistakes are not "one-offs" but 
occur repeatedly. It is extremely unlikely that the errors identified by 
the Commission's audits are limited to Community funded projects. 

infringement  procedures 

launched  by 

the 

(d) 

(2) Missed opportunities for society 

The  current  rules  may  not  always  allow  stakeholders  to  make  the  best  use  of  the 
resources  at  their  disposal  and/or  the  best  (or  optimal)  purchasing  choices.  This 
generates missed opportunities for society which appear mainly as the result of: 

(a) 

Problems and uncertainty affecting the ability of purchasers to legally 
and  consistently  utilise  public  procurement  rules  to  achieve  strategic 
policy goals27. Despite a number of communications from the Services 
of  the  Commission  intended  to  clarify  the  practicalities  of  how  to 
integrate  other  policy  objectives  when  applying 
the  public 
procurement  rules28,  many  stakeholders  find  that  problems  of  legal 

26 

27 

28 

"The  non-respect  of  public  procurement  rules  alone  accounts  for  43%  of  all  quantifiable  errors  and 
makes  up  for  approximately  three  quarters  of  the  estimated  error  rate  [for  the  Structural  Funds]", 
source:  The  European  Court  of  Auditors'  annual  report  for  the  financial  year  2009,  available  at: 
http://eca.europa.eu/portal.pls/portal/docs/1/7158724.PDF 
For  example,  addressing  issues  such  as  green  public  procurement  or  greater  energy  efficiency; 
supporting  social  policies  such  as  fair  trade  and  employment  conditions;  developing  new,  innovative 
products and technologies. 
An  interpretative  communication  explaining  how  environmental  considerations  could  be  integrated 
within  procurement  practice  (2001);  The  Commission  Communication  on  Integrated  Product  Policy 

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(b) 

certainty remain. More significantly, some consider that the provisions 
of EU directives do not leave sufficient latitude to permit other policy 
considerations  to  be  taken  into  account  when  awarding  contracts. 
Whilst  many  MS  have  undertaken  national  or  regional  initiatives  to 
achieve  other  policy  objectives  via  public  procurement,  it  is  not  yet 
clear  how  successful  these  policies  have  been.  In  some  cases,  where 
the integration of some strategic objectives incurs additional costs that 
are directly linked to the life-cycle and can be reliably estimated and 
verified, they can be evaluated through the use of economically most 
advantageous  tender  (EMAT)  criteria  using  a  well  understood  life 
cycle costing methodology. There is, however, considerable difficulty 
in evaluating the trade-off between some other strategic objectives and 
value for money in other cases, where there may be no widely agreed 
or reasonable method of estimating, verifying or comparing the actual 
additional costs involved.  

Inflexible procedures, defined at EU level, that do not allow CAEs to 
make  the  best  use  of  non-standard  procurement  solutions  (e.g. 
purchasing  innovative  goods  and  services29,  ability  to  integrate  other 
strategic goals, etc). As a result, many respondents to the GP call for 
more  flexibility  in  the  conduct  of  procedures  (with  suggestions 
including:  greater  ability  to  negotiate;  a  less  rigid  sequencing  of 
examination  of  selection  and  award  criteria;  ability  to  take  into 
account previous experience with a bidder30, greater use of life cycle 
costing  approaches,  etc.)  A  clear  majority  of  respondents  advocate 
further  promoting  and  stimulating 
through  public 
procurement.  The  impact  of  green  procurement  in  three  major  areas 
which  offer  the  greatest  potential  environmental  benefit  (as  covered 
by  the  current  defined  Green  Public  Procurement  (GPP)  criteria)  - 
construction, transport and IT equipment - would extend to contracts 
worth more than €100 billion.31 Socially responsible criteria could be 
relevant  to  at  least  all  works  and  service  contracts  or  some  77%  of 
above threshold procurement. 

innovation 

(c) 

Risk  averse  behaviour  by  authorities  afraid  of  litigation  (legal 
uncertainty)  –  there  is  some  evidence  that  CAEs  apply  the  full  EU 
rules, when they might not have to, out of fear that their interpretation 
of  the  applicable  regime  could  be  wrong.  For  example,  18%  of  all 
contracts  published  in  OJ/TED  are  below  threshold,  but  have 
nonetheless  been  subjected  to  the  full  procedure  applicable  to 
contracts above the thresholds. Also around 7% of transactions which 

(2003); A handbook on environmental public procurement (2004); The Commission Communication on 
the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan (2008), A 
Guide to Taking Account of Social Considerations in Public Procurement (2010), etc.  
A  lack  of  flexibility  has  been  linked  to  reasons  which  prevent  CAEs  from  taking  advantage  of  more 
innovative commercial offers; source: "The impact of EU procurement legislation on councils", Local 
Government Group (UK), December 2010 page 13. 
The  current  Directives  permit  two  award  criteria:  the  use  of  lowest  price  or  economically  most 
advantageous tender (hereafter: EMAT). 
Evaluation report page 77. 

29 

30 

31 

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24 

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follow the full regime related to services are actually B services which 
should  have  followed  a  lighter  regime.  Similarly,  many  authorities 
have not considered switching to e-procurement as they are uncertain 
of what it means and fear that any errors they commit would result in 
legal proceedings being brought by firms32. Many smaller CAEs will 
never  have awarded a contract above the thresholds and without  this 
experience  or  appropriate  legal  resources,  they  will  be  extremely 
aware of the dangers of getting it wrong when they do so for the first 
time.  

(d) 

Insufficient  instruments  at  (national  and)  EU  level  to  efficiently 
protect  against  possible  violations  of  public  procurement  law,  which 
the  different 
less  favourable  outcomes.  Again, 
may  generate 
governance  models  and  administrative  capacities  developed  by  MS 
may be affecting the timely identification of and reaction to possible 
bad  practices33.  Several  respondents  to  the  GP  suggested  that  there 
was  a  need  to  build  additional  competence  amongst  CAEs  and 
improve monitoring arrangements. 

(e) 

Due  to  a  combination  of  these  two  problems  (sub-optimal  cost-
efficiency  of  procurement  and  missed  opportunities  for  society)  it  is 
not  possible  for  the  economy  in  general  to  obtain  "best  value  for 
money", a key public procurement objective.  

(3) National rather than European public procurement market 

Despite nearly 40 years of public procurement legislation one of the key objectives – 
the  creation  of  a  single  market  -  has  yet  to  be  achieved.  The  evaluation  found  that 
direct cross-border procurement accounts for 1.6% of awards or roughly 3.5% of the 
total value of contract awards published in OJ/TED during 2006-200934 and that 50% 
of  contracts  above  EU  thresholds  are  awarded  within  the  distance  of  100  km35. 
Indirect cross-border procurement through subsidiaries or foreign affiliates makes up 
another  11.4%  of  awards  or  13.4%  by  value,  but  in  many  respects,  public 
procurement markets remain national rather than European36. 

In particular, this lack of integration is affected by: 

(a) 

A  lack  of  convergence  in  the  rules  concerning  the  integration  of 
strategic goals in public procurement. The 2004 Directives allowed 
strategic  and  environmental  criteria  to  be  taken  into  account; 

32 

33 

34 

35 
36 

Source: the Evaluation of the 2004 action plan for e-procurement and findings from the open hearing 
held in Brussels on 26 November 2010. 
A recent impact assessment carried out for DG HOME found that whilst only a small proportion of total 
corruption  costs  (estimated  across  the  EU  to  amount  to  1%  of  EU  GDP)  can  be  attributed  to  public 
procurement, it also estimated that in one MS, the cost of organised public procurement corruption in 
terms of fiscal and public welfare loss accounted for around "€ 0.7 billion losses to public procurement 
misappropriations in 2007-2008".  
Source:  "Cross-border  procurement  above  EU  thresholds",  Rambøll  Management,  May  2011 
(hereafter: Rambøll study), page 38. 
Source: Rambøll study, pages 39 and 80. 
See sections 8.3.4.1 to 8.3.4.3. 

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(b) 

subsequent  EU  action  has  concentrated  on  the  provision  of  soft  law 
measures. At present, much discretion is left at national level and even 
where similar national objectives have been identified, they are being 
implemented through different commitments/means and to a different 
extent  across  the  EU.  For  example,  businesses  moving  between 
contracts  often  face  different  green  criteria  for  the  same  product 
group.  A  certain  fragmentation  of  the  market  already  exists  (within 
countries as well as between. In most cases national action plans  are 
recent, so the actual fragmentation is still small and the risk could still 
be avoided if appropriate action were taken. 

Regulatory  and  "natural"  market  barriers  (e.g.  requirements 
stemming  from  both  inside  and  outside  the  EU  Directives  and  other 
EU  law  and  language,  geographic  location)  cause  asymmetric 
market  access  across  Europe,  lowering  involvement  of  SMEs  in 
particular,  and  cross-border  procurement  in  general.  As  mentioned 
above, procurement contracts awarded directly across borders are still 
limited.  This  can  be  explained  by  both  supply  and  demand  factors. 
Low  levels  of  import  penetration  may  be  due  to  the  composition  of 
public  demand,  which  is  dominated  by  services  that  are  sourced 
locally.  However,  recent  survey  data  shows  that  companies  are  also 
reluctant to tender cross-border. In a recent large scale survey around 
73%  of  firms,  otherwise  active  in  public  procurement,  said  that  they 
have not made any cross-border tenders in the last three years37. The 
fact  that  the  average  success  rate  when  bidding  abroad  is  lower  than 
when  bidding  at  home  may  go  some  way  to  explain  this  behaviour. 
Additionally, a recent survey highlights inertia/lack of experience and 
language  barriers  as  the  two  main  obstacles  preventing  cross-border 
bidding,  whilst  legal  barriers  were  ranked  fourth38.  Some  of  these 
issues  are  technical  and  result  from  a  certain  lack  of  recognised 
standards  e.g.  electronic  signatures.  The  most  significant  factor 
affecting SME participation is the size of a contract – SMEs do not the 
resources or capacity to bid for or fulfil requirements of large public 
contracts and in general, contracts above €300,000 seem to be beyond 
their  capacity  (50%  of  contracts  are  below  €390,00039).  Both  SME 
and cross-border bidders are also hampered by certain administrative 
requirements (e.g. provision of evidentiary documents, where the EU 
legislation  outlines  the  key  types  of  document  but  where  many 
additional  requests  are  added  at  national  level)  and  problems  in 
obtaining information. 

(c) 

The  fact  that  public  procurement  markets  are  not  fully  integrated  is 
also  a  source  of  missed  opportunities  for  the  wider  economy  –  the 
counterfactual, as discussed in the late eighties, was that "the failure to 

37 
38 

39 

Source: Rambøll study page 87.  
The share of SMEs winning public procurement contracts has not changed significantly since 2002; in 
2006-2008  they  won  between  58-61%  of  above  threshold  contracts,  representing  between  31-38%  of 
the total value of contracts – source: "Evaluation of SMEs access to public procurement markets in the 
EU", GHK, September 2010 (hereafter: GHK study), page 22. 
Source: PwC study page 91. 

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achieve a single market has been costing European industry dearly in 
unnecessary  costs  and  lost  opportunities"40.  Although  savings  have 
been achieved since then, Europe 2020 and Mario Monti's report both 
point  out  that  much  more  could  still  be  done.  Strictly  comparable 
figures are not available but the figures for total public sector import 
penetration remained 11 percentage points below private sector import 
penetration between 1995 and 2005. Some but not all of this may be 
accounted  for  by  the  structure  of  public  sector  demand  or  natural 
barriers. 

(d) 

Taken  together,  these  three  key  problems  lead  to  the  conclusion  that 
the  Internal  Market  is  not  achieving  its  full  potential  in  public 
procurement.  All  three  problems  are  important  and  affect  the 
functioning  of  the  Internal  Market  in  different  ways,  making  it 
difficult to identify one of them as the primary issue to be addressed.  

2.3.2.  Graphical representation of problem drivers 

These  three  main  problems  might  be  generated  by  various  factors  related  to  the 
functioning  of  public  procurement  regime  (e.g.  procedural  issues,  policy  choices, 
market failures, etc). The problem drivers identified above as the origin of these three 
key problems have been grouped under the following five headings: 

– 

– 

– 

– 

– 

Scope and coverage of public procurement rules; 

Procedures; 

Strategic public procurement;  

Access to public procurement markets;  

Governance (MS administrative organisation). 

Relationships  between  these  problems  and  relevant  drivers  are  summarised 
graphically in the problem tree (Figure 6) below. Further detail and information on 
the problem statement and drivers is provided in section 8.3). 

40 

"Europe 1992 - The overall challenge", Commission of the European Communities, SEC (88) 524 final, 
Brussels, 13 April 1988. 

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Figure 6): Problem tree for the modernisation of public procurement Directives 

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28 

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2.4. 

How would the problem evolve, all things being equal? 

If  no  changes  were  introduced,  the  current  trends  in  transparency  and  competition 
would  probably  remain  high  and  could  even  increase  slightly,  with  an  associated 
“knock-on” benefit to prices. However, despite these positive influences, some less 
promising developments could be expected. 

– 

– 

– 

– 

The current scope of the Directives captures certain categories of transactions, 
actors or markets for which such rules may not be proportionate or productive 
(e.g.  contracts  relating  to  arrangements  between  two  public  entities  or  low 
value contracts). Continuing this approach would prolong uncertainty about the 
treatment  of  certain  common  forms  of  procurement  (public-public  co-
operation,  shared  services  etc).  Continued  uncertainty  about  the  scope  of 
application could also result in the non-application of procurement disciplines 
to  certain  markets  or  transactions  where  they  would  be  appropriate  (by 
allowing circumvention behaviour or maintaining loopholes).  

If no change is made to the existing procedures, any disproportionate costs of 
procedures (especially for lower value contracts) would persist. The continuing 
lack  of  flexibility  for  CAEs  and  firms  could  get  worse,  as  could  the 
consequences  if  they  become  more  frustrated  by  their  inability  to  adapt  to 
changing markets or incorporate strategic criteria. This could ultimately result 
in lower compliance rates. Also, no increased take-up of e-procurement could 
be  expected.  If  no  improvements  or  clarification  of  rules  defining  the 
aggregation  of  demand  (e.g.  CPBs,  framework  agreement,  DPS)  are 
introduced, lost opportunities (for example due to savings that could have been 
generated because of the economies of scale) would persist and accumulate.  

The status quo would restrict the scope for CAEs to use public procurement to 
achieve  strategic  goals.  Within  the  limits  imposed  by  the  legislation,  MS 
implement  uncoordinated  national  action  plans  or 
would  continue 
approaches,  with  the  associated  risks  of  creating  legal  or  policy  barriers  to 
cross-border procurement. 

to 

The  current  rates  of  cross-border  and  SMEs  access  have  been  stable  for  the 
past five years or so and are unlikely to change if no action is taken. Similarly, 
there  would  be  no  real  incentive  to  change  the  different  models  for 
governance, leading to a perpetuation of the current level of procedural failure, 
missed opportunities and sub-standard procurement administration in those MS 
which  do  not,  of  their  own  volition,  take  steps  to  overhaul  their  national 
procurement administration.  

To conclude, if no action is taken in the five above mentioned problem areas, cost-
inefficiency will at best stay as it is, and could even deteriorate. The fear of litigation 
which  has  lead  to  a  tick-box  approach  to  compliance,  rather  than  outcome  driven 
legal  uncertainty. 
could  further 
Administrative costs that are the source of missed opportunities for society41 would 

increase  costs  and  continue 

trend  of 

the 

41 

For example, administrative costs borne by businesses due to an obligation to provide documents and 
certificates during public procurement procedures would accumulate (all bidders). Usually, four out of 

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29 

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continue. Sub-optimal choices, particularly in strategic terms, would continue due to 
limits on, and inconsistencies in, approaches, which could also prevent convergence. 
Markets  would  continue  to  remain  predominantly  national  and  hence  it  seems 
reasonable  to  assume  that  the  full  benefits  of  the  Internal  Market  for  public 
procurement would not be achieved.  

2.5. 

The EU's right to act and justification 

The  EU  competence  to  take  action  on  public  procurement  matters  comes  from  the 
articles of the Treaty on the Functioning of the European Union (TFEU). Whilst this 
Treaty does not contain any specific provisions regarding public procurement, it lays 
down the  fundamental principles which are generally applicable and which have to 
be  observed  by  contracting  authorities  and  entities  when  awarding  all  contracts. 
These principles are: the freedom of movement of goods (Article 34 et seq TFEU), 
the  freedom  to  provide  services  (Articles 56  et  seq.  TFEU)  and  the  freedom  of 
establishment (Articles 49 et seq. TFEU).  

Finally,  the  right  of  the  EU  to  act  is  already  established  by  the  existence  of  the 
Directives. Given that many of the problems identified above are the result of actions 
and interpretations resulting from these Directives, it follows that the EU level action 
is required to address these issues. 

3. 

OBJECTIVES 

The evaluation finds that the general objectives of existing public procurement policy 
are still relevant. Indeed, given the current strained public finances, they may be even 
more  relevant  since  they  seek  to  ensure  that  public  procurement  policy  fulfils  its 
potential and delivers value for money to society. As a result of the issues identified 
in the problem statement, the following objectives have been identified for the three 
different hierarchical levels (i.e. general, specific and operational).  

3.1. 

General objectives 

The  evaluation  shows  that  the  overall  objectives  of  existing  public  procurement 
policy are still relevant. Indeed, given the current strained public finances, they may 
be even more relevant given that that they seek to: 

– 

– 

Promote  EU-wide  and  cross-border  competition  for  contracts  (i.e.  creating  a 
fair / non-discriminatory and level playing field for all suppliers, so that the EU 
public procurement market is accessible to companies from across the EU); 

Deliver  best  value  for  money  whilst  achieving  the  best  possible  procurement 
outcomes for society (and hence, ultimately, making the best use of taxpayer's 
money);  

– 

Aid the fight against corruption. 

five  bidders  are  not  successful,  so  the  time  and  effort  that  they  invested  in  fulfilling  administrative 
requirements  is  basically  lost  for  the  economy.  Similarly,  time  and  cost  spent  currently  by  firms  and 
CAEs on fulfilling publication requirements (filling in the standard forms) would continue to be high, if 
no simplification measures are implemented.  

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3.2. 

Specific objectives 

Given the problems outlined in Section 2.3 above (Problem definition), the specific 
objectives identified for this intervention are to:  

– 

– 

– 

Improve the cost-efficiency of EU public procurement rules and procedures;  

Take full advantage of all  opportunities to deliver the best possible  outcomes 
for society; 

Create European rather than national markets for procurement. 

3.3. 

Operational objectives 

Five  different  problem  themes  have  been  highlighted.  To  address  these  individual 
themes  and  deliver  focussed  solutions,  the  following  operational  objectives  have 
been set: 

1.  Scope and coverage 

– 

– 

Ensure  that  the  rules  capture  the  appropriate  actors  and  subject-matter  of 
procurement; 

Provide clarity and legal certainty with respect to said scope and coverage. 

2.  Procurement processes/procedures 

– 

– 

Streamline and simplify procurement procedures to (i) reduce operational costs 
(ii) ensure proportionality and (iii) provide for more legal certainty;  

Improve the flexibility of procedures to better respond to purchasing needs of 
authorities.  

3.  Strategic public procurement  

– 

Help  public  procurers  to  use  public  procurement  to  support  other  policy 
objectives  (e.g.  environmental,  social,  initiatives  related  to  the  innovative 
economy) in a legally compliant and fair manner. 

4.  Market access 

– 

Simplify the rules and introduce instruments to increase the transparency of EU 
public  procurement  rules  and  open-up  the  markets  to  greater  cross-border 
competition;  

– 

Ensure that the rules facilitate participation by SMEs. 

5.  Administrative organisation 

– 

Ensure  consistent  application,  controls  and  monitoring  of  public  procurement 
policy and outcomes across MS;  

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31 

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– 

Reduce  errors  and  problems  with  compliance  with  EU  public  procurement 
rules. 

The  table  presented  in  section  8.4)  summarises  the  different  levels  of  objectives 
which  have  been  identified,  mapping  them  to  the  three  key  problems  and  the 
associated  problem  drivers  which  have  been  identified.  It  is  clear  that  there  are 
tensions between these objectives, and as a result, certain trade offs will need to be 
considered42. The content of any amended rules and the concrete measures proposed 
should  aim  at  making  life  easier  for  CAEs  and  firms  whilst  at  the  same  time 
continuing  to  guarantee  a  high  level  of  transparency  and  efficient  safeguards  for 
equal treatment of bidders. These tensions and trade-offs will be highlighted further 
in the discussion of impacts presented in chapter 5. 

4. 

POLICY OPTIONS 

The  problems  identified  above  manifest  themselves  in  many  and  diffuse  ways. 
Tackling  them  comprehensively  could  entail  a  large  number  of  changes  affecting 
many  different  aspects  of  the  legislation.  The  GP  invited  stakeholder  comment  on 
approximately  120  adjustments  to  the  current  legislation.  This  chapter  proposes  an 
approach for structuring this extensive set of possible adjustments under a number of 
options which will then be analysed in chapter 5.  

Before  considering  the  range  of  possible  concrete  adjustments  to  the  Directives 
Section 4.1 presents some more radical options – including outright abolition of the 
Directives  or  the  application  of  fully  harmonised  rules  to  a  larger  set  of  public 
purchasing procedures including some below-threshold procurement.  

4.1. 

Radical options 

When  initially  considering  all  the  possible  alternatives,  four  broad  types  of  action 
were  identified.  At  one  extreme,  consideration  was  given  to  abolishing  the  EU 
directives,  whilst  action  at  the  other  end  of  the  spectrum  would  lead  to  full 
harmonisation  or  the  creation  of  a  single,  pan-European  system  for  public 
procurement.  In  between  these  two  extremes  fall  two  other  categories  of  action:  to 
keep the Directives as they are (no change) or to introduce changes within the current 
framework (some change). This section considers the two radical options - abolition 
of the Directives and full harmonisation.  

4.1.1.  Abolition of the Directives 

One  radical  option  would  be  to  abolish  the  existing  EU  public  procurement 
legislation  and  apply  only  the  principles  identified  in  the  TFEU  (i.e.  move  to  a 
"principles  based"  set  of  procurement  rules).  However,  the  evaluation  found  that 
whilst improvements were possible, the Directives deliver benefits that significantly 
outweigh  costs.  The  transparency  and  procedural  regulation  introduced  by  the 

42 

For  example:  simplifying  the  rules  and  procedures  should  not  jeopardise  essential  guarantees  for  the 
open and free access of all European firms to public contracts in Europe. Depending on how it is done, 
the integration of wider policy objectives could lead to further checks and considerations which might, 
at least at first glance, complicate the rules or the process of their application. 

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Directives  have  boosted  competition,  which  in  turn  has  yielded  the  hoped  for 
improvements in procurement outcomes (both savings and qualitative performance). 
The  Directives  are  conservatively  estimated  to  deliver  cash  savings  of  around  €20 
billion  on  the  €420  billion  advertised  in  accordance  with  the  Directives.  The  total 
cost  for  purchasers  and  suppliers  of  organising  public  procurement  procedures  in 
compliance with the requirements of the legislation is around €5.6 billion per annum 
–  and  we  estimate  that  2/3  of  this  cost  would  remain  even  if  the  Directives  were 
abolished.  Therefore,  the  abolition  of  EU  public  procurement  legislation  would  be 
self-defeating. Removing the Directives would also create a "vacuum" in relation to 
the EU's international obligations. Each MS is a signatory to these treaties and would 
have  to  individually  put  in  place  measures  to  comply  with  the  conditions  to  which 
they have agreed.  

Many of the varied stakeholders at the Conference on 30 June commented that "the 
Directives have proved their worth", whilst nonetheless going on to identify areas for 
further improvement. Although not an explicit question in the Green Paper, it could 
be inferred from many replies that such an approach was not supported.  

In view of the above, this option has not been considered further. 

4.1.2.  Full harmonisation 

An alternative broad approach would be to propose a full harmonisation of the public 
procurement rule-book across the EU. This could entail deeper and more prescriptive 
harmonisation of the current rules which currently leave considerable latitude to MS 
regarding  their  implementation.  It  could  also  entail  extension  of  EU  procurement 
procedures  to  some  of  the  estimated  2  million  public  procurement  procedures  for 
purchases below the thresholds of the Directives (an action likely to prove unpopular 
with  stakeholders,  even  if  a  majority  of  GP  respondents  recognised  a  need  for 
additional  guidance  on  below  threshold  procurement).  This  could  ensure  greater 
consistency  and  legal  certainty,  increase  transparency,  and  increase  the  leverage 
effect  of  EU  procurement  legislation  in  support  of  other  policy  goals.  It  would 
however run directly counter to the concerns regarding the over-intrusiveness of EU 
regulation  and  disproportionate  costs  resulting  from  the  imposition  of  strict 
procedural  disciplines.  Moreover,  it  is  not  clear  to  what  extent  such  an  approach 
would yield countervailing benefits given the limited cross-border interest in small-
value procurement procedures.  

Given  that  this  approach  would  exacerbate  some  of  the  critical  problems  identified 
above  without  a  strong  probability  of  delivering  compensating  benefits,  this  option 
has not been considered further.  

4.1.3.  Conclusions on radical options 

Neither  of  these  radical  options  is  examined  further  since  this  initial  analysis 
suggests that the disadvantages would clearly outweigh any benefits. 

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4.2. 

Development and screening of possible options 

The  rest  of  the  Impact  Assessment  analysis  will  concern  itself  with  policy  options 
ranging  from  "no  change",  through  a  menu  of  options  which  vary  in  terms  of  the 
level of change to the current legislation.  

In impact assessment terms, an option is defined by its content e.g. possible action(s) 
and  the  means  by  which  that  content  will  be  delivered  e.g.  soft  law,  legislative 
change.  This  section  summarises  how  the  options  /  option  packages  presented  in 
Tables 2 to 6 were constructed.  

4.2.1. 

"No change" options 

Preserving  the  current  situation  would  perpetuate  a  system  that  gives  rise  to 
unintended  consequences,  missed  opportunities  and  high  costs.  However,  this 
solution  can  only  be  finally  ruled  out  after  measuring  the  impacts  of  any  other 
proposals  against  the  baseline  of  doing  nothing.  It  could  yet  be  possible  that  the 
status  quo  provides  the  best  solution  for  a  particular  problem  area.  Hence  five  no 
change  options  have  been  defined  –  for  scope,  procedures,  strategic  procurement, 
access  and  governance.  The  consequences  of  following  this  course  of  action  are 
discussed in more depth in section 2.4. 

4.2.2.  Non-legislative / soft law options 

Non  legislative  approaches  may  constitute  a  viable  and  proportionate  response  to 
certain  issues.  There  may  be  possibilities  for  soft-law  solutions  providing  further 
guidance  and  explanation  on  particular  aspects  of  the  existing  rules.  For  example, 
benchmarking and best practice sharing between MS may be an effective means of 
improving public procurement administration and practice.  

4.2.2.1.  Narrowing down the soft law options 

Considerable  guidance  has  already  been  provided  addressing  many  aspects  of  the 
Directives.  The  Commission  services  have  also  provided  additional  training  and 
assisted  in  the  development  of  training  related  to  the  existing  public  procurement 
rules. Some of the main initiatives and documents are listed in the following box. 

Interpretative documents, guidance and soft law relating to the implementation 
of EU public procurement legislation: 

Interpretative Communication on "Community law applicable to public procurement 
and  the  possibilities  for  integrating  environmental  considerations  into  public 
procurement” (COM(2001) 274); 

Buying Green! – A Handbook on environmental public procurement (2004); 

"Buying  Social  -  A  Guide  to  Taking  Account  of  Social  Considerations  in  Public 
Procurement" (SEC(2010) 1258 final); 

"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 final); 

EN 

34 

   EN 

 
Interpretative  Communication  on 
to  public 
procurement  and  the  possibilities  for  integrating  social  considerations  into  public 
procurement (COM(2001) 566 final); 

the  Community 

law  applicable 

Pre-commercial  procurement  “Pre-commercial  Procurement:  Driving  innovation  to 
ensure  sustainable  high  quality  public  services 
(Commission 
Communication – 2007); 

in  Europe” 

Risk  management  in  the  procurement  of  innovation  -  Concepts  and  empirical 
evidence  in  the  European  Union,  Expert  Group  Report  2010  (24229  EN), 
Directorate-General for Research, European Research Area; 

functional 

for  conducting  electronic  public 
E-procurement: 
procurement  under  the  EU  framework,  January  2005,  produced  by  European 
Dynamics 
Commission; 
of 
http://ec.europa.eu/idabc/servlets/Doc1ad3.pdf?id=22191 

requirements 

European 

behalf 

S.A. 

the 

on 

While  this  guidance  has  helped  to  clarify  how  the  existing  provisions  can  be 
implemented, it cannot compensate for gaps or shortcomings in the legislation. Many 
of the problems in these areas stem from the absence of a sufficient legal treatment of 
the  issues,  or  restrictive  provisions  which  prevent  authorities  from  pursuing 
alternative  policy  approaches  (e.g.  as  it  is  the  case  for  some  potentially  legitimate 
approaches for strategic procurement). By their very nature, interpretative documents 
or  guidance  cannot  overcome  problems  which  are  inherent  to  the  current  legal 
framework. After considering in more detail the possible content of the five soft law 
options initially identified, it was decided that no significant benefits were likely to 
be  achieved  through  the  provision  of  further  guidance/training/clarification  in  the 
areas of Scope, Procedures and Strategic procurement. Thus only soft-law options for 
Access and Governance will be considered further.  

4.2.3.  Framing the legal options  

The two recent GPs on public procurement asked over 120 questions, each relating to 
a  potential  issue  for  modification  or  inclusion.  Whilst  very  extensive,  these  two 
consultations  were  not  necessarily  exhaustive.  Further  concerns  or  areas  for 
improvement  were  identified  through  the  evaluation  and  other  independent  sources 
and reports.  

Even  after  grouping  together  similar/related  questions  and  issues  over  70  possible 
changes  to  the  Directives  have  been  identified,  which  are  listed  in  full  in  section 
(annex) 8.5.  

A detailed and separate analysis of all these possible changes to the Directives would 
not  be  proportionate.  It  is  not  possible  to  undertake  a  meaningful  analysis  of  the 
impacts  of  each  and  every  legislative  adjustment  that  could  be  envisaged,  on  the 
basis of existing information, with the resources available and within the guidelines 
for impact assessment reports. The subsequent sections of this chapter explain in two 
steps the approach followed to permit a concrete assessment of such a wide number 
of different possible concrete changes to the Directives.  

EN 

35 

   EN 

 
Step 1: Framing the critical strategic options 

The principal changes, identified through consultations and evaluation, are grouped 
in  terms  of  their  relevance  in  tackling  the  key  problems  described  above.  These 
strategic  options  centre  on  the  critical  choices  to  be  made  in  terms  of  the  ambition 
and  impact  of  the  legislative  change,  and  the  degree  of  change  compared  to  the 
existing legislation. This leads to a menu of options for each problem area, ranging 
from  'soft  law'  through  evolutionary/incremental  legislative  change  to  a  more 
fundamental departure from the current scope or regulatory approach. These strategic 
options are mapped out in tables 2 - 6. 

Two  broad  categories  of  legislative  change  have  been  identified,  reflecting  the 
different levels of ambition possible. In general, the first legislative option presented 
considers  changes  and  improvements,  which  build  on  current  principles  and 
provisions (i.e. the left-hand side column under LEGI options). Such actions would 
clarify  existing  legislation  or  introduce  new  possibilities,  but  not  constitute  a 
fundamental  change  to  the  scope  or  approach.  In  broad  terms,  stakeholders  would 
continue to operate within a familiar framework. This corresponds to an incremental 
evolution  of  existing  principles  to  respond  to  changing  market  conditions  or  new 
policy challenges. 

The second legislative option for each problem area considers changes which seem 
more fundamental in nature compared to the approaches within public procurement 
legislation  until  now  (i.e.  the  right-hand  side  column  under  LEGI  options).  Such 
options consider more prescriptive action  e.g. making compulsory a certain type of 
purchase  or  behaviour  on  the  part  of  CAEs  (e.g.  moving  away  from  "how  to  buy" 
and  considering  "what  to  buy")  or  actions  which  entail  a  departure  from  core 
principles  of  existing  legislation  (e.g.  that  recourse  to  negotiated  procedure  is 
exceptional). The classification of a particular legislative adjustment in one or other 
category is based on an appreciation by DG MARKT of how radical a change is, in 
relation  to  both  the  current  and  previous  acquis.  The  evaluation  of  options  will 
abstract  from  the  precise  form  of  the  legislative  instrument  at  this  stage.  Further 
discussion of the regulatory form is provided in section 5.6.  

Step 2: Identification of headline actions under each legislative option for deeper 
analysis 

Once this grouping was established, we have identified within each strategic option, 
one  or  two  headline  actions  from  the  full  menu  of  actions.  The  headline  actions 
identified are expected to be the most significant changes under each option and the 
ones  most  deserving  of  deeper  analysis  in  terms  of  the  expected  impacts  in  the 
subsequent chapters. 

The  "headline  actions"  have  been  selected  from  the  extended  list  of  around  70 
possible changes after assessment against the following criteria (the results of this are 
set out in annex 8.5): 

– 

Economic  impact,  in  the  sense  of  the  size  of  the  market  affected  and  the 
potential  change  to  the  transaction  process  (scored  1  –  5,  where  1  was  Low, 
and 5 was High);  

EN 

36 

   EN 

 
– 

– 

Relevance  to  tackling  implementation  problems  with  the  EU  legislation 
(identified in chapter 2);  

Ability  to  improve  the  functioning  of  public  procurement  markets  (scored 
High, Medium, Low); 

For each action, the balance of stakeholder opinion, as expressed through responses 
to the GP, is also presented. (Annex) 8.6 provides a more detailed description of the 
content of each headline action. 

The  analysis  of  the  impacts  in  subsequent  chapters  will  refer  primarily  to  the 
expected  impacts  of  the  headline  actions.  The  discussion  will  therefore  be  framed 
primarily in terms of these measures, but the analysis and reflections will provide a 
basis for drawing general conclusions on the critical choice and the related issues.  

The following acronyms are used to describe the legislative options discussed: 

SCO.LEGI.TARGET: targeted adjustments & clarification of boundaries under 

Scope 

SCO.LEGI.REDUCE: significant reduction of Scope 

PRO.LEGI.DESIGN: improve design of Procedures 

PRO.LEGI.FLEXIB: increase choice available to CAEs in Procedures 

STR.LEGI.FACILIT:  facilitate  Strategic  public  procurement,  leaving  the 

choice of action to Member States / CAEs 

STR.LEGI.ENFORC: enforce Strategic public procurement at an EU level 

ACC.LEGI.FACILIT: facilitate Access to EU public procurement markets 

ACC.LEGI.ENFORC: enforce at an EU level certain tools for Access 

GOV.LEGI.TARGET: optimise the use of resources to improve Governance 

GOV.LEGI.ENHANC:  enhance  control  & 

responsibility 

to 

improve 

Governance 

EN 

37 

   EN 

 
4.2.4.  Detailed mapping of options 

Table 2): Scope 

SCO.NC 
Maintain 
the  status 
quo 

SCO.SOFT 
Guidance 
training 
clarification 

/ 
/ 

SCO.LEGI.TARGET 
Critical choice: 
Targeted  adjustments  to  current  scope  of  public  procurement 
legislation 
Problems addressed: 
- Complex and unclear rules defining scope and coverage lead 
to  uncertainty,  circumvention  behaviour,  and  arbitrary 
inclusion/exclusion of some transactions – all at margins. 

The actions under this option should simplify the identification 
of  who  and  what  is  covered  by  the  EU  public  procurement 
rules. 

Headline actions(s)43: 
- Higher threshold for social services , with a special regime for 
social services above this threshold  
- Inclusion of all former B-services (except for social services) 
in the regular regime  
Examples of other (possible) actions: 
- Establish conflict of laws rule to determine the applicable 
national law and jurisdiction 
- Clarify exemptions (e.g. for public-public cooperation and 
other); 
- Clarify notion of bodies governed by public law;  
- Clarify exclusion grounds. 

SCO.LEGI.REDUCE 
Critical choice: 
Far-reaching  change  to  scope  of  the  current  rules  involving 
exclusion of entire groups of purchasers or transactions. 
Problems addressed: 
- Complex and unclear rules defining scope and coverage lead 
to  uncertainty,  circumvention  behaviour,  and  arbitrary 
inclusion/exclusion of some transactions. 
large 
-  Application  of  costly  regulatory  apparatus 
populations  of  purchasers  or  transactions  without  sufficient 
countervailing benefit. 
Greater  certainty  and  clarity  should  result  from  the  exclusion 
of  particular  groups  or  purchases  where  there  are  reasons  to 
doubt that the current rules should apply,  
Headline actions(s): 
- Raise the thresholds 

to 

Examples of other (possible) actions: 
- Radically modify the material scope of the Directives by 
excluding sub-central authorities;  
- Radically modify the material scope of the Directives by 
exclusion of B services;  
- Exclude the utilities from procurement rules altogether;  
- Extending scope to below thresholds procurement.  

43 

EN 

For a more detailed description of the content of each headline action, please refer to section (annex) 8.6. 

38 

EN 

 
  
 
 
 
 
 
 
 
 
 
                                                 
Table 3): Procedures 

PRO.NC  PRO.SOFT  PRO.LEGI.DESIGN 
Maintain 
/ 
/ 
the  status 
quo 

Guidance 
training 
clarification 

Critical choice: 
Correct and enhance existing procedures. 

Problems addressed: 
- Disproportionate and inflexible procedures;  
- Legal uncertainty; 

The  actions  proposed  under  this  option  are  intended  to  streamline 
many  of  the  existing  provisions,  reducing  administrative  burden, 
procurement  costs,  and  ensuring  more  efficient  outcomes.  By 
specifying  when  or  how  a  procedure  should  be  used,  concerns 
about the legal requirements and conditions should be addressed. 

Headline actions(s): 
- Improve tools for repetitive purchasing (DPS, framework 
agreements, e-Catalogues); 
- Increase use of electronic communication tools (e-procurement). 

Examples of other (possible) actions: 
- General shortening of time limits for tender procedures 
- Implementing legislation to ensure open/accessible e-procurement 
solutions; 
- More flexibility in selection and award (possibility for contracting 
authorities to examine selection before award; experience of staff 
taken into account in the award phase ) 
- Clarification of the notion of special or exclusive rights 

PRO.LEGI.FLEXIB 
Critical choice: 
Expand  menu  of  procedural  options  available 
purchasers  and  alleviate  procedures  where 
disproportionate costs. 
Problems addressed: 
- Disproportionate and inflexible procedures for certain types of 
actor; 
- Legal uncertainty;  

to  public 
in 

they  result 

The  actions  proposed  under  this  option  should  address  the 
inability  experienced  by  some  CAEs  to  tailor  procedure  to 
characteristics  of  market  or  purchase,  which  can  lead  to 
inefficient  outcomes.  The  actions  should  where  possible 
streamline  the  process,  reducing  administrative  burden  and 
procurement costs and clarify exactly when or how a procedure 
can be used. 
Headline actions(s): 
- Greater freedom for CAEs to use negotiated procedure; 
-  New  lighter  publication  regime  for  sub  central  authorities 
(possibility  to  use  the  prior  information  notice  as  a  means  of 
calling for competition). 
Examples of other (possible) actions: 
- Allow MS to eliminate the lowest price only criterion; 
- Mandatory full use of electronic communication to be phased in 
by set deadline; 
- Mandatory transmission of notices in electronic form;  
- Mandatory electronic availability of tender documents; 
- Impose fully electronic communication on CPBs. 

EN 

39 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
Table 4): Strategic procurement 

STR.NC 
Maintain 
the  status 
quo 

STR.SOFT 
Guidance 
training 
clarification 

/ 
/ 

STR.LEGI.FACILIT 
Critical choice: 
Enable  CAEs  to  frame  procurement  needs  in  ways  that  integrate 
other policy goals. 

Problems addressed: 
-  Legal  restrictions  or  ambiguity  which  prevent  CAEs  from 
explicitly  introducing  performance  on  range  of  other  policy  into 
selection, award process or contract.  
This  approach  would  permit  CAEs  to  reorient  spending  towards 
solutions. Whilst the EU would clarify and improve the possibility 
to conduct strategic procurement, it would stop short of imposing 
such  policy  goals  on  MS  and  CAEs.  It  should  remove  legal 
uncertainty and risk which prevents some CAEs from integrating 
their policy choices into their public procurement strategy. 
Headline actions(s): 
- Allow consideration of entire life-cycle costs in award criteria 
- Allow inclusion of factors directly linked to production 
processes in award criteria and technical specifications  
- Introduce the "Innovation partnership": a new, special procedure 
for purchases not yet available on the market 
Other (possible) actions: 
- Possibility for contracting authorities to explicitly require certain 
labels (certification schemes), but safeguard that equivalent labels 
must also be accepted;  
- Violation of obligations from EU environmental or social law or 
from certain international labour law provisions = ground for 
exclusion of bidders;  
-  Tenders  which  are  abnormally  low  because  of  non-compliance 
with obligations from EU environmental or social law, including 
throughout the supply chain, must be rejected. 

STR.LEGI.ENFORC 
Critical choice: 
Remove discretion from  CAEs: they must award (all or part) 
contracts  on  the  basis  of  performance  in  respect  of  other 
policy goals. 
Problems addressed: 
-  Legal  restrictions  or  ambiguity  which  prevent  CAEs  from 
explicitly  introducing  performance  on  range  of  other  policy 
into selection, award process or contract.  
This  approach  would  ensure  that  public  purchasing  is 
redirected  towards  solutions  /  technologies  that  are  more 
beneficial/less  harmful  for  society  as  a  whole.  It  should 
remove legal uncertainty and risk which prevents some CAEs 
from 
their  public 
their  policy  choices 
procurement strategy 
Headline actions(s): 
- Introduce obligations on "what to buy" (quotas); 
- Require CAEs to use certain defined award criteria and / or 
technical specifications  

integrating 

into 

Other (possible) actions: 
- Allow CAEs to source only from local or regional suppliers 
to limit emissions, support local culinary traditions; 
- Mandatory use of life-cycle costing when determining the 
economically most advantageous offer or lowest cost 
- Allow CAEs to take considerations having no link to 
production/performance to be taken into account (e.g. gender 
balance on company board); 
- Incentives/measures to further promote and stimulate 
innovation through public procurement (obligatory use of 
performance related technical specifications and/or variants). 

EN 

40 

EN 

 
  
 
 
 
 
 
 
 
Table 5): Access 

ACC.NC  ACC.SOFT  ACC.LEGI.FACILT 
Maintain 
/ 
/ 
the  status 
quo 

Guidance 
training 
clarification 

In  particular, 
possible 
training 
campaign  on 
doing 
business 
abroad 

Critical choice: 
Remove  administrative  barriers  to  SME  participation  &  cross-border 
access.  Adopt  non-coercive  measures  to  increase  SME  participation  & 
cross-border  access  at  reduced  costs,  whilst  maintaining  high  levels  of 
transparency. 
Problems addressed: 
-  Regulatory  and  administrative  market  access  barriers  leading  to 
asymmetric market access;  
-  Insufficient  participation  of  SMEs  in  public  procurement  markets  and 
low cross-border participation/access. 
Under  this  option,  many  of  the  burdensome  and  sometimes  difficult  to 
fulfil  (especially  in  the  cross-border  context)  requirements  placed  on 
business would be reduced by EU level action limiting and standardising 
the  information  requested  and  only  asking  for  original  proof  to  be 
provided  by  the  winning  bidder.  This  should  have  particular  benefits  for 
SMEs and firms interested in bidding across borders. 
Headline actions(s): 
-  Mandatory  acceptance  of  self-declarations  as  prima-facie  evidence  for 
selection;  
- Introduction of a European Procurement passport: a standard document, 
validated  at  MS  level,  which  confirms  that  a  bidder  is  compliant  with 
certain, frequently requested criteria. 
Other (possible) actions: 
- List of possible requirements for selection of candidates made exhaustive 
- Turnover cap: CAEs may not require that economic operators have a 
turnover greater than e.g. 3 times the contract value in order to participate 
in the procedure 
- Increased use of lots under certain circumstances  
-  Obligation  for  MS  to  feed  e-Certis  (an  electronic  repository  of 
certificates required for selection criteria)  

and 

low 

in  public 
cross-border 

Insufficient  participation  of  SMEs 

ACC.LEGI.ENFORC 
Critical choice: 
Introduce  prescriptive  measures  to  reserve  parts  of 
public  procurement  markets  for  SMEs  or  require 
structuring  of  purchases  in  way  that  favour  SME 
participation. 
Problems addressed: 
- 
procurement  markets 
participation/access. 
Under  this  option  actions  would  be  proposed  to  use 
public  spending  to  support  diversity  of  the  economic 
base  and  support  start-ups  and  SME  innovators.  The 
actions  foreseen  here  would  force  Member  States  and 
CAEs to take action to ensure that public procurement 
markets are made accessible to SMEs and non-national 
firms.  
Headline actions(s): 
- Impose mandatory use of lots for all above threshold 
contracts 
- 
contracts/budget awarded to SMEs 

share  of  procurement 

Introduce  quotas 

for 

Other (possible) actions: 
- Obligation to subcontract a certain share of the main 
contract to third parties;  
- Obligation to draw up tender specifications for high-
value contracts in a second language;  
-  Instruments  to  prevent  the  development  of  dominant 
suppliers (e.g. obligation to cancel the procedure if only 
one or two valid bids received) 

EN 

41 

EN 

 
  
 
 
 
 
 
 
 
Table 6): Governance 

GOV.NC  GOV.SOFT  GOV.LEGI.TARGET 
Maintain 
/ 
/ 
the  status 
quo 

Guidance 
training 
clarification 

Critical choice: 
Leverage achievement of economies of scale and optimal outcomes 
for CAE through the use of specialised, professional bodies which 
aggregate purchasing where appropriate. 
Problems addressed: 
- Different capabilities of CAEs; (possible limited improvement to 
the  different  models  leading  to  different  public  procurement 
capacities developed across MS). 

to 

lead 

further 

improvements 

the 
This  option  should 
professionalisation of bodies which can either perform procurement 
on  behalf  of  a  CAE  or  offer  advice.  This  should  improve  the 
consistency  of  application  across  the  EU  and  reduce  non-
compliance  with  the  EU  rules.  In  particular,  it  should  benefit 
smaller  CAEs  who  may  have  little/no  experience  of  conducting 
large procurements and following EU rules.  

in 

GOV.LEGI.ENHANC 
Critical choice: 
Oblige  MS  to  identify  a  national  authority  in  charge  of 
implementation, control & monitoring of public procurement 
which reports annually on performance 
Problems addressed: 
-  Different  models  leading  to  different  public  procurement 
capacities developed across Member States;  
- Different capabilities of CAEs  

Under this option the EU would oblige MS to take action to 
monitor  and  control  the  application  of  EU  rules.  National 
oversight bodies would be responsible for controlling public 
procurement, checking for and re-acting to any problems in a 
timely and efficient manner. This should improve the overall 
application  of  EU  rules,  increase  consistency  and  ensure 
firms operate in a single market.  

In  particular, 
guidance  on 
better 
monitoring 
and  control; 
possible 
introduction 
of 
review 
and/or 
benchmarkin
g 
(perhaps 
through  MS 
committees) 

peer 

Headline actions(s): 
- Establish clear rules for purchases made through CPBs (inc. safe 
haven  concept;  small  contracting  authorities  could 
transfer 
responsibility for procurement to CPBs). 

Headline actions(s): 
-  Obligatory  designation  of  central  national  oversight  body 
by  Member  States,  with  clear  obligations  on  monitoring, 
enforcement and reporting. 

Other (possible) actions: 
- EU definition of conflict of interest in public procurement;  
-  Safeguards  to  prevent,  identify  and  resolve  conflict-of-interest 
situations; 
- Better assistance to CAEs and businesses ("knowledge centres").  

Other (possible) actions: 
-  Better  administrative  cooperation  between  MS,  using  IMI 
for information exchange; 
- Additional instruments to tackle organised crime in public 
procurement; 
- Annual report of oversight body shall include reporting on 
SME success in public tenders. 

EN 

42 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
4.3. 

Summary of options to be analysed further 

The  probable  consequences  of  the  five  "no  change"  options  have  already  been 
presented  in  section  2.4.  So,  the  next  section  will  look  at  the  advantages  and 
disadvantages  of  the  remaining  12  different  option  packages  in  global  terms,  using 
the headline actions identified to discuss the expected impacts and changes.  

This analysis may lead to the conclusion that it is not always an "either/or" choice in 
favour  of  one  of  the  options.  In  some  instances,  the  best  solution  could  combine 
different options within a particular problem group. For example, while concluding 
that the more ambitious approach is justified, it would also be possible to implement 
the  incremental  improvements  in  the  areas  covered  by  Scope,  Procedures  and 
Governance/administrative  capacity.  For  Strategic  procurement  and  Access,  the 
legislative options are essentially alternatives and address the same problems. Under 
these  headings,  one  option  relates  to  the  adoption  of  a  permissive  approach  (which 
enables  contracting  authorities  to  pursue  certain  purchasing  preferences)  whilst  the 
other one is coercive (the revised directives would impose an obligation on CAEs to 
favour a particular procurement outcome).  

Table 7): Summary table of retained options for the analysis of impacts (retained – marked in grey) 

Options 
Problem groups 

No change 
options 
(NC) 

Soft law 
options 
(SOFT) 

Legislative – generally 
within current framework 
(LEGI._) 

Legislative – new or 
significant change 
(LEGI._) 

Scope (SCO) 

SCO. NC 

Procedures (PRO) 

PRO. NC 

Strategic (STR) 

STR. NC 

Access (ACC) 

ACC. NC 

Governance 
(GOV) 

GOV. NC 

ACC. 
SOFT 
GOV. 
SOFT 

5. 

ANALYSIS OF IMPACTS 

SCO.LEGI.TARGET 
(targeted adjustments & 
clarification of boundaries) 
PRO.LEGI.DESIGN 
(improve design) 
STR.LEGI.FACILIT 
(facilitate strategic public 
procurement) 
ACC.LEGI.FACILIT 
(facilitate access) 
GOV.LEGI.TARGET 
(optimise the use of 
resources). 

SCO.LEGI.REDUCE 
(significant reduction of 
scope) 
PRO.LEGI.FLEXIB 
(increase choice) 
STR.LEGI.ENFORC 
(enforce strategic public 
procurement) 
ACC.LEGI.ENFORC 
(enforce tools for access) 
GOV.LEGI.ENHANC 
(enhance control & 
responsibility) 

transparency).  In  many 

In  general,  the  most  visible  impacts  resulting  from  the  options  set  out  above  are 
economic  in  nature.  They  will  take  the  form  of  changes  in  supplier  and  purchaser 
operating conditions and behaviours with consequent impacts on market conditions 
immediate  social  and 
(competition, 
environmental  impacts  are  limited.  The  exception  is  for  the  options  addressing  the 
problems  relating  to  a  more  strategic  use  of  public  procurement  policy  and  which 
are,  by  their  very  nature,  intended  to  affect  (in  a  positive  way)  the  social  and 
environmental  impacts.  None  of  the  policy  options  analysed  are  expected  to  have 
impacts affecting fundamental rights. 

instances, 

the 

The  global  impacts  of  each  option  are  analysed  below,  grouped  by  the  five 
previously  defined  problem  blocks.  For  each  option,  the  effects  on  four  main 

EN 

43 

   EN 

 
 
 
 
categories of stakeholder have been identified – CAEs, businesses (including SMEs), 
MS and the Internal Market.  

As  explained,  in  section  4,  the  impacts  of  every  possible  legislative  adjustment  are 
not analysed here for presentational and feasibility reasons44. The approach adopted 
(and discussed in the Steering Group) is to concentrate on a high-level analysis of the 
critical policy choices that will determine the thrust and content of the future policy 
initiative. Each of the options as framed in chapter 4) is discussed as a whole. Further 
detail is provided through analysis of the impacts of the individual headline actions.  

For these options in particular, the time period within which any changes would be 
adopted  is  very  important.  In  general,  the  shorter  the  time  allowed,  the  more 
unfavourable the trade-off between costs and benefits45.  

Finally,  some  of  the  measures  proposed  under  various  options  discussed  in  this 
Impact  Assessment  might  influence  the  administrative  costs  and  burden46.  The 
expected effects of such measures are summarised for each of the options discussed. 

5.1. 

Scope  

5.1.1. 

Impacts of SCO.NC option 

The expected consequences of the "no change" scenario are presented in section 2.4. 

5.1.1. 

Impacts of SCO.LEGI.TARGET option 

Critical choice: 

Targeted adjustments to current scope of public procurement legislation. 

Headline action(s): 

- Higher threshold for social services, with a special regime for social services above 
this threshold; 

- Inclusion of all former B-services (except for social services) in the regular regime. 

5.1.1.1.  Impacts for CAEs 

Clearer  definition  of  the  Directives'  boundaries  should  make  it  easier  for  CAEs  to 
identify  which  rules  apply  when  they  want  to  buy  something.  This  should  in  turn 
reduce  the  perceived  risks  and  incidence  of  litigation.  Reducing  the  costs  of  legal 
assistance associated with avoiding (perceived) legal uncertainty, managing risk and 
dealing  with  legal  challenges  should  generate  budgetary  savings.  Around  350,000 

44 
45 

46 

Where data permits, more detailed analysis of some actions is provided in section 8.7. 
In the very short-term transitional or switchover costs need to be absorbed by purchasers and suppliers; 
the benefits of the policy change may take longer to materialise (e.g. positive externalities following a 
shift  of  production  technologies  to  more  sustainable/innovative  solutions  in  response  to  policy  driven 
changes in public procurement). 
Recent research estimates administrative burden associated with the implementation of the Directives at 
€216 million, see: 8.8.56. 

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44 

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person days are spent annually across Europe on managing complaints and litigation 
for government authorities47, with an estimated associated cost of up to €54 million 
per  year48.  To  this  must  be  added  the  costs  of  risk-avoidance  behaviour  which  are 
more difficult to measure. 

Clarification  (through  targeted  legislative  intervention)  of  the  applicability  of  EU 
rules could bring valuable support to the development of public-public cooperation in 
procurement.  These  types  of  collaborative  purchasing  between  groups  of  public 
purchasers (often for purposes of achieving scale or administrative efficiency) seem 
set to increase as local authorities look for ways to optimise the use of scarce public 
resources. Improved clarity could also help to reduce the unnecessary application of 
EU  procurement  disciplines.  Many  below  threshold  contracts  are  published  in 
OJ/TED, sometimes because of a lack of knowledge and misunderstanding of what is 
and is not covered by the EU rules and a desire to minimise exposure to legal risk. 
These problems may be particularly acute for small CAEs, who may not apply such 
rules very often and as a result may not achieve optimal outcomes when they do. In 
2010,  14,000  local  contracting  authorities  published  notices  in  OJ/TED;  of  these, 
over half (8,000) published only one notice in that year. It is these inexperienced and 
often under-resourced purchasers who are most likely to suffer from lack of clarity 
surrounding the scope of Directives. 

Under  this  option,  the  current  separation  of  services  into  two  categories  –  A-type, 
which  are  assumed  to  be  more  tradable  across  borders  and  to  which  the  full  rules 
apply; and B-type which are less tradable across borders and as a result, covered by a 
lighter regime - would be altered. Analysis of the classification of services according 
to these two categories points to many errors which result in the wrong regime being 
applied.  The  catch-all  category  of  'other  services'  is  unclear  and  consequently 
improperly used by CAEs resulting in non-compliance with the rules in over 30% of 
cases  (see  8.3.1.3  for  more  detail).  Revising  these  lists  would  therefore  remove 
unnecessary  costs  and  risks  currently  faced  by  CAEs  i.e.  if  they  follow  the  full 
regime when it is not appropriate or the light regime when they should be compliant 
with  the  full  set  of  rules.  Equally,  recent  research  shows  that  several  of  the  B  type 
services exhibit higher rates of cross-border tradability than originally expected (e.g. 
legal  services49)  and  hence  it  would  be  more  appropriate  and  consistent  to  submit 
them to the same rules as A-type services.  

47 
48 
49 

PwC study, page 80. 
See: section 8.8.3. 
Ramboll study, page 64. 

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45 

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Table 8): Economic importance of potential intervention targets 

Intervention target 

Number  of  CANs 
removed 
(%  of 
CANs ) 

Value 
removed 
total value) 

of  CANs 
of 
(% 

All service contracts 

68,000 (49%) 

€160 billion (38%) 

B-type 
contracts 

service 

20,000 (14%) 

€40  billion  (10%)  of 
which  approx.  €18 
billion  covered  by 
social services 

Source: DG MARKT estimates based on OJ/TED data 

Several  "services  to  the  person"  or  "social  services"  (hereafter:  social  services)  are 
characterised  by  very  low  tradability50  and  a  general  absence  of  cross-border 
interest51. For these services, it would therefore be appropriate to maintain a lighter 
regime.  However  in  the  interests  of  transparency  and  to  ensure  that  potentially 
interested  bidders  are  at  least  aware  of  possible  opportunities,  greater  publication 
requirements  could  be  introduced  than  currently  exist.  Whilst  this  might  increase 
slightly their related workload, such change should be offset by the increased legal 
certainty it provides in terms of the general transparency obligations that a CAE must 
meet under the Treaty.  

5.1.1.2.  Impacts for businesses (including SMEs) 

Excessive regulatory requirements and complicated rules can be an important barrier 
in  accessing  public  procurement  markets.  Around  60%  of  firms  consider  that 
participation in EU-regulated procurement procedures is more, or much more, time-
consuming and costly than supplying the private sector. This is particularly valid for 
SMEs. Whilst most of the changes relating to this option would affect CAEs, a better 
definition of scope should help firms to identify confidently valid opportunities and 
organise themselves accordingly. It should also increase the consistency with which 
such rules are applied and ensure markets of interest are open to firms across the EU. 

Currently,  problems  arise  from  the  unclear  and  sometimes  arbitrary  allocation  of 
services between the A and B lists. Related issues arise from the "fuzziness" of the 
border-line  between  works  and  services  or  mixed  services/works  contracts.  Greater 
clarity and confidence around these issues, coupled with increased transparency may 
help suppliers to maximise their bidding and could even lead to greater competition 
in some areas, including social services, where increased transparency requirements 
could  make  it  easier  for  firms  to  identify  opportunities  (both  national  and  cross-
border). 

5.1.1.3.  Impacts on Member States 

Greater legal certainty about the rules applicable to public-public cooperation, or to 
certain  common  classes  of  "body  governed  by  public  law"  would  allow  national 

50 
51 

See: section 8.7.1. 
For example, in 2009 only 0.1% of social services contracts were awarded cross-border. 

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46 

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authorities to implement EU legislation more effectively, and work with CAEs to this 
end. The targeted adjustments to services and the creation of a new regime for social 
services  should  simplify  the  identification  of  the  rules  applying  to  a  key  area  of 
government expenditure.  

5.1.1.4.  Impacts on the Internal Market 

Overall, we could expect that increasing the clarity of the Directives would improve 
the  functioning  of  the  Internal  Market,  as  clarity  improves  efficiency  and  reduces 
regulatory burden. It would also reduce the likelihood that risk-averse CAEs would 
follow more burdensome rules than needed.  

A review of the categorisation of services as tradable or non-tradable could help to 
re-align  the  scope  of  the  Directives  to  economic/commercial  reality.  It  would  also 
reduce the number of anomalies due to misclassification. The new, higher threshold 
for  social  services  should  ensure  that  such  contracts  remain  open  and  transparent, 
where there  is a  probable cross-border interest52. Increasing the number of services 
under category A would increase the markets open to third countries under the GPA; 
reciprocal changes from other partners would then have to be discussed.  

5.1.1.5.  Summary of stakeholder views on this option 

A slight majority of stakeholders responding to the GP support the idea of reviewing 
the  distinction  between  A  and  B  services  although  almost  2/3  reject  the  idea  of 
applying the same regime to all services. The most frequently repeated arguments in 
favour of reviewing the two lists refer to the fact that some of the B-services might 
not  merit  differentiated/lighter  treatment  (for  example  restaurants,  legal  services). 
Stakeholders argue that the market in a number of services classified as category B is 
now  developed  and  these  should  now  be  moved  to  category  A  (whilst  new  or 
emerging services could be classified as B, until the markets mature).  

In  relation  to  social  services,  there  is  again  some  disparity  between  the  different 
stakeholder  groups.  Civil  society  organisations  and  a  slight  majority  of  contracting 
authorities  call  for  a  special  procurement  regime  to  better  take  into  account  the 
specificities of social services. Many of them consider that the procurement of these 
services should be less regulated at EU level. 

Businesses  are  generally  not  in  favour  of  a  special  regime  for  social  services,  and 
clearly oppose further reducing the density of EU regulation for the procurement of 
these services, as does the clear majority of MS. Many civil society organisations and 
providers of social services are also in favour of prohibiting or limiting the use of the 
lowest  price  criterion  for  the  procurement  of  social  services.  Other  stakeholders 
groups are sceptical about this idea. 

5.1.1.6.  Impacts on administrative burden and simplification 

No  change  in  terms  of  information  obligations  would  be  expected  under  option 
SCO.LEGI.TARGET  (i.e.  the  administrative  burden  for  businesses  should  neither 

52 

The level of such threshold could be established for example by analysing the value of contracts that in 
the past were awarded cross-border, for example by taking their median value  

EN 

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increase  nor  decrease).  However,  this  option  seeks  to  clarify  and  simplify  public 
procurement  rules  and  therefore  it  is  expected  to  optimise  the  way  procedures  are 
carried out. For example, improved clarity and reduced legal uncertainty should also 
lower  "business  as  usual"  costs.  Equally,  CAEs  should  find  it  easier  to  identify 
whether a particular contract warrants application of the EU rules, with less checking 
or need for specialised legal advice, hence reducing their administrative costs. 

5.1.2. 

Impacts of SCO.LEGI.REDUCE option 

Critical choice: 

Far-reaching  changes  to  scope  of  the  current  rules  involving  exclusion  of  entire 
groups of purchasers or transactions. 

Headline action(s): 

- Raise the thresholds. 

5.1.2.1.  Impacts for CAEs 

In countries where approximately the same rules apply for procurement following the 
EU  or  national  rules,  no  change  (to  any  aspect)  would  be  expected  as  a  result  of 
excluding  certain  contracts  from  the  scope  of  the  EU  rules.  However  in  MS  where 
these national rules are "lighter" and less burdensome for CAEs, exclusion would be 
expected to reduce complexity and allow more proportionate procedures, making the 
process  easier  for  CAEs.  In  these  countries  there  should  be  a  net  reduction  in  the 
operational cost, as CAEs could be more flexible, choosing the process which suits 
them best. Based on the findings of a recent survey53 they should also take less time 
to procure. However, regulatory costs for these procedures would not fall to zero. On 
the  contrary,  a  number  of  MS  are  progressively  strengthening  transparency  and 
procedural requirements for below-threshold procurement. 

The impact on the price paid by CAEs is likely to be negative: transparency at both 
EU  and  national  level  would  drop  as  a  result  of  the  different  country-defined 
publication methods which would apply. Given the clear finding from the evaluation, 
that transparency triggers competition which in turn yields savings, this reduction in 
transparency  would  lead  to  higher  prices  being  paid  by  CAEs.  However  in  the 
medium  to  longer  term,  this  option  is,  on  balance,  expected  to  deliver  efficiency 
benefits  for  the  CAEs  concerned.  The  efficiency  case  is  stronger  if  any  envisaged 
exclusions  are  targeted  at  smaller  CAEs  or  small  value  procurement  procedures 
where  running  full  procedures  is  found  to  be  demanding  and  can  generate 
disproportionate costs.  

The exact impact on CAEs of increasing the EU thresholds would be determined by 
the  degree  of  increase  introduced.  Other  than  to  reflect  currency  fluctuations,  the 
current  thresholds  have  not  been  adjusted  for  some  20  years  despite  inflation. 
Doubling  the  existing  thresholds  would  remove  around  20,000  contracts  from  the 
current scope. The exact impact on individual CAEs would vary – some would not 

53 

See: section 8.7.1. and 8.7.2. 

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48 

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be affected either because their contracts remained in scope or because their national 
rules  were  not  so  different  to  the  EU  ones.  Smaller  CAEs,  which  in  general  let 
smaller value contracts, would benefit most from such a move. 

5.1.2.2.  Impacts for businesses (including SMEs) 

As a number of contracts would no longer be advertised EU-wide in a single source 
(OJ/TED),  firms  would  need  to  check  other  sources  to  identify  business 
opportunities.  This  would  take  more  time  and  make  participating  in  public 
procurement more costly. Firms operating across borders would clearly be affected, 
but  there  could  also  be  national  level  consequences,  depending  on  how  centralised 
publication  is  within  a  given  country.  For  some  (often  incumbent)  firms,  reduced 
transparency  could  have  a  positive  impact,  lowering  the  level  of  competition  they 
might  face,  and  possibly  allowing  them  to  raise  prices.  Overall  there  would  be  an 
expectation  that  for  the  excluded  markets  the  rates  of  cross-border  bidding  would 
probably drop. Nowadays, even if foreign firms do not win a contract, the fact that 
they can enter domestic markets at any time, influences the behaviours of domestic 
firms (contestability of markets) and again, without this pressure, prices could rise.  

If the exclusions broke international agreements, firms active on those markets could 
also lose out on international trade, as partner countries would exclude some of their 
target contracts from international competition.  

The consequences for SMEs could be relatively greater as they do not have the same 
resources to address the additional costs of finding opportunities or adapting to new 
rules.  In  particular,  higher  thresholds  would  increase  the  market  entry  barriers  for 
SMEs since contract value is a key factor in determining SMEs' chances of winning a 
public procurement contract54.  

SMEs win a relatively high share of contracts close to or just above EU thresholds. 
Doubling the thresholds would remove around 20,000 contracts from the scope of the 
current rules and could have a significant and negative impact on SMEs competing in 
these markets. Reducing the visibility of these opportunities and not applying the EU 
rules could reduce transparency and reduce guarantees of fairness and objectivity in 
award of these contracts. This could be to the detriment of successful SMEs. 

5.1.2.3.  Impacts on Member States 

At  MS  level,  excluding  certain  contracts  should  reduce  the  administrative  and 
regulatory  overheads  linked  to  public  procurement.  Firstly  national  rules  are 
expected to be cheaper than EU rules. A study for the evaluation found that overall 
CAEs and firms consider that the above threshold procedures are more or much more 
costly than below thresholds55. However, the additional cost due to the Directives is 
limited  –  it  accounts  for  perhaps  one  third  of  the  €5.6  billion  estimated  cost  of  the 
procurement regulatory apparatus or around € 1.7 billion (divided between MS as a 
function  of  the  size  of  their  procurement  governed  by  the  Directives).  The 

54 

55 

The results of a recent econometric analysis show that as the contract value rises, the probability that an 
SME wins the contract falls"[…] increasing the contract value by 172% decreases the chance of SMEs 
winning by 8%", source: GHK study, page 39. 
See: section 8.7.1 and 8.7.2.  

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49 

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regulatory/administrative  savings  are  likely  to  be  offset  by  higher  prices  due  to  the 
lower  transparency,  which  may  reduce  the  average  number  of  bids  submitted.  This 
reduced  competition  is  also  expected  to  reduce  the  total  savings  to  the  economy. 
There  could  also  be  some  negative  impacts  on  the  integrity  of  procedures,  as  the 
below threshold systems may have weaker procedural safeguards against fraud.  

A  significant  additional  complication  for  MS  would  result  from  the  market  access 
compensations  due  to  violating  any  international  obligations.  For  MS  with  firms 
which  win  contracts  in  these  partner  countries,  the  implications  could  be  quite 
considerable. Losing contracts could lead to reduced profits and might cause firms to 
lay-off  staff,  with  a  subsequent  cost  to  society  of  supporting  them.  The  current 
thresholds  in  place  at  EU  level  are  derived  from  the  GPA  (the  values  are  set  in 
Special  Drawing  Rights  or  SDR)  and  any  changes,  other  than  those  specifically 
agreed  to  reflect  currency  fluctuations  over  a  given  period,  would  lead  to  re-
negotiation and possible sanctions.  

5.1.2.4.  Impacts on the Internal Market 

Any  exclusion  reduces  the  size  of  the  Internal  Market  covered  by  the  EU  rules. 
Within  the  wider  public  procurement  market,  cross-border  procurement  would  be 
likely to reduce and many markets would remain (or even become more) national.  

Table 9): Impacts of exclusions (number and volume of CANs is based on 2009 data) 

Exclusion 

Number  of  CANs 
removed 
(%  of 
CANs ) 

Value 
removed 
total value) 

of  CANs 
of 
(% 

Internat. 
conse 
quences 

Comments 

Double thresholds 

around 20,00056 

Around €20  billion57 
(5%) 

Yes 

Could  be  less  –  depends 
on CAEs reaction58 

Exclude 
authorities 

sub-central 

45,000 (33%) 

€116 billion (28% ) 

Yes 

Could  be  more  –  "other" 
or  "bodies  governed  by 
public law" not counted 

Exclude all services 

68,000 (49%) 

€160 billion (38%) 

Yes 

Exclude B services 

20,000 (14%) 

€40 billion (10%) 

No 

Source: DG MARKT estimates based on OJ/TED data (except "double thresholds" – see: footnotes 56 and 57) 

Transparency  and  competition,  two  cornerstones  of  EU  public  procurement  policy, 
would  be  reduced,  leading  to  lower  savings  which  might  not  be  off-set  by  lower 
costs. From the table above it can be seen that a doubling of the current thresholds 
would reduce the number of CANs advertised at EU level by around 14%. This level 
of  reduced  transparency  could  have  significant  effects  on  competition  and 
procurement outcomes in the markets affected.  

56 
57 
58 

Estimates based on PwC study, page 71. 
Estimates based on PwC study, page 71. 
Due to voluntary publication patterns, see: section 8.3.2.1. 

EN 

50 

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to 

Exclusions  relating 
thresholds,  particular  sectors  or  actors  would  have 
international  impacts  and  force  the  renegotiation  of  the  GPA  and  other  individual 
agreements. GPA partners would be likely to demand compensation and retaliate by 
withholding a similar percentage of their own market and could decide for strategic 
reasons  to  restrict  EU  access  in  areas  were  the  latter  is  competitive  (and  where  a 
GPA  partner  industry  is  actually  less  competitive).  Re-negotiation  would  be  time-
consuming and costly, creating uncertainty and increasing the potential for litigation 
during the negotiation period. 

5.1.2.5.  Summary of stakeholder views on this option 

A  majority  of  CAEs  responding  to  the  GP  supports  an  increase  in  the  thresholds, 
whilst a slight majority of Member States would be opposed to such a change. Many 
CAEs  argue  that  contracts  with  a  value  close  to  the  existing  thresholds  generally 
attract  little  interest  from  firms  based  in  a  different  Member  State  but  that  they 
nonetheless  generate  an  additional  administrative  burden.  Business  representatives 
reject  such  an  increase,  pointing  out  that  higher  thresholds  would  lead  to  lower 
transparency and less cross-border business opportunities.  

5.1.2.6.  Impacts on administrative burden and simplification 

If certain transactions are excluded from the scope of the Directives, the information 
obligations,  which  currently  fall  on  CAEs,  firms  and  MS  would  be  reduced  in 
proportion to any exclusion adopted.  

However,  the  excluded  transactions  would  then  be  covered  by  national  rules  on 
public  procurement  which  are  also  likely  to  be  subject  to  some  administrative 
requirements.  Therefore  it  is  unlikely  that  all  information  obligations  would  be 
removed, it is more likely that they would be replaced by national rules (that might 
be equally burdensome). Hence the overall impact of option SCO.LEGI.REDUCE in 
terms of the administrative burden is expected to be positive to neutral – depending 
on the national rules in force in each MS. 

5.1.3. 

Summary of impacts of options in Scope against specific objectives 

Substantial  revision  of  the  scope  of  the  Directives  is  sometimes  advocated  as  a 
straightforward  and  effective  way  to  address  the  issues  of  complex  rules  and 
disproportionate procedures. At a stroke, it is argued, it would remove certain actors 
or  transactions  from  the  EU  regime.  This  reasoning  assumes  that  exempted 
procedures  would  be  subject  to  less  costly  national  requirements  (or  none  at  all). 
While  national  procurement  is  generally  subject  to  less  prescriptive  requirements, 
there  will  continue  to  be  a  substantial  regulatory  cost  for  any  exempted  regulation 
resulting from national provisions, and the inherent and unavoidable costs of sound 
management  of  public  procurement.  More  importantly,  the  exclusion  of  certain 
transactions or purchasers from the scope of the Directives will also entail costs – in 
terms of reduced transparency and weaker competition. Extensive re-scoping of the 
Directives  may  be  an  effective  but  very  blunt  instrument  whilst  clarifying  the 
boundaries  and  improving  definitions  would  remove  the  grey  areas.  However, 
neither  option  provides  a  direct  response  to  the  underlying  policy  problem  of 
excessively onerous or disproportionate requirements for some types of procurement. 

EN 

51 

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Table 10): Summary of impacts of all options in Scope  

Specific objectives 

Improve cost efficiency 

Option 

SCO.NC 

SCO.LEGI.TARGET 

Realise opportunities to 
achieve best outcomes for 
society 

Create EU wide rather than 
national markets 

0 

(+) 

0 

(+ / ≈) 

0 

(+) 

Elimination of grey zones 
and better targeting of rules 
improves outcomes for 
transactions concerned 

Scope remains largely 
constant: greater 
transparency on former B 
type service contracts and 
rules on social services 
better suited to their 
specificities 

Improves the consistency 
of how the market is 
defined across all EU 
countries 

SCO.LEGI.REDUCE 

(++) 

(-) 

(--) 

Based on assumption 
national measures are 
“lighter” and easier to 
apply; if necessary, might 
need to offset international 
consequences 

Smaller scope reduces 
leverage of EU legislation 
in implementing strategic 
procurement 

More/less significant 
exclusions from scope of 
EU legislation: increased 
scope for nationally driven 
policy/market 
fragmentation 

5.2. 

Procedures 

5.2.1. 

Impacts of PRO.NC option 

The expected consequences of the "no change" scenario are presented in section 2.4. 

5.2.2. 

Impacts of PRO.LEGI.DESIGN option 

Critical choice: 

Correct and enhance existing procedures. 

Headline action(s): 

-  Improve  tools  for  repetitive  purchasing  (DPS,  framework  agreements,  e-
Catalogues); 

- Increase use of electronic communication tools (e-procurement). 

5.2.2.1.  Impacts on CAEs 

Improved  design  is  expected  to  facilitate  the  achievement  of  better  procurement 
outcomes  by  CAEs  and  lead  to  cost  efficiencies  during  the  procurement  process. 
Savings generated by better use of repetitive purchasing and more widespread use of 
e-Procurement tools should above all improve the proportionality of procedures and 
their cost efficiency.  

EN 

52 

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Under  this  option,  provisions  to  improve  design  by  more  frequent  use  of  repetitive 
purchasing  would  be  envisaged,  also  through  a  more  intense  use  of  e-Procurement 
tools (e.g. DPS, e-Catalogues). The latter can create savings and reduce operational 
costs for CAEs, who would be able to procure more quickly and efficiently59. This 
could  generate  significant  savings  for  CAEs  both  in  terms  of  lower  prices  paid  for 
contracts60  and  in  operational  costs.  Some  trials  have  reported  price  reductions  of 
20%  or  more  and  reduced  transaction  costs  (both  in  time  and  monetary  terms).  In 
addition, e-procurement can open up cross-border opportunities, reduce information 
barriers and streamline document exchange.  

Making  e-procurement  mandatory  at  EU  level  would  ensure  the  critical  mass  and 
force the pace of change. It would also remove any uncertainty on the part of CAEs 
as  to  whether  paper  procedures  still  have  to  be  permitted  and  remove  the  "risk 
averse" culture  of  conducting  double circuits (i.e. both paper  and electronic) which 
has evolved. However, there are risks to blanket imposition of e-procurement on all 
CAEs  for  all  procedures.  Although  the  technology  to  undertake  e-procurement  is 
now  widely  available  and  its  use  is  steadily  gaining  ground,  only  around  5%  of 
procurements  involve  e-tendering/e-submission.  Full  switchover,  will  involve 
investment in the capacity to organise procedures electronically, and training CAEs 
to  use  these  possibilities61.  Therefore,  a  phased  or  targeted  imposition  of  e-
procurement  would  currently  appear  most appropriate  at CAE  level, allowing them 
greater choice to make the transition at a time which is appropriate to them.  

For professional bodies such as CPBs, who are already strong users of e-procurement 
and repetitive purchasing techniques, there may be reasons to move more quickly to 
a mandatory use of electronic communication – allowing them to make better use of 
repetitive  or  aggregation  techniques  whilst  also  involving  more  suppliers  thereby 
keeping the competition higher. The DPS is a fully electronic procedure (albeit one 
requiring some  adjustment);  framework agreements  may  be  organised on paper but 
also electronically. In the latter case there would be little additional cost involved in 
running  a  framework  with  many  operators  as  the  bulk  of  the  administrative  work 
could be automated.  

5.2.2.2.  Impacts for businesses (including SMEs) 

Improving  the  design  of  the  current  system  and  making  procedures  more 
proportionate should also lead to benefits for businesses. Whilst there may be some 
initial  costs  in  adapting  to  such  change,  in  general  the  expected  savings  should 
outweigh  the  benefits.  Increased  use  of  e-procurement  has  the  potential  to  create 
savings  and  reduce  the  costs  of  procedures  for  all  types  of  suppliers.  50%  of 
companies  replying  to  the  e-procurement  GP  were  in  favour  of  its  mandatory  use. 

59 
60 

61 

Examples of such savings obtained by practitioners see: section 8.7.3. 
"E-procurement increases the number of potential bidders, forcing them to cut prices" source: Deutsche 
Bank Research paper, February 2011 (hereafter: Deutsche Bank Research).  
In  view  of  the  risks  and  potential  costs  linked  to  blanket  imposition  of  e-procurement,  the  legislative 
review  could  consider  making  e-procurement  mandatory  for:  certain  types  of  contracting  authority  or 
entity  (e.g.  CPBs),  for  certain  types  of  purchasing  method  (DPS,  catalogue  based  purchasing  of 
commonly bought goods and services), and certain phases of e-procurement e.g. the notification phase, 
or  the provision  of  access  to bid documents.  In  addition, regulatory  incentives  to  encourage  CAEs  to 
use e-procurement could be examined. 

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53 

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They consider that e-procurement would increase transparency and access to on-line 
tender  opportunities.  Action  to  reduce  technical  fragmentation  via  the  specification 
of clear standards and norms would reduce entry barriers for firms. However in the 
current situation where there are many systems with different technical requirements, 
many  businesses  face  high  learning  costs  in  relation  to  using  these  systems  which 
would need to be addressed, possibly through the development of EU level standards 
and/or  templates.  These  problems  are  not  just  limited  to  would-be  cross  border 
procurers; even within a single country, many different systems and interfaces may 
exist.  In  Germany,  the  X-Vergabe  project is  seeking  to  create  a  common  interface, 
irrespective of the actual system being used, thereby facilitating supplier access.  

The  risk  that  e-procurement  could  exclude  SMEs,  because  they  have  less  access  to 
this  technology,  is  not  borne  out  by  experience.  A  recent  study62  shows  that  many 
SMEs  are  already  "e-procurement  savvy"  and  taking  full  advantage  of  the 
opportunities it  provides. Some MS/countries (Portugal, Wales) that have made the 
transition  have  found  that  SMEs  can  increase  their  share  of  market  for  public 
contracts.  

Many businesses are interested in participating in repetitive purchasing arrangements 
and  competition  for  such  contracts  is  generally  high.  However  there  is  general 
recognition  that  such  practices  may  close  the  market,  particularly  to  SMEs  and  so 
there would be a need to build in safeguards and ensure that wider use of such tools 
was not abused.  

5.2.2.3.  Impacts on Member States 

Improving  the  cost  efficiency  of  public  procurement  procedures  by  redesigning 
procedures to make them more proportionate could bring significant net savings for 
Member  States.  As  mentioned  before,  "a  full  switch  to  e-procurement  may  save 
between € 50 to 75 billion on public procuremen t in the EU per year. On top of that 
are increases in transparency and public accountability which are arguably the most 
interesting categories but also the hardest to quantify"63. Increasing the uptake of e-
procurement  could  increase  the  visibility  of  how  money  is  spent  as  it  allows  clear 
monitoring  of  spend  and  easy  benchmarking.  This  could  also  enable  MS  to  track 
"socially  responsible"  and  "environmental  friendly"  spending  and  improve  their 
planning. 

Some  proportion  of  the  fixed  costs  linked  to  the  introduction  of  greater  e-
procurement  at  EU  level  would  be  incurred  by  MS  or  their  principal  procurement 
agencies. As a result, this option can have budgetary consequences, although, based 
on recent experience such investment costs (i.e. in terms of building e-procurement 
capacity)  are  important  but  manageable  and  can  generally  be  recouped  in  a  fairly 
short  period  of  time.  The  costs  to  CAEs  and  suppliers  of  adapting  to  the  new 
communication  processes  present  a  greater  and  more  diffuse  set  of  costs  for  the 
economy.  The  time-frames  involved  before  new  technology  is  bedded  down  and 
market  participants  have  become  familiar  with  it  can  be  relatively  long.  However, 

62 
63 

Source: GHK study, chapter 5. 
Source: Deutsche Bank Research. 

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this  reflects  costs  in  experimental  'first-movers';  time-frames  and  the  cost  benefit 
trade-off should be more favourable for MS which implement proven solutions. 

Greater use of repetitive purchasing techniques can generate economies of scale and 
also reduce transaction costs associated with  purchasing/supplying. Often repetitive 
methods  can  be  opened  to  several  CAEs  allowing  the  purchaser  to  maximise  the 
benefits and share them out over a wider circle of users. Where such contracts are let 
by CPBs, who have greater experience and knowledge, procurement should be done 
to higher standards, ensuring greater compliance with the EU rules and reducing the 
risks associated with poor capability and uncertainty. 

5.2.2.4.  Impacts on the Internal Market 

Better designed, efficient procedures should incentivise greater and more correct use 
of the EU rules by CAEs and attract more suppliers, ensuring high competition with 
the  associated  benefits.  Increased  use  of  e-procurement  should  reduce  information 
barriers  in  procurement  markets  and  provide  less  cumbersome  on-line  methods  for 
compliance  with  documentary  and  procedural  requirements.  On  both  counts,  e-
procurement can be expected to reduce the transactional impediments to cross-border 
tendering  –  particularly  if  cheap  solutions  to  e-signatures/e-identification  are 
introduced.  The  removal  of  these  barriers  would  not  in  itself  remove  underlying 
structural  or  economic  barriers  to  entering  new  markets  –  language,  logistic  and 
competitive  obstacles  to  market  entry  may  still  discourage  bidders.  However,  over 
time,  greater  use  of  e-procurement  could  be  expected  to  erode  these  natural  and 
economic barriers. 

Care should be paid to ensuring repetitive purchasing techniques which can also lead 
to greater aggregation do not close the market to competition nor take contracts out 
of the reach of SMEs. The DPS which is designed as a fully open procedure should 
combine  the  best  of  both  electronic  and  repetitive  purchasing,  ensuring  open, 
competitive  and  cost  efficient  procedures.  Additional  safeguards  on  the  use  of 
framework agreements should permit similar benefits to be achieved. 

5.2.2.5.  Summary of stakeholders views on this option 

In  the  e-Procurement  GP  consultation  65%  of  respondents  believe  that  EU 
procurement legislation should clarify the possibility for individual MS to impose the 
use of e-Procurement. Many believe that MS already have, implicitly, the possibility 
to impose e-Procurement but would welcome making this possibility explicit. Those 
who do not support such clarifications believe either that this is not necessary or they 
prefer  the  mandatory  imposition  of  e-Procurement  at  EU  level.  Alternatively,  they 
believe that CAEs should be the ones to decide to use e-Procurement. 

A vast majority (76%) of respondents to the e-Procurement GP also believe that the 
EU legislative framework should be modified  with  respect  to  the  way  it  handles  e-
Procurement issues. The remaining 24% believe that the EU legislative framework is 
adequate  and  sufficient  or  believe  that  new  legislation  should  be  undertaken  with 
caution. Changes are proposed in the following four main areas: 1) e-signatures, 2) 
DPS,  3)  e-Catalogues  and  4)  attestation/selection  criteria.  Virtually  all  respondents 
(80%) propose legislative changes in the area of e-signatures and DPS, with a view 
to simplifying their use. 

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5.2.2.6.  Impacts on administrative burden and simplification 

Option PRO.LEGI.DESIGN probably contains some of the most important measures 
in terms of reducing administrative burden. In particular, the various e-procurement 
solutions presented as part of this option should improve the ease with which CAEs 
and  firms  can  track  and  audit  data.  As  such,  it  should  be  possible  to  introduce 
automated  reporting  at  all  levels,  reducing  the  time  taken  to  produce  reports. 
Depending on the individual solutions adopted, the administrative burden placed on 
the  CAEs  or  firm  should  reduce  –  for  example,  more  ambitious  e-Catalogue 
solutions,  whilst  creating  a  certain  set-up  and  familiarisation  cost,  should  facilitate 
the  process  of  bidding  for  suppliers,  standardising  the  data  required  and  the  format 
for submission. Equally evaluating bids and providing information back to suppliers 
should be easier for CAEs due to a standardise recourse to electronic means. 

Finally, the reporting efficiencies possible via increased use of e-procurement could 
equally  improve  the  collection  of  other  data  which  might  be  required  under  other 
options  analysed  in  this  impact  assessment  (e.g.  strategic  targets,  SME  wins),  in 
some way mitigating or even negating any potential increases. 

5.2.3. 

Impacts of PRO.LEGI.FLEXIB option 

Critical choice: 

Expand  menu  of  procedural  options  available  to  public  purchasers  and  alleviate 
procedures where they result in disproportionate costs. 

Headline action(s): 

- Greater freedom for CAEs to use negotiated procedure; 

- New lighter publication regime for sub central authorities (based on use of annual 
or Periodic Information Notices).  

5.2.3.1.  Impacts on CAEs 

Simpler,  streamlined  and  more  flexible  procedures  would  provide  greater  legal 
clarity  and  improve  the  cost-efficiency  and  proportionality  of  procedures.  For 
example,  greater  freedom  to  use  negotiations  is  expected  to  directly  improve  the 
flexibility of CAEs to achieve better procurement outcomes.  

In the GP consultation, a majority of stakeholders called for greater freedom to use 
the negotiated procedure as they believed that this would allow them to get a better 
match  between  their  desired  procurement  outcome  and  solutions  offered  by  the 
market64.  CAE'  staff  would  have  to  acquire  higher  expertise  to  validly  conduct 
negotiations. Big CAEs could be expected to possess the necessary skills and buyer 
power  to  negotiate  “smartly”,  but  smaller  CAEs  may  lack  the  necessary  resources. 
This  option  could  also  generate  certain  positive  strategic  impacts  as  the  increased 
flexibility would facilitate the purchase of innovative (e.g. eco-innovative) goods and 
services.  

64 

Replies to question 19 of the GP.  

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56 

   EN 

 
                                                 
However,  there  would  be  a  need  for  more  clarity  and  stricter  rules  governing  the 
increased use of the negotiated procedure to guard against potential risks of misuse 
and  to  avoid  problems  with  inequality  of  treatment  and  discrimination65.  Increased 
negotiation  could  potentially  reduce  the  opportunity  for  cartels,  as  the  less 
predictable  behaviour  of  a  CAE  during  negotiation  prevents  collusion  between 
participants beforehand. 

In  terms  of  cost-effectiveness,  as  far  as  increasing  the  flexibility  of  procedures  is 
concerned, the example of the negotiated procedure shows that it is marginally more 
expensive  for  CAEs  than  the  open  procedure,  but  cheaper  than  the  restricted 
procedure66.  Additionally,  CAEs  may  pay  higher  prices  per  purchase  as  in  general 
the  negotiated  procedure  is  less  efficient  in  generating  savings  than  the  open  and 
restricted procedures67. This evidence would seem to contradict the views of CAEs, 
who  generally  claim  that  they  can  achieve  better  outcomes  through  increased 
negotiation. 

Another  example  –  giving  sub-central  authorities  the  possibility  to  use  a  lighter 
regime - should be the source of significant savings for CAEs in terms of the costs of 
procedures.  This  procedure  would  simplify  the  way  smaller  CAEs  announce  their 
willingness  to  award  a  contract  as,  for  instance,  the  award  of  contracts  would  be 
made without publishing an individual contract notice (provided that the contracting 
authority has announced its intention and published specific information in a periodic 
indicative notice). Increased choice and simplification through the introduction of a 
less-professional)  sub-central 
PIN-based  procedure  for  (usually  smaller  and 
contracting  authorities  would  nonetheless  maintain  some  common  elements  of 
transparency to sustain wide supplier involvement and competition.  

5.2.3.1.  Impacts for businesses (including SMEs) 

Many  firms  who  replied  to  the  GP  favoured  increasing  the  possibility  to  negotiate 
with  CAEs68.  However,  such  procedures  usually  take  much  longer  than  open 
contests69.  More  negotiation  would  permit  suppliers  to  present  their  offers  and 
address  more  efficiently  the  needs  of  CAEs.  Finally,  as  prices  in  the  negotiated 
procedure are estimated to be higher than in the open contest70 suppliers may be able 
to  secure  better  terms  for  their  delivery.  Generally,  wider  use  of  negotiation  would 
not  incur  any  major  costs  in  terms  of  learning  new  processes,  since,  by  and  large, 
suppliers  have  some  experience  with  these  concepts  from  supplying  the  private 
sector.  

65 

66 

67 

68 
69 

70 

In  particular,  there  would  need  to  be  strong  transparency  around  all  communications  with  the  actors 
involved at the different steps of the procedures. Based on the responses to questions 19-21 of the GP, a 
distinct majority of respondents favours the introduction of additional safeguards for transparency and 
non-discrimination in order to compensate for the higher level of discretion. 
€ 5,800 for CAE per transaction in the negotiated procedure compared to € 5,100 in the open procedure; 
see: section8.8.4. 
"Using the open procedure is associated with benefits of a 3 % lower award value when compared to 
cases where non-standard procedures were used", source: Europe Economics study, page 52. 
Replies to question 19 of the GP. 
As mentioned previously, awarding a contract under the negotiated procedure takes more than twice as 
long as under the open procedure; see: section 8.7.5.3. 
Source: Europe Economics study, page 52. 

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Depending  on  the  design  of  the  lighter  procedure,  suppliers  and  particularly  SMEs 
would  benefit  from  being  able  to  transact  more  easily  with  sub-central  CAEs, 
particularly  if  there  are  less  onerous  procedural  or  documentary  requirements. 
However,  this  procedure  could  reduce  procedural  guarantees  and  possibly  the 
redress/remedy  procedures  available  to  suppliers  in  the  event  of  problems.  The 
design of the transparency requirements would also need to be carefully conceived to 
avoid depriving suppliers of access to information of potential interest to them. 

5.2.3.2.  Impacts on Member States 

Almost all MS favour greater flexibility in public procurement and measures which 
make  it easier  to  meet individual country/CAE needs. They are generally in favour 
for example, of greater freedom to use the negotiated procedure71. This possibility is 
also compatible with the GPA. While using negotiations, CAEs should find it easier 
to make purchases which meet their precise needs - at the MS level this could result 
in  more  effective  use  of  public  funds.  If  the  negotiated  procedure  with  publication 
was more easily available, there could be less incentive to circumvent the Directives 
(e.g.  by  direct  awards)  and  again,  this  could  result  in  more  effective  use  of  public 
funds.  Such  measures  could  also  generate  some  reduction  to  the  total  cost  of 
procurement, as this procedure is globally cheaper than the open procedure72. 

A new lighter regime for sub-central authorities would be in line with international 
obligations  (GPA),  therefore  no  significant  negative  impacts  on  the  international 
level are expected.  

5.2.3.3.  Impacts on the Internal Market 

More  flexibility  and  increased  choice  in  procurement  is  expected  to  generally 
improve  procurement  outcomes.  The  typical  negotiated  procedure  attracts  fewer 
tenders  than  the  corresponding  open  procedure.  However,  a  higher  proportion  of 
negotiated contracts are awarded to cross-border suppliers.  

The  impacts  of  a  lighter  regime  would  depend  on  the  details  of  provisions  to  be 
introduced  –  if  for  example  publication  obligations  were  to  be  lighter  for  certain 
actors (e.g. publication of a PIN instead of a CN), transparency would diminish. This 
measure could also have implications on the international level.  

5.2.3.4.  Summary of stakeholders views on this option 

The  GP  replies  have  shown  that  there  is  broad  support  for  the  suggestion  to  allow 
more negotiation in public procurement procedures and/or generalising the use of the 
negotiated procedure with prior publication of a contract notice. With the exception 
of  citizens  and,  to  a  certain  extent,  SME  representatives,  all  stakeholder  groups 
favour  more  negotiation  in  award  procedures  for  all  types  of  contracts  and 
contracting authorities. However, stakeholders are well aware that an increased use 
of negotiated procedures  can have negative consequences in terms  of transparency, 
non-discrimination  and  fair  and  objective  proceedings.  A  clear  majority  of 

71 
72 

Replies to question 19 of the GP. 
Negotiated  procedure  -  €26,000,  compared  to  €27,200  for  the  open  procedure,  mainly  due  to  lower 
number of bidders; see: section 8.8.4. 

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respondents share the view that a generalised use of the negotiated procedure might 
entail  risks  of  abuse  and  discrimination  and  that  additional  safeguards  for 
transparency and non-discrimination would be necessary in order to compensate for 
the higher level of discretion. 

The  GP  analysed  the  possibility  of  providing  a  lighter  procedural  framework  for 
local  and  regional  authorities  allowed  under  the  GPA  rules  for  sub-central 
authorities.  Responses  on  such  suggestions  are  mixed.  A  majority  of  public 
authorities  and  civil  society  organisations  support  such  a  regime  while  all  other 
groups of stakeholders are against it. Some respondents – mainly public authorities – 
question the appropriateness of a special treatment for local and regional authorities, 
arguing that it would be preferable to simplify the rules for all contracting authorities 
instead of creating new classes and distinctions. 

5.2.3.5.  Impacts on administrative burden and simplification 

The new lighter regime proposed under PRO.LEGI.FLEXIB option would simplify 
procedural  steps  in  procurement  of  goods,  works  and  services  by  sub-central 
contracting  authorities.  It  would  reduce  the  level  of  detail  and  frequency  of 
publication  requirements,  thereby  making  the  procedures  less  time-consuming  and 
involving less paperwork. Some positive impacts could be also expected with regards 
to limiting administrative burden for companies - as a result of the introduction of a 
new  lighter  regime  the  information  obligations  during  the  bidding  phase  should 
generally be less burdensome (less detailed, as a shorter PIN would replace a CN as a 
means to announce a call for competition). 

Enhanced flexibility of procedures (for example by permitting unlimited recourse to 
the  negotiated  procedure  with  publication)  could  also  be  the  source  of  some 
improvements in terms of lessening the administrative workload for companies – if 
the negotiated procedure is used, tender documents could be more general (than for 
example  in  restricted  and  open  procedures)  and  more  information  could  be 
transmitted to CAEs via non-paper based means (i.e. through negotiations). 

5.2.4. 

Summary of impacts of options in Procedures against specific objectives 

Improving the design of certain tools and procedures, together with the provision of 
greater  legal  clarity  on  their  appropriate  use  would  improve  the  overall  cost-
efficiency  and  proportionality  of  procedures.  Introducing  changes  that  would 
increase  choice  and  improve  the  flexibility  of  procedures  could  also  improve 
procurement outcomes, although certain safeguards would be necessary.  

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Table 11): Summary of impacts of all options in Procedures  

Specific objectives 

Improve cost efficiency 

Option 

PRO.NC 

PRO.LEGI.DESIGN 

Realise opportunities to 
achieve best outcomes 
for society 

Create EU wide rather 
than national markets 

0 

(++) 

0 

(+) 

0 

(+) 

Aggregation/repetitive 
purchasing can improve 
proportionality of 
procedures & makes the 
most of economies of scale; 
e-procurement and other 
modifications should 
streamline & simplify 
provisions on procedures 

Aggregation can facilitate 
strategic procurement; e-
proc can reduce time taken 
and allow greater 
monitoring of strategic 
procurement 

Joint cross-border 
procurement facilitates/ 
strengthens EU public 
procurement markets; 
Greater use of paperless 
procurement removes 
some geographic barriers 
and strengthens EU 
public procurement 
market 

PRO.LEGI.FLEXIB 

(+ ) 

(+) 

(+ / ≈) 

Increases flexibility and 
provides more legal 
certainty  

Increases flexibility of 
CAEs to address strategic 
issues (innovativeness, 
eco-innovativeness) 

Better / more flexible 
procedures improve the 
functioning of IM in 
general 

5.3. 

Strategic public procurement 

5.3.1. 

Impacts of STR.NC option 

The expected consequences of the "no change" scenario are presented in section 2.4). 

5.3.2. 

Impacts of STR.LEGI.FACILIT option 

Critical choice: 

Enable CAEs to frame procurement needs in ways that integrate other policy goals. 

Headline action(s): 

- Allow consideration of entire life-cycle costs in award criteria 

- Allow inclusion of factors directly linked relating to production processes in award 
criteria and technical specifications 

-  Introduce  the  "Innovation  partnership"(new,  special  procedure  for  purchases  not 
yet available on the market) 

5.3.2.1.  Impacts on CAEs 

Under  the  first  headline  action,  contracting  authorities  would  be  able  to  use 
performance on environmental and other dimensions as a valid criterion for making 
their purchasing decision. Many contracting authorities report that they have tried to 

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integrate  environmental  or  other  considerations  into  performance  related  technical 
specifications,  contract  clauses  and  other  indirect  routes.  Such  action  would  permit 
them to use measurable performance in respect of these considerations as a possible 
criterion for distinguishing between offers. This would provide new possibilities and 
legal certainty to those CAEs which spontaneously or under the impetus of national 
or  EU  initiatives,  wish  to  favour  procurement  outcomes  which  perform  better  on 
environmental or welfare grounds.  

To make use of these possibilities, CAEs would need off-the-shelf methodologies for 
measuring and comparing costs generated by the different tenders. Life cycle costing 
(LCC) is an established methodology which allows the evaluation of the costs of an 
asset  throughout  its  entire  life-cycle.  The  calculation  of  life  cycle  costing  is  highly 
dependent on the training and experience of the staff involved in tender specification 
and evaluation and based on the current levels of experience and use, increased use, 
even  drawing  on  standardised  (EU  provided)  methodologies  could  reasonably  be 
expected  to  trigger  learning  and  application  costs.  Also,  the  results  of  a  survey  of 
contracting authorities in the Adelphi study indicate that few currently have the skills 
or systems in place to be able to verify whether the goods or services provided by a 
contractor actually meet the specifications required.  

However,  experience  with  some  of  these  approaches  has  been  growing  quickly. 
Under Directive 2009/33/EC contracting authorities are required to take into account 
the  energy  and  environmental  impacts  of  vehicles  over  their  life  time  and  an 
appropriate  methodology  is  provided  to  calculate  the  LCC  for  such  vehicles.  On  a 
voluntary basis, examples of environmental criteria have been established for a set of 
18 product and service groups (see the GPP training toolkit73), which, to the extent 
possible,  take  into  account  life  cycle  costing  considerations  There  is  already  a 
considerable amount of information available, including estimates in monetary terms 
of the costs of emission of green house gasses and particulate matter and fact sheets 
on how to apply life cycle costing. However many issues such as applicable discount 
rates  and  transport  costs  would  need  to  be  considered  further  before  a  complete 
common  methodology  for  the  calculation  of  life  cycle  costs  for  procurement 
purposes would be ready for adoption.  

There  would  be  a  need  for clear  and  competent  execution of  procedures  under  this 
option.  In  the  event  of  question-marks  over  the  objectivity  and  fairness  of 
procedures, CAEs may be confronted with increased legal challenge. 

According  to  a  recent  survey  of  CAEs,  48%  seek  innovative  products,  solutions  or 
services in their tender documents on at least some occasions; 7% indicate that they 
aim to do this as much as possible and 10% indicate that they do so regularly74. The 
idea  of  a  tailor-made  procedure  (the  innovation  partnership)  is  to  allow  CAEs  to 
support the development and subsequent purchase of innovative solutions. The CAE 
could  clearly  indicate  their  interest  in  such  proposals,  while  retaining  broad 
competition  and  ensuring  that  the  procedure  could  be  conducted  in  stages  and 
reviewed as the solution approached full scale production. There would be an onus 
on the contracting authorities to frame desired outcomes as clearly as possible at the 

73 
74 

See http://ec.europa.eu/environment/gpp/toolkit_en.htm 
Source: Adelphi study page 82, for complexity (below) see page 140. 

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outset, and engage in iterative rounds of negotiation with suppliers. Experience with 
comparable procedures (e.g. competitive dialogue) shows that these procedures entail 
longer periods and higher cost. However, their growing use testifies to the fact that 
they  respond  to  a  real  need  of  CAEs  and  help  purchasers  and  suppliers  explore 
promising solutions prior to investment / commitment which may ultimately deliver 
significant financial savings and/or strategic benefits.  

Whilst  there  would  be  some  costs  associated  with  adapting  these  measures,  the 
voluntary  approach  proposed  would  allow  CAEs  to  retain  a  greater  choice  on 
whether  to  adopt  such  measures  or  not  and  thereby  better  reflect  their  immediate 
needs  and  situation.  This  would  allow  them  to  balance  the  (generally  financial) 
implementation costs against the achievement of wider policy goals, which may also 
translate into financial as well as more societal benefits. 

Strategic  procurements  are  perceived  to  cost  more  than  traditional  procurements, 
more  often  than  vice  versa.  To  the  extent  that  CAEs  are  subject  to  a  fixed  budget 
constraint,  this  may  imply  lower  volumes  of  purchasing.  However  there  is  some 
evidence from green procurement that strategic procurement can deliver lower costs 
as  well  as  higher  environmental  benefits.  For  example,  the  draft  revised  Buying 
Green Handbook (to be published during 2011) reports that: 

•  The City of Vienna saved €44.4 million and over 100,000 tonnes of CO2 between 

2004 and 2007, through its EcoBuy programme. 

•  £40.7  million  (€47.2  million)  could  be  saved  in  the  UK  if  the  proposed 
Government  Buying  Standards  (GPP  criteria)  are  applied  by  all  central 
government  departments  and  executive  agencies,  according  to  a  cost-benefit 
analysis which monetised the potential impacts. 

5.3.2.2.  Impacts on businesses (including SMEs) 

Under this option, suppliers would be faced with more sophisticated and demanding 
procurement specifications from public authorities – expressed in new award criteria, 
or framed over the course of new procedures. This might prompt them to adopt one 
of two strategies: 

–  Develop their proposals and capacity to respond to these demands, and in so doing 
contribute to a transition of production/supply base towards superior technologies; 

–  Exit these markets and focus on supplying less demanding purchasers. 

The  decision  would  vary  from  supplier  to  supplier,  and  market  to  market  as  a 
function  of  the  demands  of  public  purchaser.  Generalised  exit  from  markets  could 
reduce the intensity of competition for individual contracts. However, this is likely to 
be a transitional phenomenon, as suppliers would probably re-enter the market after 
an  adaptation  period.  In  the  absence  of  comprehensive  and  consistent  guidance  on 
how  to  provide  information  relating  to  LCC  or  the  production  process,  suppliers 
could be expected to respond in a range of potentially very different ways, providing 
different levels of detail. They would often incur costs in collecting and processing 
such data. It could also make it difficult for CAEs to assess the bids. 

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There may be direct costs for suppliers which take the form of acquisition of labels, 
or certificates to demonstrate compliance with certain requirements. These costs and 
challenges could be more significant in situations where demands relate to aspects of 
the  supply  chain  beyond  the  direct  control  or  responsibility  of  the  bidder  (such  as 
compliance of inputs from third countries with requirements). These costs could be 
onerous  for  SMEs.  Also,  longer  and  iterative  procurement  procedures  are  likely  to 
discourage suppliers who do not have 'deep pockets'.  

The operating environment for suppliers would become more challenging if they are 
faced  with  more  varying  demands  and  approaches  from  different  contracting 
authorities (e.g. competing labels, or different certification methods). 

78% of respondents to the Green Paper consultation were of the view that SMEs in 
particular would encounter difficulty in responding to these requirements. This view 
was  particularly  pronounced  amongst  CAEs  whereas  Member  States  and 
representative bodies were more sanguine about the prospects for SMEs. 

Innovation partnerships would provide research oriented economic operators with a 
structured long-term partnership with CAEs enabling them to understand the specific 
needs of CAEs and to develop new personalised innovative solutions to be delivered 
to agreed performance levels and costs. The framework of the innovation partnership 
would  guarantee  a  sufficient  degree  of  competition  during  the  innovation  partner 
selection  phases  and  should  provide  for  the  necessary  IPR  transfer  and  protection 
arrangements  depending  on  the  individual  circumstances.  The  structure  of  the 
innovation  partnership  and  the  possible  participation  of  multiple  CAEs  should 
provide the necessary "market pull" for innovative solutions enabling the economic 
operators  to  reach  the  thresholds  of  economic  profitability  without  foreclosing  the 
market. 

5.3.2.3.  Impacts on Member States 

Strategic  procurement  can  be  expected  to  shift  consumption  and  supply  towards 
welfare-improving  outcomes.  There  is  anecdotal  evidence  from  across  the  EU  of 
how  properly  conceived  and  executed  procurement  procedures  have  led  to  the 
selection  of  promising  offers  and  helped  improve  performance  against  strategic 
goals.  In  Italy,  for  example,  fifteen  major  projects  for  central  government  websites 
and  hardware  procurement  (worth  €71  million)  were  assessed  to  evaluate  their 
compliance  with  laws  on  accessibility  in  2006.  Construction  contracts  awarded  by 
the National Road Administration contain a standard clause placing an obligation on 
the  contractors  to  comply  with  certain  (core  ILO)  conventions  when  performing 
contracts in Sweden75. 

However,  68%  of  surveyed  CAEs  admitted  that  they  did  not  verify  whether  the 
promised  performance  was  actually  delivered.  Moreover,  expectations  must  be 
tempered  by  awareness  that  the  public  sector  is  not  the  dominant  purchaser  in  any 
market  (except  defence).  The  impact  would  vary  from  product  group  to  product 
group; for some products, the impact would be low, whereas in other cases (e.g. copy 
machines, street lighting), the  public  sector has a strong power to steer the market. 

75 

Source: Buying Social, pages 33 and 45. 

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However, it is likely that 'voluntary' strategic procurement would change outcomes at 
the margins and only progressively. 

these  approaches.  They  cannot  be  expected 

As  mentioned  above,  CAEs  would  need  operational and  reliable methodologies for 
these 
implementing 
methodologies independently. Central guidance – ideally from the EU, but possibly 
also  from  national  procurement  authorities  –  would  be  needed  if  contracting 
authorities  are  to  implement  these  possibilities.  There  would  therefore  be  a  cost  to 
Member States of developing and disseminating these techniques. 

invent 

to 

It  is  crucial  for  Member  States  to  support  innovation  in  order  to  keep  their 
infrastructure at the upper edge of technological efficiency. Apart from R&D funding 
by traditional means in form of grants and financial incentives, public procurement 
budgets  present  an  important  financial  'market  pull'  that  can  provide  for  a  sensible 
effect  when  oriented  to  specific  direction.  Member  States  therefore  need  clear  and 
efficient  tools  enabling  them  to  seek  for  innovative  solutions  in  their  public 
procurement procedures. 

5.3.2.4.  Impacts on the Internal Market 

To  the  extent  that  the  pattern  of  consumption  and  production  moves  towards  more 
sustainable patterns, the benefits (particularly environmental) may also spill-over to 
other Member States. The transition could also stimulate the search for competitive 
advantages  and  actually  stimulate  greater  competition  in  particular  clusters  or 
markets. Survey responses from seven vanguard Member States suggests that 45% of 
the  value  of  expenditure  on  10  product  groups  frequently  purchased  by  the  public 
sector was oriented towards green contracts76. 

The possibility for contracting authorities to introduce additional considerations into 
their  purchasing  decisions  would  increase  the  complexity  of  the  award  decision.  In 
the absence of operational and fairly implemented methodologies, there is a risk that 
award decisions would involve a greater degree of subjectivity. If methodologies are 
not common and widely understood, suppliers from partner Member States may be 
disadvantaged  –  for  example  if  jurisdiction  specific  labels  or  certificates  were 
required, or methods for calculating externalities led to different valuations. 

In particular, the decision to permit environmental impacts linked to transport costs 
could penalise suppliers from remote regions of the single market. There would be a 
need  to  ensure  a  proportionate  and  objective  approach  to  valuing  these  costs,  and 
adopting  common  positions  on  how  such  results  were  taken  into  account  for 
purposes of award decision. 

It would, to the greatest extent possible, be necessary to mitigate this risk through the 
definition  of  common  valuation  and  measurement  methodologies.  This  has  already 
been done in the case of clean vehicles. If life-cycle costing is chosen as part of the 
award criteria by a CAE, a provision to enforce the use of a common methodology 
(when  it  has  been  adopted  by  a  legislative  act  of  the  European  Union),  could  be 
designed  to  allay  these  concerns.  The  use  of  life-cycle  costing  would  thereby  be 

76 

Source: PwC 2009 study. 

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64 

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encouraged  and  facilitated,  but  remain  voluntary,  so  that  certain  contracting 
authorities retain the choice to apply it or not. 

Greater encouragement of innovation could lead to the development of new solutions 
which could change the market. Whilst this is unlikely to happen in all markets, even 
a small change could lead to significant benefits to the internal market. 

5.3.2.5.  Summary of stakeholders views on this option 

Opinions  were  divided  on  whether  EU  procurement  legislation  should  allow 
considerations  other  than  strict  price/quality  to  be  taken  into  account.  41%  of 
respondents supported this approach, while 59% opposed. 80% Of Member State and 
50% of contracting authorities opposed this idea while representatives of civil society 
(NGOs) were strongly supportive.  

There  was  a  certain  degree  of  support  for  concrete  measures  such  as  allowing 
directly  linked  externalities  in  production/performance  of  goods  or  services  to  be 
taken  into  account  particularly  in  the  award  phase  (including  clearer  acceptance  of 
life  cycle  costing).  Contracting  authorities  are  not  in  favour  of  making  the 
consideration  of  life-cycle  costs  mandatory  and  many  respondents  emphasise  that 
such measures presuppose the establishment of a clear and agreed methodology and 
common criteria to ensure correct assessment of the life-cycle cost. 

Stakeholders clearly advocate further promoting and stimulating innovation through 
public  procurement.  They  recommend  for  instance  a  greater  use  of  procedures 
particularly suited for innovative procurement such as competitive dialogue, design 
contests and in particular the negotiated procedure, as well as a wider allowance of 
variants  and  performance  requirements  in  technical  specifications.  Another  idea 
brought up by some stakeholders is that contracting authorities should be given the 
possibility (framed in the procurement rules) to react to unsolicited proposals. 69% 
of  stakeholders  supported  the  idea  of  tailor-made  procedures  (as  an  alternative  to 
competitive  dialogue)  to  promote  innovative  responses  to  procurement  needs.  MS, 
CAEs and representative bodies were uniformly supportive of this approach. 

In  a  recent  Eurobarometer  (363),  a  clear  majority  of  respondents  were  willing  to 
accept that CAEs did not choose the cheapest bid for a public contract when social 
aspects,  such  as  job  creation,  were  taken  into  consideration.  Similar  high  levels  of 
support  were  expressed  in  relation  to  the  consideration  of  environmental  (green) 
factors. 

5.3.2.6.  Impacts on administrative burden and simplification 

The obligations under option STR.LEGI.FACILIT would  not be greater than  under 
the more prescriptive STR.LEGI.EFNFORC option and could be less, depending on 
the  level  of  take-up  by  MS.  The  main  difference  between  the  impacts  on 
administrative burden between the two legislative options is that up-take of strategic 
procurement  would  be  voluntary  under  STR.LEGI.FACILIT.  Each  CAE  would  be 
allowed to make its decision on whether or not the benefits of strategic procurement 
outweigh more burdensome procedures in the short-term. 

EN 

65 

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As far as firms are concerned, once a CAE makes a decision that it wishes to pursue 
strategic goals using the enhanced toolbox that would be put at their disposal under 
option  STR.LEGI.FACILIT,  firms  would  anyway  face  additional  administrative 
burden (information obligations). While submitting offers in response to invitations 
to tender that involve strategic requirements, firms would have to provide more detail 
on  their  costs  and  processes  (e.g.  to  fulfil  life-cycle  costing  methodologies).  As  a 
result,  the  costs  of  bidding  would  probably  increase.  However  there  may  be  some 
mitigating solutions, which could decrease these costs – for example, provision of a 
limited set of methodologies, databases containing standardised cost information e.g. 
CO2 offsets, transport costs (that this option envisages).  

5.3.3. 

Impacts of STR.LEGI.ENFORC option  

Critical choice: 

Remove discretion from CAEs: they must award (all or part) contracts on the basis 
of performance in respect of other policy goals. 

Headline action(s): 

- Introduce obligations on "what to buy" (quotas); 

- Require CAEs to use certain defined award criteria. 

5.3.3.1.  Impacts on CAEs 

The  imposition  of  EU  level  quotas  or  the  definition  of  certain  award  criteria  could 
have  a  powerful  effect  in  ensuring  that  certain  considerations  were  given  greater 
weight in individual purchasing decisions. It would however tie the hands of CAEs 
when it came to defining their purchasing needs or eligible solutions. The regulatory 
imposition of such requirements, without regard to the real needs, circumstances, and 
resources  available  to  CAEs  could  lead  to  sub-optimal  procurement,  reduce 
allocation  efficiency  and  complicate  sourcing  of  inputs  to  support  public  service 
delivery  Renewable  energy  sources,  for  example,  can  cost  three  or  four  times  as 
much as their non renewable equivalents and not all are equally available across the 
EU.  The  estimates  made  by  different  models gave a range of €24–31 billion to the 
additional production cost in the year 2020 of achieving a 20% share of renewable 
energy77. 

Many contracting authorities report that strategic procurements entail greater risk or 
cost than traditional procurements. When stipulating environmental requirements, for 
example, 37.9%  of  the survey  participants experience  cost  increases, whereas costs 
remain constant for 33.2%. Only 1.7% report no increase in cost78. To the extent that 
this perception is borne out, it suggests that strategic procurement may entail higher 
costs which may impose choices on CAEs who may not have budgets which allow 
them to meet the costs involved without affecting their other purchases/operations. 

77 
78 

Source: The renewable energy impact assessment SEC(2006)1719, page 15-18. 
27.1% had no opinion on the change in cost. 

EN 

66 

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There would be a need for investment in monitoring and quota management capacity 
at the level of CAEs. In the case of award criteria, CAEs would need to demonstrate 
that the rating of different tenders against the additional criteria had been conducted 
fairly and properly, and that scoring rules (weighting) had not distorted the outcome 
of the procedure. Despite the simplicity of the legislative approach, the imposition of 
obligatory award criteria would present considerable implementation challenges for 
CAEs. 

5.3.3.2.  Impacts on businesses (including SMEs) 

Under a system of quotas, certain parts of the market would be reserved to suppliers 
being able to propose solutions embodying particular characteristics. Other suppliers 
would  be  excluded  from  these  markets.  Depending  on  how  lucrative  these  markets 
are, this could lead to extensive investment by suppliers in qualifying to participate 
in these markets, or in demonstrating the eligibility of their tenders.  

A  system  where  multiple  considerations  were  introduced  as  award  criteria  could 
compromise  the  ability  of  suppliers  to  respond  to  public  tenders.  The  framing  of 
award criteria, and their accumulation, should have close regard to the feasibility of 
the  supply  side  to  respond  to  these  demands.  Absent  this,  the  over-specification  of 
mandatory award criteria could undermine competition for public contracts. 

5.3.3.3.  Impacts on Member States 

The  introduction  of  reserved  budgets  would  give  a  strong  impetus  for  CAEs  and 
suppliers  to  adopt  production/performance  methods  capable  of  meeting  these 
demands. In addition, it is likely to lead to appreciable investment in demonstrating 
formal compliance with qualification requirements. It could lead to over-investment 
in  certificates  or  labels  demonstrating  that  suppliers  meet  certain  requirements. 
However  it  could,  over  time,  deliver  significant  strategic  benefits  and  advances 
against wider policy objectives. 

The fixing of operational and meaningful quotas would be a challenging process for 
policy-makers.  They  would  at  the  same  time  need  to  be  meaningful  –  the  market 
should be capable of supplying the aggregate needs of all public purchasers subject 
to  the  quotas.  They  should  also  be  set  high  enough  to  encourage  suppliers  to  shift 
resources in order to benefit from privileged access to reserved markets, and change 
consumption/production  patterns.  Setting  such  quotas  in  EU  public  procurement 
legislation  would  require  quotas  affecting  a  range  of  different  policy  areas  to  be 
grouped  under  this  one  umbrella  policy.  This  could  lead  to  problems  in  terms  of 
updating  and  ensuring  consistency  with  sector  specific  developments,  or  Member 
States' individual strategies.  

There  would  be  a  need  to  implement  a  system  for  compliance  monitoring  and 
measurement,  both  to  assess  procurement  practice  and  to  measure  the  strategic 
impacts.  

5.3.3.4.  Impacts on the Internal Market 

The  use  of  firm  regulatory  requirements  or  quotas  should  be  framed  and 
implemented  in  a  way  that  does  not  foreclose  tender  procedures  to  suppliers  from 

EN 

67 

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other  Member  States.  The  means  for  demonstrating compliance with award criteria 
would need to be comparable and viable. They should not emerge as a technical trade 
barrier. 

The way in which quotas and award criteria were employed should be monitored to 
avoid  their  manipulation  to  restrict  competition  from  non-domestic  suppliers.  The 
need  to  meet  quotas  should  not  become  a  pretext  for  exempting  procedures  from 
compliance with open tendering requirements for example. In particular, the decision 
to  take  account  of  environmental  impacts  linked  to  transport  costs  could  penalise 
suppliers from remote regions of the single market. There would be a need to ensure 
a proportionate and objective approach to valuing these costs and taking results into 
account for purposes of award decision. 

5.3.3.5.  Summary of stakeholders views on this option 

68% of responses to the Green Paper opposed the imposition of obligations on what 
to  buy  through  EU  legislation.  Around  80%  of  responses  from  Member  States, 
contracting  authorities,  and  all  responses  from  EU  level  organisations  and  citizens 
took  this  view.  Only  representatives  of  civil  organisations  took  the  opposite  view 
(65%). The most frequently raised arguments against such obligations are: the fear of 
too much interference from the EU in the decisions of public purchasers; increased 
complexity  of  the  legal  framework;  the  risk  of  affecting  contracting  authorities’ 
ability  to  adapt  their  purchasing  decisions  to  their  specific  needs;  risks  of  price 
increases  and  of  disproportionate  administrative  costs  for  public  purchasers  and 
businesses, particularly SMEs. 

5.3.3.6.  Impacts on administrative burden and simplification 

To a large extent, the impact on the information requirements that would result from 
option  STR.LEGI.ENFORC  would  depend  on  the  degree  to  which  strategic  quotas 
are set or the detail involved in defining and applying certain award criteria and the 
associated  necessary  monitoring.  Under  this  option,  EU  obligations  would  follow 
from mandatory targets or quotas and MS would have to provide information on their 
progress  against  these  objectives.  Quota  monitoring  obligations  imposed  on  MS 
would  also  generate  additional  reporting  obligations  on  each  and  every  public 
purchaser who awarded a contract involving strategic goals.  

Increased  administrative  requirements  and  obligations  linked  to  the  selection  and 
award  stages  of  procurement  would  almost  certainly  affect  CAEs,  who  would  also 
have to verify and validate the information provided by firms when checking if they 
complied  with  particular  criteria  or  technical  specifications.  As  these  new 
requirements  would  be  based  on  complex  methodologies  (e.g.  to  monetise 
externalities), they might be burdensome to CAEs (if not even beyond the capacities 
of smaller, less professional buyers).  

For  firms,  the  new  provisions  proposed  under  STR.LEGI.ENFORC  would  be  the 
source  of  significant  additional  administrative  burden  (information  obligations)  as 
bidders would have to provide more detail on their costs and processes (e.g. to fulfil 
life-cycle costing methodologies or to prove fulfilment of certain social criteria). The 
costs of bidding would probably increase.  

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As  mentioned  in  section  5.3.2.6),  there  may  be  some  mitigating  solutions,  which 
could decrease these costs – for example, provision of a limited set of methodologies, 
databases containing standardised cost information e.g. CO2 offsets, transport costs.  

5.3.4. 

Summary of impacts of options in Strategic against specific objectives 

The strategic impacts of the facilitative option would generally be lower than under a 
mandatory  approach,  as  there  would  probably  be  some  variation  in  the  degree  of 
implementation  across  MS.  However,  it  would  permit  buyers  to  make  choices 
depending on their individual circumstances and available resources, which could be 
considered particularly important in the present environment of financial strain.  

The  coercive  approach  could  potentially  have  strong  impacts  in  achieving  strategic 
goals  as  CAEs  across  the  EU  would  be  compelled  to  purchase  in  accordance  with 
these  rules.  The  principal  drawback  is  that  the  coercive  option  would  remove 
discretion from the CAE to frame its procurement needs in the areas covered by the 
requirements. This could potentially lead to inferior procurement outcomes and, over 
time, possibly have the perverse effect of locking public procurement into outdated 
preferences.  At  the  present  time,  the  different  countries,  sectors  and  actors  exhibit 
widely  different  levels  of  maturity.  Forcing  the  pace  of  change  through  changes  to 
the EU public procurement rules setting quotas or targets would not appear desirable. 
However,  there  is  no  reason  to  discontinue  the  current  approach  of  using  sector 
specific  legislation,  which  can  been  targeted  at  specific  markets,  based  on  more 
detailed information and analysis.  

Table 12): Summary of impacts of all options in Strategic public procurement 

Specific objectives 

Improve cost efficiency 

Realise opportunities to 
achieve best outcomes for 
society 

Create EU wide rather 
than national markets 

Option 

STR.NC 

STR.LEGI.FACILIT 

0 

(≈/-) 

0 

(+ +) 

0 

(+/≈ ) 

Variable take up could 
limit impacts of more 
complex evaluation 
methodologies and 
potential greater costs of 
strategic purchases 

More consistent use of pp 
to achieve strategic goals; 
differences across MS 
lower the impact but better 
adaptation to local 
specificities 

Effort needed to develop 
and implement common 
metrics and approaches to 
limit possible complexity 
and fragmentation (due to 
permissive nature of 
change) 

STR.LEGI.ENFORC 

(-) 

(+) 

(+/≈) 

In the short term lower cost 
efficiency due to lack of 
experience and knowledge; 
improving over the long 
term, depending on 
availability of standardised 
methodologies  

Public procurement used 
more forcefully to achieve 
other policies objectives – 
however deprive CAEs of 
possibility to frame 
outcomes, lock society into 
certain preferences 

Strategic objectives more 
convergent across the EU: 
but detailed supporting 
metrics and measurement 
needed 

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5.4. 

Access 

5.4.1. 

Impacts of ACC.NC option 

The expected results of the "no change" option have been discussed in section 2.4. 

5.4.2. 

Impacts of ACC.SOFT option 

The impacts of soft-law instruments to improve access are difficult to estimate, since 
the  uptake  of  such  actions  would  be  voluntary  and  vary  from  MS  to  MS.  Broadly 
speaking,  non-legislative  instruments  should  result  in  increased  cross-border 
participation and higher SMEs success rate in public procurement, but their ultimate 
impacts  might  vary  (e.g.  if  trainings  on  doing  business  abroad  are  organised, 
participation will remain voluntary and effects in increased cross-border participation 
cannot  be  guaranteed)  and  are  generally  expected  to  be  lower  than  similar  actions 
which are introduced via legislation. 

New guidance relating to selling abroad could go some way to addressing the current 
inertia identified as affecting many firms and help them design strategies to identify 
and enter new markets. This could benefit both SMEs and cross-border procurement. 

5.4.3. 

Impacts of ACC.LEGI.FACILIT option 

Critical choice: 

Remove administrative barriers to SME participation & cross-border access. 

Headline action(s): 

- Mandatory acceptance of self-declarations as prima-facie evidence for selection;  

- Introduction of a European procurement passport. 

5.4.3.1.  Impacts on CAEs 

This  option  would  have  predominantly  positive  impacts  for  CAEs  as  it  would 
provide operational solutions to key barriers which may be reducing competition, but 
would not impose their use, hence allowing CAEs to exercise choice and judgement 
based on individual circumstances. If measures reducing the information obligations 
placed  on  firms  were  to  be  implemented  (e.g.  through  generalising  the  "winning 
bidder  provides"79  provisions),  this  could  theoretically  reduce  the  efficiency  of  the 
evaluation process for CAEs if, in some cases, a firm identified as a winner fails the 
evidentiary tests (and the CAE would have to go to their second choice or repeat the 
process). From the information available, such instances are not that common, and in 
most cases CAEs should save time by accepting self-certification of compliance from 
bidders who ultimately do not win the contract. Also, if more firms feel able to bid, 
competition  could  increase,  which  could  lead  to  greater  price  savings  or 
improvements in quality for the CAE. 

79 

Rather than all bidders providing the requested evidentiary documents, these would be only requested 
from the winner i.e. when submitting a bid, suppliers could include a self-certification of compliance. 

EN 

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Introducing a new generation of IT tools for the publication of notices would further 
enhance transparency at EU level, leading to more competition that could lower the 
price  paid.  New  IT  tools  could  also  be  the  source  of  important  savings  for  CAEs, 
introducing further automation and hence, consuming less time and effort. In a new 
generation  of  standard  forms80,  data  would  become  re-usable  and  input  would  be 
more frequently limited to tick-boxes (rather than text fields), reducing the costs to 
CAEs. Other tools, such as a more widespread use (accompanied by more consistent 
updating  by  MS)  of  e-Certis  or  the  introduction  of  an  EU  public  procurement 
passport would also help CAEs to carry out procurement involving the participation 
of  non-national  bidders.  The  EU  public  procurement  passport  would  contain 
information, validated at Member State level, confirming that a business is compliant 
with  certain,  frequently  requested  criteria.  Such  measures  would  remove  any 
uncertainty  relating  to  the  validity  or  appropriateness  of  a  given  piece  of  evidence, 
even  when  written  in  an  unfamiliar  language.  They  should  also  make  the  process 
more  efficient  for  the  CAE,  especially  as  it  would  not  have  to  approach  different 
national entities to request or validate particular evidence.  

5.4.3.2.  Impacts on businesses (including SMEs) 

Increasing  the  use  of  self-certifications  could  significantly  reduce  administrative 
burden  for  firms81  and  result  in  cost  savings  of  around  €169  million,  since 
approximately  4  firms  per  bid  would  not  have  to  provide  the  detailed  information 
requested.  Similarly,  using  a  European  public  procurement  passport  should  be 
simpler  for  firms  who  would  have  a  document  whose  validity  would  have  to  be 
recognised by all CAEs, including those in other Member States. Mutual recognition 
of such passports should also reduce the need for translation, thereby reducing cost. 
This  could  encourage  greater  participation in  public  procurement  contracts,  both  in 
their domestic markets as well as in those of other countries. 

Revised  tools  to  enhance  transparency  (e.g.  a  new  generation  of  standard  forms) 
would equalise access to public procurement markets for all companies irrespective 
of  their  size.  Encouraging  more  language  provision  through  wider  translation 
possibilities in OJ/TED (as a minimum through greater standardisation of structured 
data  and  less  reliance  on  free  text  which  requires  translation)  would  also  improve 
access  to  business  opportunities  for  all  firms  (including  SMEs),  allowing  firms  to 
decide  if  the  opportunities  presented  in  a  particular  market  are  worth  the  costs  of 
entry82.  An  improved  e-Certis  would  help  firms  to  identify  which  documents  and 
certificates  they  need  to  submit  when  tendering  cross-border,  reducing  their 
uncertainty  and  speeding  up  their  ability  to  bid.  If  the  mutual  recognition  of  such 
forms was introduced, firms would also incur fewer translation costs.  

80 

81 

82 

Regulation  (EC)  1150/2009  defines  the  different  forms  for  publishing  information  about  public 
procurement opportunities in OJ/TED. 
It could reduce administrative burden for firms by over 80% (as there are on average 5.4 bidders per 
contract,  therefore  4.4  no  longer  would  have  to  provide  the  information).  This  measure  alone  would 
significantly reduce the total administrative burden, reducing the initial figure by around €169 million 
and far exceeding the EU's target of a 25% reduction; see: section 8.8.6. 
However, improved translation in OJ/TED can not remove the language barriers; firms would still have 
to operate in the language of the country and obey its laws, which are unlikely to be available in a 2nd 
language. 

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5.4.3.3.  Impacts on Member States  

Increasing  access  to  government  markets  should  lead  to  higher  competition  and 
lower prices/improved quality. Whilst both the headline measures should increase the 
degree  of  competition  national  firms  may  face  from  businesses  based  in  other 
Member  States,  these  firms  should  also  enjoy  equal  access  to  markets  in  other  EU 
countries. The costs of setting up an EU procurement passport would vary depending 
on  the  format  chosen  (e.g.  electronic  vs.  paper),  the  number  of  different  evidences 
covered  by  the  passport  and  the  infrastructure  in  place  to  provide  key  information 
through  national/central  databases.  Such  choices  would  be  made  on  a  country  by 
country  basis,  to  reflect  their  own  resources  and  policy.  Whilst  the  set  up  costs  of 
such systems could be quite large in some countries where little such infrastructure 
exists, the use of such passports would be beneficial both within a country as well as 
outside.  

Improved tools for publication in OJ/TED would increase transparency and facilitate 
access to structured statistical information on public procurement markets that can be 
shared  by  Member  States  with  the  Commission.  The  widespread  use  of  new, 
streamlined IT tools for publication which should be less time consuming for CAEs 
and firms, when aggregated, could generate important budgetary saving for Member 
States. Increased use of e-Certis would put some additional control and maintenance 
duties (in terms of updating the content of the database) on MS. This would require 
certain  involvement  from  the  national  administrations  in  charge  of  public 
procurement. These costs however would be marginal from a budgetary perspective. 

5.4.3.4.  Impacts on the Internal Market  

improve  cross-border  bidding  such  as  self-
In  general,  measures  which 
certification/winning  bidder  provides  and  the  EU  procurement  passport,  should 
benefit  the  internal  market  and  should  improve  competition.  Improved  tools  for 
publication  in  OJ/TED  would  significantly  increase  transparency  as  they  would 
facilitate  access  to  structured  statistical  information  on  EU  public  procurement 
markets.  

Encouraging  more  language  provision  through  wider  translation  possibilities  in 
OJ/TED  would  generate  additional  costs  for  the  Commission  (i.e.  the  Publication 
Office  in  particular).  The  current  yearly  cost  of  managing  OJ/TED  is  around  €14 
million. If more investment in translation functionalities was to be undertaken, these 
costs could increase, but should be small compared to the related benefits.  

Care  would  need  to  be  taken  to  specify  the  conditions  under  which  MS  could 
introduce  SME  specific  measures.  If  this  is  not  done,  it  could  actually  create  some 
access  barriers  and  decrease  convergence  across  the  EU  (if  Member  States  chose 
different solutions).  

5.4.3.5.  Summary of stakeholders views on this option 

Many stakeholders who replied to the GP consultation consider that SME access to 
public  contracts  should  be  further  improved,  also  through  changes  to  the  EU 
legislative  framework.  Specific  obstacles  for  SME  access  that  are  recurrently 
highlighted  are  administrative  burdens  and  costs  of  participation,  particularly  with 

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regard  to  documentation  for  qualification  of  candidates  (evidence  for  selection 
criteria).  

Hence,  a  vast  majority  of  stakeholders  think  that  business  and  in  particular  SMEs, 
would benefit greatly from an alleviation of the administrative burden related to the 
choice  of  bidders.  In  particular,  stakeholders  from  all  interest  groups  advocate  the 
use  of  self-declarations  and  the  introduction  of  a  rule  according  to  which  original 
certificates may only be required from the winning bidder.  

A  majority  of  business  and  public  authorities  –  but  not  MS  -  think  that  additional 
measures are needed to strengthen the innovation capacity of SMEs, recommending 
for instance financial support schemes and compensation of bidding costs. 

Finally, stakeholders identify a clear need for better recognition of certificates across 
borders  and  a  better  coordination  of  national  systems  in  this  context.  Some 
respondents  think  that  certificates  should  have  a  European-wide  standardised 
content;  others  recommend  a  greater  use  of  electronic  databases  for  facilitating  the 
use of certificates in a cross-border context, such as e-Certis. The idea of a European-
wide prequalification system finds some support from business but meets opposition 
from contracting authorities. 

5.4.3.6.  Impacts on administrative burden and simplification 

Option  ACC.LEGI.FACILIT  focuses  on  proposals  and  headline  actions  that  can 
significantly  reduce  administrative  burden  for  companies.  New  provisions  aimed  at 
reducing the information obligations placed on firms, by requiring only the winning 
bidder to provide information, would immediately reduce the administrative burden 
by just over 80% (on average there are 5.4 bidders per contract, so 4.4 no longer have 
to  provide  the  information)  i.e.  far  exceeding  the  EU's  target  of  a  25%  reduction. 
Coupling  this  with  the  creation  of  a  European  procurement  passport,  whereby 
processes  would  be  put  in  place  to  allow  a  national  agency  to  provide  some  of  the 
requested  information  could  significantly  reduce  the  information  requirements  on  a 
bidder. 

Similarly,  simplification  of  publication  requirements  through  an  overhaul  of  the 
standard forms could be a milestone in the reduction of administrative burden for the 
thousands  of  firms  that  participate  each  year  in  public  tenders  above  the  EU 
thresholds.  A  new  generation  of  standard  forms  would  be  expected  to  be  (to  the 
extent possible) automated so that a vast majority of information introduced in TED 
would be re-useable by the IT systems (e.g. information introduced in PIN would be 
re-used in a CN and a CAN). Such a new generation of standard forms would also be 
principally based on tick-boxes (to reduce the number of text fields), so that the time 
spent  by  the  different  parties  on  completing  these  procedural  obligations  could  be 
limited to an absolute minimum. 

5.4.4. 

Impacts of ACC.LEGI.ENFORC option 

Critical choice: 

Introduce prescriptive measures to reserve parts of public procurement markets for 
SMEs or require structuring of purchases in way that favour SME participation. 

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Headline action(s): 

- Impose mandatory use of lots for all above threshold contracts; 

- Quotas for share of procurement contracts/budget awarded to SMEs. 

5.4.4.1.  Impacts on CAEs 

If  coercive  tools  that  seek  to  force  an  increase  in  market  access  were  introduced, 
CAEs would loose a certain element of flexibility and not always be able to adapt to 
their individual circumstances at a given point in time. The time required to carry out 
procurement  procedures  would  probably  increase  which  could  have  some  cost 
implications. For example, if the mandatory use of lots or SMEs quotas were to be 
introduced, CAEs would have to spend time ensuring compliance and checking that 
these conditions were met. To verify compliance, more documentation would need to 
be  requested,  analysed  and  evaluated  in  the  selection  stage  (e.g.  additional 
information concerning bidders to verify their SME status) or award stage (checking 
bids  for  many  individual  lots  rather  than  a  single  contract),  increasing  the  duration 
and hence procedural costs.  

The introduction of the mandatory use of lots would increase the complexity of the 
award procedure, as each new lot could require a separate definition of requirements 
and a separate evaluation of offers83. Similar issues would arise in terms of verifying 
that quotas for SMEs were being met. There could also be some increases in price, as 
firms try to recuperate their resultant additional administrative expenses. Finally any 
coercive measures would limit the flexibility and autonomy for CAEs to determine 
the  most  appropriate  way  of  conducting  public  procurement  and  there  could  be 
tensions between choosing the best bid and meeting certain quotas.  

Excessive uniformity, which might be inherent in some of the proposed actions (e.g. 
a mandatory pan-European pre-qualification system) could have negative impacts on 
the quality of selection of bidders, as CAEs would no longer be able to ask for very 
specific  (tailor-made  to  their  needs)  requirements,  but  would  have  to  accept 
candidates  fulfilling  more  general/standardised  qualifications.  In  the  case  of 
obligatory subcontracting, CAEs would lose a certain degree of control over contract 
execution  that  could  have  negative  impacts  and  reduce  the  cost-effectiveness  of 

83 

An  alternative  solution  (proposed  under  the  ACC.LEGI.FACILIT  option)  would  be  to  introduce  the 
compulsory subdivision into lots only where certain conditions are satisfied, thereby alleviating some of 
the negative consequences discussed above. Variants of this solution are already being used in France 
(e.g.  compulsory  subdivision  into  lots  unless  it  is  technically  difficult,  expensive  or  purely  restricts 
competition to local markets) and Germany (exception based on technical or economic reasons). Even 
with a "lighter" approach, the burden of justifying any exceptions would fall on the CAE, resulting in 
procedures  which  are  potentially  more  complex  and  information  intensive.  CAEs  might  need  to  seek 
additional  legal  advice  to  ensure  compliance  with  the  rules  (e.g.  to  judge  if  an  obligation  to  split 
contracts into lots could be waived or not). Legal uncertainty risks would be most significant for smaller 
CAEs  who  often  have  less  expertise/experience.  In  France  where  a  similar  solution  operates,  caveats 
have  already  given  rise  to  quite  some,  sometimes  contradictory,  court  decisions.  (most  important 
decisions:  Decision  of  the  "Conseil  d'Etat"  of  11.08.2009  "Communauté  urbaine  Nantes  Métropole", 
Decision  of  the  "Conseil  d'Etat"  of  09.12.2009  "Département  de  l'Eure",  Decision  of  the  "Conseil 
d'Etat"  of  21.05.2010  "Commune  d'Ajaccio"  and  Decision  of  the  "Conseil  d'Etat"  of  24.10.2010 
"Syndicat mixte d'assainissement de la région ouest de Versailles"). 

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procurement.  Some  of  these  actions  (e.g.  obligatory  subcontracting)  could  interfere 
in civil law relationships – again, this could be a potential source of complexity and 
legal uncertainty and might result in higher litigation.  

Similar effects would be likely if obligatory requirements concerning the acceptance 
of bids in a 2nd language were introduced (and which could be counter-productive as 
bidders  should  be  able  to  operate  in  the  native  language  of  a  CAE  if  they  wish  to 
fully understand the business and legal environment).  

5.4.4.2.  Impacts on businesses (including SMEs) 

Measures  proposed  under  this  option  could  increase  transparency  and  access  to 
information  for  firms,  as  certain  requirements  linked  to  public  procurement 
procedures would be similar/the same across all MS. For example a mandatory pre-
qualification  system  for  bidders  would  provide  the  firms  with  clear,  pan-European 
requirements that they would need to meet in order to be accepted in the system.  

A mandatory division of contracts into lots would lower the typical value of a single 
contract  (lot)  which  should  make  public  procurement  contracts  (at  least  from  the 
financial  point  of  view)  more  accessible  for  SMEs84.  In  the  case  of  SME  quotas, 
SMEs  shares  in  the  public  procurement  market  would  most  probably  increase,  but 
bidding  would  become  more  information  intensive  as  firms  would  be  obliged  to 
provide  additional  documentation  (e.g.  concerning  their  turnover,  headcount,  etc.). 
This would lower the cost-effectiveness of procedures. Obligatory subcontracting of 
contracts  would  increase  competition  for  SMEs  while  acting  as  subcontractors,  but 
could disadvantage them significantly as prime contractors (i.e. this measure would 
probably favour big undertakings, as SME would not be qualified/have the capacity 
to act as prime contractors and supervisors of other firms).  

As  far  as  the  GP  replies  are  concerned,  SMEs  are  favourable  to  subdivision  of 
contracts into lots, however there is much more resistance among firms with regards 
to all other measures potentially considered under this option85.  

5.4.4.3.  Impact on Member States 

Coercive  measures  considered  under  this  option  might  increase  administrative 
burden,  complexity  and  duration  of  the  award  procedures  –  at  the  level  of  MS  this 
may  result  in  less  efficient  procurement  procedures  that  lower  the  efficiency  of 
public spending. 

An  obligation  to  divide  contracts  info  lots  is  likely  to  improve  SMEs'  access  to 
procurement markets (directly or indirectly). However, there is no data available on 
the impact of introducing a blanket obligation to use lots. However, in France, where 
an  obligation  to  split  contracts  into  lots  (except  in  certain  cases)  was  introduced  in 
2006,  rates  are  relatively  high  in  terms  of  the  SME  share  in  public  procurement 

84 

85 

As  high  contact  value  is  an  important  obstacle  for  SMEs  in  accessing  public  procurement  markets 
above thresholds; source: GHK study, page 39. 
Replies to questions 46 to 52 of the GP. 

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markets  (France  awards  44%86  of  contract  value  to  SMEs,  as  compared  to  the  EU 
average of 34%). Unfortunately, little other comparative data is available in this area, 
but further analysis is planned.  

5.4.4.4.  Impacts on the Internal Market 

Measures  proposed  under  this  option  should  increase  transparency  and  access  to 
public contracts at the EU level, but this gain would be realised at a certain cost. For 
example,  the  establishment  and  monitoring  of  compliance  with  such  systems  (e.g. 
SME quotas, mandatory use of lots) would have to be carried out by the Commission 
and  involve  some  potentially  significant  budgetary  cost,  not  just  as  a  one-off 
expense, but also in regular maintenance costs (see also actions proposed under the 
legislative  options  relating  to  Governance).  Overall  the  probable  additional 
administrative burden and more time consuming and complex procedures would lead 
to a lower cost efficiency of public procurement markets at the EU level.  

Finally, this option raises some doubts in relation to the subsidiarity principle, as it 
seems likely that several of the actions that are proposed to be coordinated at the EU 
level  (e.g.  mandatory  subcontracting  or  SMEs  quotas),  could  be  performed  more 
effectively at a more immediate or local level.  

5.4.4.5.  Summary of stakeholders views on this option 

The GP replies show mixed support for the introduction of additional measures more 
specifically  focused  on  improving  SME  access,  such  as  mandatory  splitting  of 
contracts into lots or turnover caps. Public authorities are in general quite sceptical 
about such coercive measures; business' opinions are divided. 

Many  stakeholders  are  rather  sceptical  about  the  introduction  of  more  specific  EU 
level  measures  to  encourage  participation  of  bidders  from  other  Member  States.  In 
particular, the idea of requiring contracting authorities to draw up tenders in a second 
language  and/or  to  accept  bids  in  a  different  language  is  rejected  by  a  very  large 
majority of all stakeholder groups. 

5.4.4.6.  Impacts on administrative burden and simplification 

As with the prescriptive option under the strategic procurement section, impacts on 
the  information  requirements  that  would  result  from  option  ACC.LEGI.ENFORC 
would  depend  on  the  degree  to  which  quotas  are  set  and  monitoring  is  required. 
Under  this  option,  EU  obligations  would  follow  from  mandatory  targets  or  quotas 
(e.g.  mandatory  use  of  lots  or  quotas  for  awards  to  SMEs).  Any  quota  monitoring 
obligations  imposed  on  MS  to  provide  information  of  their  progress  against  these 
objectives  would  also  generate  additional  reporting  obligations  on  all  public 
purchasers.  

Increased  administrative  requirements  and  obligations  linked  to  the  selection  and 
award  stages  of  procurement  would  clearly  affect  CAEs,  who  would  also  have  to 
verify  and  validate  the  information  provided  by  firms  when  checking  if  they 

86 

However, according to statistics of the French réseau de commande publique, SMEs'  market share in 
value terms is 35% of public purchases. 

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complied with particular criteria. By splitting a contract into lots, CAEs would often 
have  to  repeat  the  same  evaluation  and  award  process  several  times  with  the 
corresponding increase to both time taken and burden generated. The new procedural 
requirements  might  be  burdensome  and  time  consuming  for  CAEs  (e.g.  additional 
verifications to check the size of economic operators).  

For  firms,  the  new  provisions  proposed  under  ACC.LEGI.ENFORC  would  be  the 
source of additional information obligations as bidders would have to provide more 
detail  on  their  status  (e.g.  data  on  workforce,  turnover  and  ownership  structure), 
which would need to be consistently and periodically updated. However, as firms are 
already required to have some similar information (turnover, balance sheet, number 
of  employees)  in  the  context  of  other  EU  legislation,  e.g.  the  EU’s  accounting 
Directives,  the  additional  costs  of  providing  this  information  in  the  context  of 
procurement  procedures  may  not  be  significant.  Overall,  the  costs  of  bidding  may 
marginally increase.  

Finally,  some  increase  in  administrative  burden  could  be  seen  depending  on  the 
introduction  of  further  requirements  to  verify  sub-contracting  arrangements.  This 
burden would be higher depending on the degree of prescription enforced. 

5.4.5. 

Summary of impacts of options in Access against specific objectives 

Whilst the introduction of coercive measures should lead to more SME and possibly 
more  cross-border  access  to  EU  public  procurement  markets,  it  is  not  clear  that  it 
would  actually  streamline  and  simplify  the  rules.  The  introduction  of  more 
information requirements could increase complexity and administrative burden. Non-
coercive  instruments  which  aim  to  facilitate  access  to  EU  public  procurement 
markets could result in simpler and less burdensome processes for SMEs and cross-
border  bidders,  which  could  encourage  increased  participation,  although  with  some 
associated costs for CAEs and MS. 

Table 13): Summary of impacts of all options in Access  

Specific 
objectives 

Option 

ACC.NC 

ACC. 
SOFT 

ACC. 
LEGI.FAC
ILIT 

Improve cost efficiency 

Realise opportunities to 
achieve best outcomes for 
society 

Create EU wide rather than 
national markets 

0 

(≈) 

0 

(+ / ≈) 

0 

(+ / ≈) 

New training and guidance 
neutral in terms of cost-
efficiency 

Some strategic goals (incl. 
increasing SMEs and cross-
border access) can be 
achieved more effectively, but 
a voluntary measure, so 
positive impacts not 
guaranteed  

Increased cross-border 
strengthens integration of EU 
public procurement market, 
but a voluntary measure, so 
positive impacts not 
guaranteed  

(++) 

(+) 

(+ ) 

"Winning bidder" clearly 
lowers administrative burden 

Differences across MS lower 
the impact but better 

If allowed to go unchecked, 
differences in implementation 

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Specific 
objectives 

Option 

ACC. 
LEGI.ENF
ORC 

Improve cost efficiency 

Realise opportunities to 
achieve best outcomes for 
society 

Create EU wide rather than 
national markets 

improving cost efficiency and 
motivates more firms to 
participate. Costs of other 
measures depend on choices 
made by individual MS/CAEs 

adaptation to local 
specificities 

and different policy choices 
across MS could generate lack 
of convergence in the EU, 
thereby negating some of the 
improvements to cross border 

(-) 

(+) 

(+) 

Proposed obligatory measures 
expensive and 
disproportionate at least in the 
short term 

Some strategic goals (incl. 
increasing SMEs and cross-
border access) could be 
achieved more effectively via 
coercive measures 

Increased cross-border 
strengthens integration of EU 
public procurement market 

5.5. 

Governance 

5.5.1. 

Impacts of GOV.NC option 

The consequences of pursuing a "no change" policy are discussed in section 2.4). 

5.5.2. 

Impacts of GOV.SOFT option 

Under  this  option,  the  Commission  could  initiate  an  informal  process  of  mapping 
national  institutional  arrangements  for  public  procurement  administration,  and 
identify areas of recurrent difficulty in procurement policy and practice. This could 
evolve into a process of learning from 'best practice' and benchmarking and provide a 
focal point for convergence of administrative practice. 

Current  efforts  to  provide  assistance  to  national  administrative  bodies  (through 
structural  fund  assistance  to  some  countries)  with  the  correct  implementation  of 
procurement  procedures  could  be  continued  or  stepped  up.  The  benefits  of 
channelling  public  procurement  through  specialised  or  centralised  procurement 
entities  (such  as  central  purchasing  bodies  using  electronic  procurement  facilities) 
could be highlighted and promoted. 

In general, new soft law options such as the provision of assistance to administrative 
structures for monitoring and control of public procurement, as well as for ensuring 
the  integrity  of  procurement  (e.g.  training  for  the  administration  of  MS)  would  be 
expected  to  have  a  weaker  impact  than  those  described  for  GOV.LEGI.TARGET. 
There  would  be  no  formal  or  legal  basis  for  MS  to  cooperate  in  provision  of 
information  (e.g.  on  review  and  remedy  procedures),  and  no  legal  basis  for  the 
Commission  to  give  effect  to  conclusions  drawn  from  the  analysis.  For  example, 
article 81 of the 2004 Classic Directive provides the option for MS to create a single 
authority to play the above roles. However, only one MS has exercised this option. 
Some  other  MS  have  nevertheless  taken  steps  in  this  direction  with  the  creation  of 
specialised services or units within existing administrative structures. 

It  is  unlikely  that  a  consistent  approach  to  the  policing  of  compliance  with 
procurement  rules  across  EU  would  be  developed  under  this  option.  Differences  in 

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the  provision  or  severity  of  appropriate  administrative  powers  to  monitor  and 
penalise  non-respect  of  procurement  rules  could  lead  to  pronounced  differences  in 
the degree of regularity, transparency and openness of MS procurement markets. 

5.5.3. 

Impacts of GOV.LEGI.TARGET option 

Critical choice: 

Leverage achievement of economies of scale and optimal outcomes for CAE through 
the  use  of  specialised,  professional  bodies  which  aggregate  purchasing  where 
appropriate. 

Headline action(s): 

- Establish clear rules for purchases made through CPBs (inc. safe haven concept). 

5.5.3.1.  Impacts on CAEs 

Optimisation  of  resources  through  the  aggregation  of  demand  could  generate 
considerable positive effects for CAEs, such as diminished costs of procedures. For 
example running a framework agreement is associated with lower cost for CAEs than 
running  "standard"  restricted  or  negotiated  procedures87.  However,  procurement 
techniques  that  involve  aggregation  usually  take  longer  to  award  than  non-
aggregated procurement processes88. 

Greater  aggregation  could  also  enhance  the  buyer  power  of  CAEs  and  improve 
opportunities  to  pool  skills  and  expertise  (and  thus  share  the  procurement  related 
costs and risks). Procedures run through CPBs should be visible to a wide range of 
market  participants,  traceable  and  less  prone  to  conflicts  of  interest  or  subjectivity 
that  may  distort  traditional  procurement  administration.  They  could  also  facilitate 
strategic  procurement  of  new,  innovative  products  and  services.  Since  CAEs  could 
decide on a case by case basis whether to use these possibilities or not, they would 
also  see  a  certain  increase  in  the  range  of  choices  available  to  them  i.e.  their 
flexibility  would  increase,  which  could  be  of  particular  benefit  to  smaller  CAEs 
which rarely publish contracts with values above the EU thresholds. 

Achieving  more  legal  clarity  concerning  public  procurement  procedures  and  in 
particular,  clarifying  and  standardising  the  responsibilities  and  roles  falling  to  each 
party when using a CPB, should, from a CAE perspective, reduce the perceived risks 
of  litigation,  legal  assistance  costs  (as  external  counselling  would  no  longer  be 
needed)  and  diminish  the  number  of  legal  challenges.  This  could  lower  overall 
transaction  costs  in  procurement.  Equally,  if  procedures  are  clarified,  CAEs  should 
be  less  inclined  to  implement  risk-averse  procurement  practices  (that  e.g.  stifle 
innovation) which could be resulting in sub-optimal procurement outcomes. 

87 

88 

The  costs  per  procedure  for  CAEs  are  €5,400  in  the  case  of  a  framework  agreement,  whereas  it  is 
€9,000 for the restricted and €5,800 for the negotiated procedures, although the framework contracts are 
still  slightly  more  expensive  for  CAEs  than  the  open  procedure,  which  typically  costs  €5,100  per 
transaction; for more details see: section 8.8.4. 
66 calendar days in case of framework agreements and joint purchasing, compared with an average of 
58 day for all procurement or 53 days for non-framework contracts; see: section 8.7.4.1. 

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5.5.3.2.  Impacts for businesses (including SMEs) 

Aggregation  of  demand  could  have  some  negative  impacts  on  transparency  and 
opportunities for competition: as contracts are aggregated (i.e. over time and in value 
terms), the publication of notices would become less frequent but their value would 
become  higher.  For  firms  this  could  make  access  to  business  opportunities  more 
difficult. In particular, SMEs might be threatened as the typical contract value rises. 

Aggregation  also  intensifies  the  risks  of  weakening  competition  (e.g.  reissuing 
consecutive  frameworks  might  favour  larger  incumbents89).  To  remedy  the  above, 
tools  such  as  the  Dynamic  Purchasing  Systems  (hereafter:  DPS)  could  be  used, 
offering  an  alternative  that  combines  the  benefits  of  aggregation  with  open 
competition between suppliers. 

Aggregation  of  demand  (e.g.  through  framework  contracts)  is  expected  to  lower 
procedural costs for firms90. The use of CPBs and framework agreements could also 
offer suppliers more scope for economies of scale which could potentially reduce the 
prices offered to CAEs. More clarity with regards to definitions would undoubtedly 
be welcomed by firms, potentially allowing litigation and legal assistance costs to be 
scaled down. 

5.5.3.3.  Impacts on Member States 

Better  harnessing  of  scale  benefits  through  aggregation91  could  deliver  significant 
advantages  and  budgetary  savings92.  However,  national  authorities  should  be 
attentive  to  the  potential  for  greater  market  aggregation  to  undermine  competition 
between  suppliers.  These  risks  could  be  mitigated  by  clearer  rules  and  safeguards, 
and  by  giving  CAEs  alternatives  to  framework  agreements.  Member  States  could 
consider a range of CPB models, adapted to their circumstances and needs – this may 
mean the creation of more than one CPB, to allow vertical procurement (e.g. medical 
and  health  related  purchases)  as  well  as  horizontal  (national,  regional  or  local). 
Aggregation of demand could offer more scope for economies of scale which could 
potentially be passed on as reduced prices to the administration. Finally, MS could 
gain more leverage in achieving strategic goals in public procurement93 . 

5.5.3.4.  Impacts on the Internal Market 

As  mentioned  above,  aggregation  of  demand  could  increase  the  typical  value  of 
contracts,  thereby  attracting  increased  attention  from  potential  suppliers  in  other 
jurisdictions.  Clarifying  the  rules  concerning  cross-border  cooperation  between 
contracting  authorities  from  different  MS  could  have  positive 
impacts  on 
convergence  between  EU  procurement  markets.  Aggregation  of  demand  can  also 

89 
90 
91 

92 
93 

Based on 130 interviews with firms frequently active in public procurement, PwC study, page 115. 
See: section 8.8.4. 
Note,  CPBs  are  often  users  of  e-procurement,  leading  to  opportunities  for  synergy  with  the  actions 
discussed under PRO.LEGI.FLEXIB. 
See: section 8.7.4. 
Aggregation  of  demand  can  be  seen  as  a  tool  that  facilitates  the  achievement  of  strategic  goals  in 
procurement  -  CPBs  are  more  qualified  and  experienced  purchasers  and  therefore  are  assumed  to  be 
capable  of  conducting  more  far-reaching  and  complex  procedures  that  may  be  necessary  to  achieve 
societal goals (e.g. innovation, social aspects). 

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facilitate the achievement of strategic goals in public procurement - CPBs are better 
resourced to implement complex or sophisticated procurement policies.  

5.5.3.5.  Summary of stakeholders views on this option 

The  GP  replies  lead  to  a  conclusion  that  stakeholders  are  in  general  in  favour  of  a 
stronger  and  more  generalised  aggregation  of  demand.  Many  respondents  consider 
that  there  are  various  obstacles  to  an  effective  aggregation  of  demand  and  that  the 
current  public  procurement  legal  framework  does  not  provide  sufficient  tools  to 
overcome  them.  Nearly  all  stakeholders  believe  that  the  aggregation  of  demand 
implies  a  certain  amount  of  risk  for  competition  and  may  hinder  SME  access  to 
public contracts. They also agree on the fact that some areas are more convenient for 
aggregation of demand than others. 

5.5.3.6.  Impacts on administrative burden and simplification 

Option GOV.LEGI.TARGET seeks to optimise the use of resources, in particular by 
the aggregation of demand. This has important potential in simplifying procurement 
procedures as less professional public purchasers could delegate the buying functions 
to  specialised  bodies  (CPBs).  As  far  as  firms  are  concerned,  centralised  demand 
might  also  mean  less  frequent  bidding  (for  higher  value  contracts)  that  could 
ultimately mean that firms spend less time on meeting procedural requirements. Less 
paperwork would also mean less administrative burden.  

Finally, central purchasers are often the front-runners in using e-Procurement tools – 
as  a  result  the  simplification  and  savings  expected  from  electronic  methods  of 
procuring  would  be  relevant  also  for  aggregated  purchases  but  with  (potentially) 
more significant positive impacts achieved through the economies of scale. 

5.5.4. 

Impacts of GOV.LEGI.ENHANC option 

Critical choice: 

Oblige  MS  to  identify  a  national  authority  in  charge  of  implementation,  control  & 
monitoring of public procurement which reports annually on performance. 

Headline action(s): 

- Obligatory designation of central national oversight body by Member States, with 
clear obligations on monitoring, enforcement and reporting. 

5.5.4.1.  Impacts on CAEs  

CAEs  (especially  larger  entities)  would  be  subject  to  monitoring  and  reporting 
obligations  from  the  national  designated  body  or  intermediary  agencies  at  national 
level.  This  would  entail  some  additional  burden  for  CAEs  in  the  form  of  keeping 
records and providing them (in the appropriate format) to central oversight bodies or 
inspectors and general reporting. Clearer (and possibly more consistent) monitoring 
and controls would on the other hand increase the legal certainty for CAEs, as these 
would serve as  tools for the detection and  early resolution or problems  before  they 
become litigation issues. 

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Clearer  and  more  authoritative  guidance,  plus  greater  provision  of  the  appropriate 
professional support would increase legal certainty as CAEs would be able to obtain 
clarification  on  scope,  procedures,  etc.  As  a  consequence  the  number  of  litigations 
would  be  reduced,  the  time  taken  to  run  a  procedure  could  be  shortened  and 
ultimately this would lead to increased cost-efficiency. Moreover, the possibility of 
regular and systematic training of personnel and sharing of best practices would lead 
to  improved  administrative  capacity  building,  more  legal  certainty  and  increased 
efficiency.  

5.5.4.2.  Impacts on businesses (including SMEs) 

More professional procurement and stronger anticorruption measures would increase 
transparency,  legal  certainty  and  competition.  Failure  to  publicise  and  administer 
public procurement procedures implies lost business opportunities and may result in 
costly  litigation  for  suppliers.  The  (potentially)  high  level  of  corruption  in  some 
national markets/sectors could be distorting competition and denying opportunities to 
competitive  suppliers.  Efforts  to  enhance  the  quality  and  professionalism  of  public 
procurement  administration  would  reduce  friction,  complexity  and  cost,  increase 
legal certainty and confidence in the system. The supply side of the market would be 
the first beneficiary of these improvements in the operating environment. 

5.5.4.3.  Impacts on Member States  

Having  in  place  a  national  body  with  responsibility  for  monitoring  and  strategic 
oversight  of  public  procurement  would  provide  a  source  of  feedback  on  the 
functioning  of  the  policy  at  national  level,  allowing  for  rapid  identification  of 
systemic problems. This would increase the opportunity for timely remedial actions 
by  means  of  guidance  or  even  legislative  changes.  This  system  could,  within  a 
relatively short time-frame, be expected to generate improvements in terms of overall 
management  of  public  procurement  expenditure  –  at  least  through  the  principal 
spending agencies and departments. 

Some  Member  States  would  have  to  make  the  necessary  legal  and  administrative 
arrangements  to  designate  a  single  body  in  charge  with  public  procurement 
implementation and control. This process could involve some start-up cost to create 
or  adapt  the  mandate  of  existing  entities  and  resource  them.  The  monitoring  and 
control powers could be assigned to an already existing body94 which would act as a 
single  contact  point  at  national  level.  In  this  case  the  impacts  in  terms  of  cost  and 
complexity should be limited. However, in the case where Member States decide to 
create a completely new body, this could generate additional cost95. 

Some  Member  States  have  already  established  knowledge  centres,  or  provide  the 
services  of  a  knowledge  centre  through  another  body  in  charge  of  public 
procurement meaning that these Member States would not incur additional cost (of 

94 

95 

The monitoring and implementation of EU and national procurement rules is currently scattered across 
different institutions or different departments/offices of the same institution which are not necessarily 
co-ordinated.  
A  yearly  labour  cost  of  €272,656  was  estimated  for  every  10  people,  by  multiplying  the  average 
monthly  labour  cost  of  €  2,272.13,  (calculated  as  average  Eurostat  cost  of  labour  in  the  27  MS  for 
2006). 

EN 

82 

   EN 

 
                                                 
labour)  in  setting  up  any  such  centres.  However  for  those  Member  States  which 
would have to create new knowledge centres this could generate additional costs96. In 
small Member States such as Ireland or the Netherlands agencies carrying out these 
tasks have around 25 staff of all grades. 

Clear rules at national level on anti-corruption, anti-fraud, and conflict of interest or 
professional  misconduct  would  increase  confidence  in  the  system  and  allow  for 
better enforcement of the rules. This should result in a more attractive environment 
for investments in Member States and increased transparency and competition. 

This  option  could  be  considered  to  stray  into  areas  previously  not  covered  due  to 
subsidiarity concerns. However, the evaluation has shown that Member States do not 
consistently  monitor  and  control  public  procurement  policy.  This  is  a  significant 
impediment not only to the correct implementation of provisions stemming from the 
EU Directives which is a major source of cost and uncertainty in itself. The absence 
of  effective  national  arrangements  also  undermines  the  capacity  of  national 
administrations  to  effectively  account  for  and  manage  overall  public  procurement 
expenditure. Therefore, there is, in addition to the case for enhancing control of the 
implementation of EU rules, a strong self-interest for Member States to step up the 
quality of their public procurement administration.  

5.5.4.4.  Impacts on the Internal Market  

The  advantage  of  a  single  central  counterpart  in  each  Member  States  would  be  in 
having first hand and timely information particularly in relation to different problems 
affecting  the  implementation  of  public  procurement  law.  This  would  allow 
immediate feedback  on the  functioning of the policy; identification of the potential 
weak points in national legislation as well in EU legislation; and a subsequent timely 
pro-active approach in solving such issues (through guidance, soft law, etc).  

5.5.4.5.  Summary of stakeholders views on this option 

Whilst  the  GP  consultation  did  not  ask  any  explicit  questions  about  national 
administrative capacity, there is a general view in support of further steps to increase 
the professionalisation of public procurement. In general, stakeholders are against the 
introduction of criminal sanctions to address certain violations of public procurement 
rules and feel that Member States should be left to determine any detailed measures 
or additional instruments to tackle organised crime in public procurement. 

5.5.4.6.  Impacts on administrative burden and simplification 

Increasing  the  controls  and  monitoring  conducted  by  Member  States,  as  suggested 
under  this  option,  would  probably  lead  to  an  increase  in  information  obligations, 
which would affect the cost at national and CAE level. The exact costs would depend 
on  the  individual  arrangements  put  in  place  compared  to  the  existing  situation.  In 
some  instances  costs  could  be  reduced  as  tasks  which  are  currently  spread  over 
several departments and reports are centralised into one and made more efficient. In 
others, where less reporting occurs at present, costs would increase.  

96 

A yearly labour cost of €81,796 was estimated for every 3 people, by multiplying the average monthly 
labour cost of € 2,272.13, (calculated as average Eurostat cost of labour in the 27 MS for 2006). 

EN 

83 

   EN 

 
                                                 
However, the new structure of public procurement administration could be the source 
of  simplification,  as  various  functions  which  are  currently  performed  by  many 
organisations in some Member States would be more clearly allocated and possibly 
brought together. 

5.5.5. 

Summary of impacts of options in Governance against specific objectives 

Whilst choices relating to greater aggregation have overall positive benefits, there are 
(GOV.LEGI.TARGET).  The  option 
some  concerns  about  market  closure 
GOV.LEGI.ENHANC considers possible actions to improve the control, monitoring 
and  application  of  public  procurement  rules  at  both  national  and  EU  level.  By 
considering  actions  to  introduce  similar  conditions  and  architecture  in  all  MS,  it 
should  improve  the  effectiveness  of  these  functions  at  both  national  and  EU  level. 
Both  the  LEGI  options  should  generate  some  improvements  to  legal  certainty  and 
effectiveness.  In  some  instances,  similar  actions  could  be  taken  under  the  option 
GOV.SOFT but adoption would be voluntary and might not lead to a desired level of 
convergent and consistent procurement oversight and professionalisation. However, 
soft  law  action  could  be  used  to  complement  any  legislative  change,  providing 
further detail/examples and guidance and if appropriate to support/provide training. 

Table 14): Summary of impacts of all options in Governance  

Specific 
objectives 

Option 

GOV.NC 

GOV. 
SOFT 

GOV. 
LEGI. 
TARGET 

GOV. 
LEGI. 
ENHANC 

Improve cost efficiency 

Realise opportunities to 
achieve best outcomes for 
society 

Create EU wide rather than 
national markets 

0 

(+ / ≈) 

0 

(+ / ≈) 

0 

(+ / ≈) 

Improvements due to new 
guidance, but take-up 
voluntary 

Improvements due to new 
guidance, but take-up 
voluntary 

Improvements due to new 
guidance, but take-up 
voluntary 

(++)  

(+) 

(+) 

Increases legal certainty and 
reduces costs through 
economies of scale and lower 
error rates 

CPBs are more professional 
and aggregation may permit 
greater strategic buying power 

Greater transparency and ease 
of access for firms wishing to 
find business 

(+)  

(+) 

(+ +) 

Increases legal certainty and 
reduces likelihood of error 
through tighter controls 

Optimal choices are more 
likely to be made  

More uniform and EU wide 
monitoring & control 
increases cross border 
convergence 

5.6. 

Regulatory form 

Many of the problems identified for this Impact Assessment relate to instances where 
the current legislation has been identified as too complex. This complexity may arise 
for a range of reasons, including the existence of a multiplicity of reference sources. 
Many  of  the  legal  options  identified  above  would  aim  to  simplify  the  current 

EN 

84 

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legislation  whilst  reflecting  any  new  jurisprudence  or  information/experience. 
Depending on what, if any, legislative proposals  are presented, a transposition date 
would  be  set  to  ensure  that  MS  have  sufficient  time  to  transpose  and  create  new 
legislation. As such, when developing such proposals, consideration would be given 
to two key issues: 

– 

– 

The  need  to  maintain  two  separate  Directives  i.e.  to  keep  the  current  Classic 
and Utilities Directive approach; and 

The use of implementing / comitology measures to permit a later adoption of 
more technical or detailed rules which it may not yet be possible to specify. For 
example,  this  could  include,  if  appropriate,  regulations  relating  to  new 
standards  for  e-procurement;  methodologies  and  data  sources  for  measuring 
costs related to production and/or life-cycle; methodologies and indicators for 
future monitoring. 

The  suggestions  on  the  exact  legal  form  could  only  be  taken  once  any  initial 
proposals  have  been  fully  drafted  and  would  only  be  confirmed  at  adoption, 
following detailed discussion and consultation with MS. The decision about whether 
to maintain two separate Directives would be informed by a detailed comparison of 
the final proposals, assessing how different/similar their content is. Due to the nature 
of  the  reforms  being  discussed  and  the  problems  identified,  close  consideration 
would  be  paid  to  issues  affecting  clarity  and  simplicity,  coherence  with  other  EU 
policy and monitoring and control arrangements.  

The  Directives  provide  a  general  framework  for  public  procurement  and  to-date, 
other  sector-specific  legislation  has  been  used  to  set  out  particular  strategic  goals. 
Careful consideration would need to be given as to whether this approach would be 
maintained or, particularly if mandatory strategic obligations were introduced, such 
sectoral  objectives  would  be  included  in  or  cross-referenced  by  EU  public 
procurement  legislation.  This  approach  of  tackling  specific  market  failures  or 
opportunities for strategic procurement in a targeted way (e.g. energy efficient public 
purchasing  or  clean  cars)  may  remain  a  valid  approach  –  subject  to  a  coherent 
application  of  these  sectoral  solutions  in  as  great  accordance  with  the  general 
principles and framework for public procurement as possible. 

If  it  is  decided  to  provide  any  additional  soft  law  measures  such  as  guidance  or 
training,  these  would  be  developed  and  discussed  with  relevant  stakeholders 
including through the various MS committees. 

6. 

COMPARING THE OPTIONS 

Having  presented  the  impacts  on  each  of  the  five  groups  of  problems  (i.e. 
administrative  organisation,  scope,  procedures,  strategic  public  procurement  and 
access), the following table compares the various options by assessing their overall 
effectiveness, efficiency and coherence with the objectives. 

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Table 15): Comparison of retrained options  

Specific 
objectives 

Effectiveness - extent to 
which options achieve the 
specific objectives 

Efficiency - the extent to 
which objectives can be 
achieved for a given level of 
resources / at least cost 
(cost-effectiveness)  

Coherence – the extent to 
which options are coherent 
with the overarching 
objectives of the EU policy 

Policy  

options  

All NC 
options 

SCO.LEGI.
TARGET 

SCO.LEGI.
REDUCE 

PRO.LEGI.
DESIGN 

PRO.LEGI.
FLEXIB 

STR.LEGI.
FACILIT 

0 

0 

(+ / ≈) 

(+ / ≈)  

0 

(+) 

Benefits are expected to 
outweigh the cost of 
implementing new measures 

Improves on but still 
consistent with current 
Internal Market policy 

Expected gains in cost 
effectiveness, are 
counterbalanced by neutral 
effectiveness in achieving 
best outcomes for society and 
potential losses in creating EU 
public procurement market  

(+ ) 

(+) 

(-) 

May be cost efficient for 
individual procedures, but 
global cost-efficiency affected 
by possible international 
consequences.  

Doesn’t require new systems / 
resources to be put in place 

Contradicts Internal Market 
policy by reducing the size of 
EU-wide market and could 
cause problems with 
international agreements 

(+) 

(+ +) 

(+/ ≈) 

Effectiveness from very 
positive (in terms of cost-
efficiency) to neutral in 
creating EU wide market, 
hence overall slight positive  

Certain tools will increase the 
economies of scale; benefits 
are expected to outweigh the 
cost of implementing new 
measures 

Improves on but still 
consistent with current 
Internal Market policy 

(+ +) 

(+) 

(+) 

Effective in achieving all 
three specific objectives  

Significant gains expected 
compared to the resources 
invested 

Improves ability to achieve 
Internal Market policy whilst 
increasing choice and 
modernising procedures 

(+)  

(+ ) 

(+/ ≈)  

Effective in achieving best 
outcomes for society, but 
marginal effectiveness in 
terms of cost-efficiency and 
slightly negative in creating 
EU wide market, thus the 
overall score is slightly 
positive 

Respects subsidiarity and 
proportionality while allowing 
CAE / MS to make choices 
that best suit their objectives 
and resources 

Improves on, but still 
consistent with current 
Internal Market policy whilst 
respecting subsidiarity and 
proportionality principles 

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Specific 
objectives 

Effectiveness - extent to 
which options achieve the 
specific objectives 

Efficiency - the extent to 
which objectives can be 
achieved for a given level of 
resources / at least cost 
(cost-effectiveness)  

Coherence – the extent to 
which options are coherent 
with the overarching 
objectives of the EU policy 

Policy  

options  

STR.LEGI.
ENFORC 

ACC. 
SOFT 

ACC.LEGI.
FACILIT 

(+) 

(-) 

(-) 

Slightly positive effectiveness 
(mainly driven by positive 
impacts in achieving best 
outcomes for society, but 
counter-balanced by low cost-
effectiveness) 

Mandatory solutions would be 
burdensome and costly at this 
point in time (lack of EU-
wide data, methodologies and 
standards tested in practice) 

Depends on how trade-offs 
between wide set of policy 
objectives which may 
sometimes conflict are 
managed 

(+ / ≈) 

(≈) 

(+ / ≈) 

Guidance has been issued and 
has not brought the expected 
results 

Low costs, low impacts 

Consistent with current 
Internal Market policy, 
unlikely to improve the 
situation  

(+/ ≈)  

(+) 

(+) 

Effective in achieving best 
outcomes for society and cost-
effectiveness, but marginal / 
slightly negative effectiveness 
in terms of creating EU wide 
market, thus the overall score 
is only slightly positive 

Respects subsidiarity and 
proportionality while allowing 
CAE / MS to make choices 
that best suit their objectives 
and resources 

Improves on, but still 
consistent with current 
Internal Market policy 

ACC.LEGI.
ENFORC 

(+) 

(-) 

(+) 

Slightly positive effectiveness 
(mainly driven by positive 
impacts in achieving best 
outcomes for society, but 
counter-balanced by low cost-
effectiveness) 

Mandatory solutions would be 
burdensome and costly at this 
point in time (e.g. 
construction of new systems, 
lack of EU-wide data, 
methodologies and standards 
tested in practice) 

Supports both Internal Market 
policy and wider EU2020 
goals 

GOV. 
SOFT 

(+ / ≈) 

(+ / ≈) 

(≈) 

Improvements due to new 
guidance, but take-up 
voluntary 

Small investment but the take 
up would be voluntary (and 
track record suggests that 
little is likely to change)  

Unlikely to generate large 
changes 

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Policy  

options  

GOV.LEGI.
TARGET 

Specific 
objectives 

Effectiveness - extent to 
which options achieve the 
specific objectives 

Efficiency - the extent to 
which objectives can be 
achieved for a given level of 
resources / at least cost 
(cost-effectiveness)  

Coherence – the extent to 
which options are coherent 
with the overarching 
objectives of the EU policy 

(+) 

(+) 

(+ / ≈) 

Potential economies of scale 
and increased 
professionalisation should 
improve pp outcomes 

Most MS already have CPBs. 
Mandatory use of e-
procurement should generate 
cost efficiency; Certain tools 
will increase the economies of 
scale 

Aggregation/centralisation 
may lead to economies of 
scale and there is potential for 
increased strategic 
procurement, but safeguards 
necessary to prevent SMEs 
being excluded 

GOV.LEGI.
ENHANC 

(+ +)  

(+) 

(+) 

Positive impacts in terms of 
all strategic objectives 

Greater coordination across 
MS strengthens application of 
Internal Market policy 

Possible increased monitoring 
costs but no major 
establishment costs expected 
as functions currently 
conducted (in most MS); 
savings through coordination 
and improved monitoring  

The  evidence  gathered  through  the  evaluation  and  the  present  Impact  Assessment 
suggests that action is warranted.  

Clearly there are certain tradeoffs between the different solutions, particularly across 
the different problem areas. The most obvious examples are in the options relating to 
procedures  and  governance  or  strategic  procurement  where  cost-efficiencies  and 
benefits realised through improvements to procedures can be used to meet the costs 
of certain actions. E-procurement and its inherent tracking and monitoring could off-
set costs related to new monitoring requirements, particularly in governance but also 
in addressing issues affecting access and strategic procurement. As mentioned in the 
impacts section, the strategic costs of adapting to new methodologies etc will reduce 
over time and increasing the use of concepts such also life cycle costing allow more 
attention to be paid to the wider cost base and contribute to achieving other policy 
goals, particularly those identified in the EU2020 strategy. 

6.1. 

Preferred solution 

Based  on  the  analysis  presented  in  this  report,  a  preferred  solution  based  on  a 
combination  of  nine  of  the  options  discussed  has  been  identified  (summarised  in 
Table  16).  However,  it  should  be  noted  that  this  package  of  preferred  options  only 
reflects the opinion of DG MARKT Services and does not prejudge the final form of 
any decision to be taken by the wider Commission Services.  

6.1.1. 

Scope 

The radical approach to redefinition of scope would be more simple and effective in 
reducing the compliance costs resulting from the application of Directive thresholds 

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to small-value contracts or to contracts operated by small and less procurement savvy 
local  purchasing  bodies.  However,  it  would  come  at  a  heavy  price  in  terms  of 
reduced transparency  and weaker disciplines on public procurement across the  EU. 
The  evaluation  confirms  the  expectation  that  transparency  translates  into  increased 
competition  and  delivers  price  and  quality  savings.  Small  firms  are  also  relatively 
more  active  and  successful  in  competing  for  contracts  for  values  close  to  the 
Directive  thresholds.  Therefore  radically  reducing  the  scope  of  the  Directives 
through  significant  increases  to  the  thresholds  (or  the  exclusion  of  important 
populations  of  purchasers  such  as  sub-central  authorities)  would  have  significant 
unintended  consequences.  Increasing  the  thresholds  would  also  have  international 
consequences  as  it  would  trigger  a  breach  of  the  GPA  and  lead  to  the  closure  of 
(parts of) certain 3rd country markets. 

Consequently,  a  targeted  approach  to  any  redefinition  of  the  Directives'  scope  is 
preferred (SCO.LEGI.TARGET). This would entail for example, exclusion of all but 
the  very  largest  value  contracts  for  social  services.  The  special  regulatory 
arrangements operated by Member States in respect of social services or services to 
the  person,  mean  that  these  markets  are  characterised  by  limited  tradability. 
Conversely,  the  impact  assessment  concludes  that  targeted  actions  to  improve  the 
definition  of  scope  would  also  permit  the  elimination  of  grey  areas  such  as  the 
treatment of many forms of cooperative purchasing arrangements (public-public). In 
sum,  this  impact  assessment  concludes  in  favour  of  the  targeted  approach  to  scope 
redefinition. 

6.1.2.  Procedures 

It is necessary to correct certain shortcomings in the current legislation if the latent 
potential  of  certain  procedures  (DPS,  competitive  dialogue)  is  to  be  realised.  Such 
changes would allow CAEs to tailor the organisation of the purchasing procedure to 
the characteristics of the purchase. More widespread use of e-procurement holds out 
the  prospect  of  significant  and  enduring  gains  in  administrative  efficiency  and  an 
intensification of transparency and competition driven savings – which far exceed the 
switchover  costs  for  CAEs  and  suppliers.  Therefore,  it  is  deemed  desirable  to 
proceed with the changes envisaged under the option PRO.LEGI.DESIGN. 

The cost-benefit analysis suggests that changes to expand the freedom for CAEs to 
choose  between  procedural  options  and  alleviate  publication  requirements  are  also 
worth pursuing. Removal of the presumption in favour of the open procedure would 
allow  CAEs  to  make  greater  use  of  other  possibilities  including  negotiation  (as 
proposed under option PRO.LEGI.FLEXIB). 

Hence it is suggested that both the legislative options proposed to tackle issues where 
the  current  procedures  are  found  to  be  disproportionate  and  inflexible  be  taken 
forward. 

6.1.3. 

Strategic procurement 

Experience  from  different  Member  States  and  markets  suggests  that  strategic 
procurement  can  result  in  the  selection  of  superior  solutions  in  specific  instances 
without  undermining  the  provision  of  fair  or  effective  award  procedures.  However, 
these approaches are still in their infancy. The jury is still  out on  whether  strategic 

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procurement  can have  a decisive impact  in  supporting  the  general  dissemination of 
superior technologies or solutions. 

It is therefore considered inappropriate and excessively risky at this point in time to 
require,  through  changes  to  EU  legislation,  contracting  authorities  to  allocate  some 
part  of  their  budget  to  purchases  meeting  certain  criteria.  Member  States  have 
already  established  national  action  plans  (NAP)  in  order  to  set  (generally  non-
obligatory)  targets  for  increased  levels  of  green  public  procurement  within  certain 
groups of products. These NAPs have not yet been evaluated in most MS and it is not 
clear  whether  they  are  having  a  significant  impact  on  contracting  authorities' 
behaviour. Establishing mandatory quotas within the public procurement legislation 
would  seem  premature  while  the  effectiveness  of  voluntary  measures  has  not  yet 
been assessed. However there would be no reason not to advance such strategic goals 
via sector specific legislation as different markets mature. 

Instead, it is preferred to pursue the option of allowing contracting authorities to take 
account  of  the  performance  of  proposals  in  respect  of  a  number  of  considerations 
directly  linked  to  the  production  process  and  to  provide  additional  procedures  to 
support  innovative  procurement  (STR.LEGI.FACILIT).  The  conclusion  of  the 
impact assessment is that there are significant risks associated with this approach – 
relating  in  particular  to  a  more  complex  operating  environment  for  CAEs  and 
suppliers.  There  is  also  a  risk  of  market  fragmentation  if  implementation  methods 
(measurement  and  weighting  systems,  labels  and  certificates)  are  developed  in  an 
inconsistent  manner  across  the  single  market.  However,  the  benefits  on  offer  are 
worth striving for. Policy - both legislative and non-legislative (guidance, relating to 
the  legislative  changes  introduced)  -  should  invest  heavily  in  measures  to  mitigate 
the  risks  for  contracting  authorities,  suppliers  and  the  single  market  that  this 
approach entails. 

6.1.4.  Access 

to  participation 

The  impact  assessment  analysis  strongly  supports  additional  actions  to  remove 
administrative  barriers 
in  public  procurement  markets 
(ACC.LEGI.FACILIT).  This  should  deliver  benefits  across  the  full  spectrum  of 
impacts  –  particularly  for  CAEs  and  suppliers  in  the  form  of  lower  administrative 
burden.  Some  of  the  actions  (e.g.  European  procurement  passport)  could  involve 
building the capacity to retrieve company data and issue approvals. This cost would 
fall on national administrations or delegated bodies rather than individual purchasers.  

The  impact  assessment  argues  against  the  imposition  of  quotas  for  a  proportion  of 
contracts/spend to be allocated to SMEs and other prescriptive measures to increase 
access  to  public  procurement  markets  (ACC.LEGI.ENFORC).  SMEs  are  relatively 
successful in competing for EU regulated contracts and should be incited to remain 
competitive  on  their  own  merits:  the  focus  should  be  on  removing  features  of  the 
legal or administrative environment which hamper their effective participation. The 
mandatory imposition of lots for all contracts above EU thresholds risks imposing an 
artificial structuring of contracts on CAEs. This could compromise the quality of cost 
of the procurement outcome. However, whilst the impact assessment concludes that 
this approach could not be imposed on a blanket basis, an increased use of lots under 
certain  circumstances  is  foreseen  under  ACC.LEGI.FACILIT  option,  which  should 
lead to improved access and participation by SMEs. 

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The  impact  assessment  concludes  in  favour  of  facilitating  access  and  removing 
access  barriers.  Such  actions  could  usefully  be  supported  by  appropriate  soft  law 
measures  (ACC.SOFT).  It  rejects  the  option  of  imposing  outcomes  in  terms  of 
market share to be reserved to certain categories of actor. 

6.1.5.  Governance 

The  cost-benefit  analysis  supports  the  inclusion  in  the  Directives  of  a  clear  set  of 
provisions  regulating  aggregation,  generally  via  the  activities  and  organisation  of 
CPBs.  These  structures  are  emerging  as  key  hubs  in  the  European  public 
procurement landscape. Procedures run through these structures should be visible to 
a wide range of market participants, traceable and less prone to conflicts of interest 
or  subjectivity  that  may  distort  traditional  procurement  administration.  The  most 
notable  drawback  of  centralisation  is  the  potential  impact  on  the  supplier  base  if 
contracts are too large for SMEs to bid for, or if they foreclose markets for excessive 
periods.  These  risks  need  to  be  mitigated  but  do  not  overturn  the  case  in  favour  of 
this option (GOV.LEGI.TARGET). 

The analysis also examined the need to identify a national level counterpart to assist 
the European Commission in ensuring the sound implementation of EU legislation, 
and  to  assist  with  the  development  of  a  coherent  response  to  new  procurement 
challenges  (development  of  common  approaches  for  strategic  procurement, 
consistent  design  of  e-procurement  models).  Such  structures  could  also  provide  a 
focal  point  for  national  efforts  to  exercise  strategic  or  central  control  over 
excessively fragmented public purchasing administration. Many Member States have 
recognised this and are moving in this direction themselves (e.g. UK Cabinet Office 
efforts  to  drive  efficiency  in  UK  public  procurement).  This  should  reduce  political 
resistance 
option 
(GOV.LEGI.ENHANC),  the  impact  assessment  recognised  that  such  action  would 
require some element of institution building within some Member States, as well as 
investment  in  monitoring  and  reporting  systems.  In  broad  terms,  the  benefits  of 
provided by such oversight bodies through improved compliance and more efficient 
procurement are expected to outweigh the costs of creating and running them. 

direction.  However,  when 

proposing 

this 

this 

to 

The  impact  assessment  therefore  concludes  in  favour  of  actions  to  strengthen 
administrative capacity by regulating CPBs, and to require Member States to identify 
a national authority with responsibility for oversight of aggregate national purchasing 
and  implementation  of  EU  legislation.  Any  legislative  actions  proposed  should  be 
supported  and  complemented  by  soft  law  measures  to  provide  further  detail, 
guidance and if appropriate, training. 

6.2. 

Conclusions 

Taken  together  the  proposed  package  of  solutions  should  address  many  of  the 
problems  identified,  reducing  the  cost  of  conducting  public  procurement  and 
supporting  the  use  of  EU  rules  to  achieve  wider  political  goals,  whilst  still 
safeguarding fair and open competition. Whilst such actions are not designed to force 
a greater integration of public procurement markets, they should remove many of the 
existing barriers and improve the way these markets function. The proposed package 
consists  of  seven  legislative  options  and  two  soft  law  options  which  have  been 
identified  on  the  basis  of  their  ability  to  address  the  problems  identified.  Whilst 

EN 

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alternative  packages  could  be  considered,  they  would  be  composed  of  options  that 
have  been  shown  to  be  less  effective  than  the  proposed  selection.  The  package 
proposed  should  optimise  the  synergies  between  the  different  solutions  allowing 
savings  due  to  one  type  of  action  to  neutralise  related  costs  due  to  another  (e.g. 
possible increased information requirements under the strategic procurement actions 
should  be  partly  neutralised  by  the  reductions  relating  to  the  improved  design  of 
procurement procedures).  

Many  of  the  measures  are  designed  to  simplify  and  streamline  the  current 
environment  and  increase  its  cost-effectiveness.  Where  the  checks  and  balances 
required to ensure the proper functioning of the Internal Market could run counter to 
this simplification, effort has been taken to reduce their complexity.  

Table 16): Summary table of preferred options (marked in grey) 

Options 

Problem groups 

No change 
options 
(NC) 

Soft law 
options 
(SOFT) 

Legislative – generally 
within current framework 
(LEGI._) 

Legislative – new or 
significant change 
(LEGI._) 

Scope (SCO) 

SCO. NC 

Procedures (PRO) 

PRO. NC 

Strategic (STR) 

STR. NC 

Access (ACC) 

ACC. NC 

Governance 
(GOV) 

GOV. NC 

SCO. 
SOFT 
PRO. 
SOFT 

STR. 
SOFT 

ACC. 
SOFT 
GOV. 
SOFT 

SCO.LEGI.TARGET (clarify 
boundaries) 
PRO.LEGI.DESIGN(improve 
definitions and design) 

STR.LEGI.FACILIT 
(facilitate strategic public 
procurement) 
ACC.LEGI.FACILIT 
(facilitate access) 
GOV.LEGI.TARGET 
(optimise the use of 
resources). 

SCO.LEGI.REDUCE 
(significant re-scoping) 
PRO.LEGI.FLEXIB 
(Increase choice, increase e-
procurement) 
STR.LEGI.ENFORC 
(enforce strategic public 
procurement) 
ACC.LEGI.ENFORC 
(enforce tools for access) 
GOV.LEGI.ENHANC 
(enhance control & 
responsibility) 

Finally, following the wider consultation of other DGs at the Commission, a proposal 
to set a target date for the adoption of the use of electronic means of communication 
for all CAEs has been put forward. This recognises the arguments presented in this 
impact  assessment  stating  that  the  market  is  currently  not  ready  for  an  immediate 
switchover, but suggests setting a deadline by which such action should be possible. 
In  so  doing,  it  builds  on  the  phased  approach  adopted  (CPBs  must  be  ready  to  use 
electronic  communication  exclusively  at  the  date  of  adoption;  the  phases  for 
electronic  notification  and  access  to  documents  are  made  mandatory  at  the  same 
point) and signals clearly to the markets and stakeholders the future direction. 

7. 

MONITORING AND EVALUATION 

There are already certain obligations on Member States to provide annual statistical 
reports which are linked to their international obligations under the GPA. The quality 
and consistency of these reports has been improving over the last few years, but these 
obligations not provide all the information that would be needed to monitor closely 
the performance of EU public procurement markets. The Services of the Commission 
generate a certain number of indicators, derived from data provided to Eurostat and 

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from data contained in the procurement notices published in OJ/TED97. However it is 
often necessary to supplement this data. 

In  the  recent  evaluation  of  the  Directives  it  was  necessary  to  conduct  a  number  of 
surveys,  studies  and  interviews  in  order  to  provide  sufficient  data  to  allow  detailed 
analysis  of  the  extent  to  which  the  legislation  was  meeting  its  objectives98. 
Additional  information  about  bidders  was  important  to  analyse  the  cross  border 
activity and access of firms by size. In particular, it has proved useful to examine the 
how  the  Directives  have  been  implemented  by  MS,  not  simply  in  terms  of 
transposition, but to see how the different administrative structure and arrangements 
for procurement below and outside the scope of the Directives had affected the way 
in which goods and services were acquired in different MS. 

Since  the  costs  of  collecting  some  of  this  information  could  involve  an  additional 
burden on CAEs, firms or Member States the detailed requirements may need to be 
investigated in more detail and combined with the data collection needs of Member 
States.  If  the  preferred  governance  solutions  were  to  be  adopted,  there  would  be 
clearer  responsibility  for  conducting  monitoring  at  Member  States  level  and 
designated  bodies  which  would  interact  with  Commission  Services  to  identify  and 
define  the  content  of  annual  performance  reports.  This  should  ensure  greater 
consistency  in  reporting  and  enable  a  clear  EU  overview  of  progress,  allowing  a 
timely  identification  of  potential  problem  areas.  Such  obligations  could  be  further 
clarified and formalised through future implementing measures. 

Areas  for  further  consideration  would  include  developing  statistics  and  monitoring 
methodologies  to  appraise  consistently  and  with  the  appropriate  periodicity  areas 
such as: 

• 

• 

• 

• 

The cost of conducting public procurement according to the EU rules, covering 
the  costs  for  both  CAEs  and  firms,  including  further  measurement  of 
administrative burdens;  

Integration and cross-border participation in procurement; 

The use and savings/costs associated with switching to e-procurement; 

The approaches, use and associated savings/costs of procedures which aim to 
integrate wider policy objectives into public procurement.  

A commitment to evaluating the impacts of any new legislation, if proposed, would 
be included in the draft text.  

97 
98 

See: sections 8.2.1 - 8.2.3. 
See: the Evaluation Report. 

EN 

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8. 

ANNEXES 

8.1. 

ANNEX 1 – Procedural issues 

8.1.1. 

Inter-service steering group 

List of Directorate Generals participating in the inter-service steering group: 

•  Directorate General Internal Market and Services,  

•  Secretariat General, 

•  Directorate General Regional Policy,  

•  Directorate General Economic and Financial Affairs, 

•  Directorate General Information Society and Media,  

•  Directorate General Environment,  

•  Directorate General for Employment, Social Affairs and Inclusion,  

•  European Commission European Anti-fraud Office (OLAF),  

•  Directorate General Competition,  

•  Directorate General Budget,  

•  Directorate General Energy,  

•  Legal Service,  

•  Directorate General Mobility and Transport,  

•  Directorate General Enterprise and Industry,  

•  Directorate General Trade,  

•  Directorate General Justice,  

•  Directorate General Home Affairs  

•  Directorate General Climate Action.  

The Group met four times:  

•  4 February 2011 

•  10 April 2011 

•  17 June 2011 

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•  26 July 2011 

The  minutes  of  meeting  on  26.07.11  (where  the  draft  Impact  Assessment  report 
circulated on 15.07.11 was discussed) are sent to the IAB in a separate document. 

8.1.2.  External expertise 

•  Adelphi,  Belmont,  PPRC  (2011),  "Strategic  use  of  public  procurement  in 
at: 
Europe", 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/str
ategic-use-public-procurement-europe_en.pdf 

available 

•  Eurobarometer  (2011),  The  awareness,  Perception  and  Impacts  of  the  Internal 

Market, 2011. 

•  Europe Economics (2006), Evaluation of Public Procurement Directives, London, 
at: 

2006. 
http://ec.europa.eu/internal_market/publicprocurement/docs/final_report_en.pdf 

Available 

•  Europe Economics (2011), Taking Stock of Utilities Procurement, 2011; available 

at: 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/ta
king-stock-utilities-procurement_en.pdf 

•  Europe Economics (2011), Estimating Benefits and Savings from the Procurement 
Directives, 
at: 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/es
timating-benefits-procurement-directives_en.pdf 

available 

2011; 

•  European  Commission  (2009b),  Public  procurement  indicators,  Brussels,  2009. 
at: 
Available 
http://ec.europa.eu/internal_market/publicprocurement/docs/indicators2009_en.pd
f 

•  GHK (2010), DG Enterprise and Industry, Evaluation of SMEs’ Access to Public 
Procurement  Markets 
at: 
http://ec.europa.eu/enterprise/dg/files/evaluation/pme_marches_publics_report_en
.pdf 

the  EU,  Brussels 

2010.  Available 

in 

•  European  Commission  (2011)  DG  Regional  Policy  Working  Document,  Main 
audit findings regarding  application of public procurement rules in MS found in 
projects  co-financed  by  ERDF  and  the  Cohesion  Fund  under  cohesion  policy, 
Brussels 2011 

•  EU Project on baseline measurement and reduction of administrative costs; Final 
Report-Measurement data and analysis as specified in the specific contracts 5&6 
on Modules 3&4 under the Framework Contract n° ENTR/ 06/61; Report on the 
Public Procurement Priority Area, March 2009 

•  PricewaterhouseCoopers,  London  Economics  and  Ecorys 

(2011),  Public 
Procurement  in  Europe  –  Procedures  and  techniques  –  A  study  on  the  cost  and 

EN 

95 

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effectiveness  of  procurement 
regulation,  London  2011;  available  at: 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/co
st-effectiveness_en.pdf 

•  PricewaterhouseCoopers,  Significant  and  Ecorys  (2009),  Collection  of  statistical 
information  on  Green  Public  Procurement  in  the  EU  Report  on  data  collection 
results, 
at: 
http://ec.europa.eu/environment/gpp/pdf/statistical_information.pdf 

Available 

•  Rambøll (2007) DG Internal Market: Improving and automating the collection of 
statistical  data  concerning  public  procurement  in  Belgium,  Denmark,  France, 
Ireland,  Latvia,  Lithuania,  Luxembourg,  the  Netherlands,  Poland,  Spain  and  the 
http://www.portal-vz.cz/Uploads/Mezinarodni-
at: 
UK, 
spoluprace/Improving-and-automatingthe-collection-of-statist 

available 

2007; 

•  Rambøll  (2011),  Cross-border  procurement  above  EU  thresholds,  May  2011; 
at: 

available 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/cr
oss-border-procurement_en.pdf 

8.1.3.  Public consultations 

8.1.3.1.  The GP on the modernisation of EU public procurement policy 

On  27  January  2011,  the  European  Commission  launched  a  public  consultation  on 
modernisation.  The  Commission  services 
received  621  contributions.  The 
consultation  document,  associated  papers,  synthesis  report  of  the  responses  and  the 
non-confidential contributions can be consulted on the Commission's website under 
the  heading  “Consultation  on  the  modernisation  of  EU  public  procurement  policy” 
(http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/consultati
ons/index_en.htm). 

8.1.3.2.  The e-procurement GP 

On  18  October  2010,  the  European  Commission  launched  a  consultation  on  the 
Green  Paper  on  expanding  the  use  of  e-Procurement  in  the  EU.  The  consultation 
contained fifteen questions. In all, 77 responses were received. These were provided 
by stakeholders in 21 MS, 12 European Organisations, 3 International Organisations 
and  1  EFTA  State  (Norway).  80%  of  the  responses  come  from  the  two  main  user 
groups of e-Procurement: public authorities (48%) and businesses (32%). 

responses 

The 
authorised 
http://ec.europa.eu/internal_market/publicprocurement/e-
procurement/consultations/index_en.htm 

publication 

for 

can 

be 

found 

at: 

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8.2. 

ANNEX 2 – Additional information related to Section 2.2. Background 

8.2.1.  Total expenditure on works, goods and services  

Table 17): Total expenditure on works, goods and services in 2005-2009 in billion € by EU MS 

Belgium 

Bulgaria 

Czech Republic 

Denmark 

Germany 

Estonia 

Ireland  

Greece 

Spain 

France 

Italy 

Cyprus 

Latvia 

Lithuania 

Luxembourg 

Hungary 

Malta  

2005 

49,75 

n/a 

20,39 

29,61 

2006

46,94

n/a

30,21

32,08

2007

48,67

4,72

32,14

33,79

2008 

51,95 

5,67 

37,54 

35,47 

2009

55,91

6,41

36,50

39,17

362,11 

375,61

399,05

419,26 

461,84

2,10 

19,79 

18,72 

2,27

22,13

20,23

126,88 

142,49

303,30 

315,63

204,49 

212,99

1,53 

2,11 

2,81 

4,16 

16,33 

0,76 

1,73

2,68

3,98

4,48

19,41

0,76

2,67

26,09

22,67

160,84

328,90

215,12

1,65

3,38

5,05

5,01

21,98

0,76

2,92 

27,80 

22,84 

2,60

27,56

26,28

164,50 

194,96

342,14 

367,27

221,49 

241,15

1,80 

3,62 

5,62 

5,41 

21,09 

0,87 

1,91

3,15

4,69

5,90

20,77

0,80

Netherlands 

123,65 

136,92

146,20

156,09 

176,85

Austria 

Poland 

Portugal 

Romania 

45,35 

39,03 

23,18 

n/a 

EN 

44,46

50,33

24,00

n/a

97 

49,45

56,66

27,10

27,18

54,81 

67,65 

29,21 

27,89 

60,89

56,43

32,17

27,72

   EN 

 
 
Slovenia 

Slovakia  

Finland 

Sweden 

2005 

4,08 

8,77 

25,27 

51,32 

2006

6,03

11,36

26,75

55,43

2007

5,22

13,98

28,89

59,08

2008 

5,80 

15,89 

31,54 

60,74 

2009

6,04

13,96

33,32

59,28

United Kingdom 

316,75 

356,90

365,40

344,89 

324,91

Total EU 27 

1 802,23 

1 945,80

2 091,63

2 164,47 

2 288,44

Source: DG MARKT estimates 

8.2.2.  The estimated value of tenders published in TED  

Table 18): The estimated value of tenders published in TED in 2005-2009 in billion € by EU MS 

Belgium 

Bulgaria 

Czech Republic 

Denmark 

Germany 

Estonia 

Ireland 

Greece 

Spain 

France 

Italy 

Cyprus 

Latvia 

Lithuania 

Luxembourg 

EN 

2005 

6,94 

n/a 

2,68 

4,60 

2006

7,65

n/a

5,86

6,49

2007

10,56

2,45

5,21

7,31

2008 

12,35 

2,96 

7,90 

6,92 

2009

13,53

4,14

7,11

8,83

36,10 

38,39

27,07

29,65 

34,14

0,79 

4,19 

9,49 

39,10 

51,44 

38,19 

0,48 

1,27 

0,74 

0,74 

0,97

5,78

11,81

41,17

62,23

44,86

0,64

2,22

1,16

0,47

98 

1,13

6,37

7,98

42,97

63,96

35,50

0,81

2,61

1,20

0,45

1,32 

4,48 

6,64 

39,28 

71,86 

36,32 

0,81 

2,21 

1,17 

0,51 

1,15

3,52

8,70

35,45

73,11

38,67

1,41

1,59

1,29

0,57

   EN 

 
 
 
Hungary 

Malta 

Netherlands 

Austria 

Poland 

Portugal 

Romania 

Slovenia 

Slovakia 

Finland 

Sweden 

2005 

6,02 

0,05 

8,23 

4,86 

18,63 

3,19 

n/a 

0,91 

2,43 

5,17 

9,41 

2006

6,14

0,09

12,44

4,31

14,24

2,97

n/a

1,56

1,36

5,10

9,62

United Kingdom 

64,21 

89,52

2007

4,57

0,11

10,19

4,55

18,13

2,90

9,12

2,26

1,97

6,39

10,24

81,19

2008 

5,45 

0,07 

11,13 

6,86 

25,95 

4,33 

10,29 

1,90 

2,41 

7,30 

11,82 

80,55 

2009

5,86

0,40

11,60

6,40

25,54

5,75

7,56

2,12

4,31

8,36

12,43

96,89

Total EU 27 

319,87 

377,06

367,20

392,42 

420,44

Source: DG MARKT estimates based on OJ/TED data 

8.2.3.  Number of contract notices and contract award notices published in OJ/TED  

Table 19): Number of contract notices and contract award notices published in OJ/TED in 2005-2010 by 
EU MS 

2005 

2006

2007

2008

2009 

2010

Contract notices 
(CN)  

Contract  award 
notices (CAN)  

126 897 

133 147

142 025

150 282

153 783 

161 733

77 813 

88 915

115 738

127 347

138 021 

143 782

Source: DG MARKT estimates based on OJ/TED data 

8.2.4.  Legal detail - overview of public procurement legislation 

The  Treaty  on  the  Functioning  of  the  European  Union  (TFEU),  drawing  on  earlier 
treaties,  lays  down  fundamental  and  general  principles  applicable  to  contracting 

EN 

99 

   EN 

 
 
 
authorities in the context of public procurement99. However it was decided, that on 
their own, these prohibitions were not sufficient to establish a single market in this 
area. Differences between national rules and the absence of requirements to open up 
contracts to EU-wide competition often resulted in national markets being closed to 
foreign  competitors.  Secondary  legislation  was  therefore  needed  to  ensure  this 
openness,  as  well  as  to  make  procedures  more  transparent.  Since  1971,  several 
Directives  have  been  adopted  to  supplement  the  general  provisions  of  the  Treaty, 
based on three main principles: 

• 

Community-wide advertising to foster cross-border competition; 

The  prohibition  of  technical  specifications  liable  to  discriminate  against 

• 
potential foreign bidders; and  

• 

Application of objective criteria for evaluation and award of public contracts.  

Over  the  years  new  Directives  were  adopted  both  to  expand  the  coverage  of  the 
Directives (eventually to works, supplies and services) and to exclude certain sectors 
(e.g.  transport,  energy,  water  and  telecommunications).  Other  changes  were 
necessary  to  integrate  requirements  related  to  GATT/WTO  agreements  and  to 
address deficiencies of earlier legislation, such as national markets which were still 
not sufficiently open. The first Utilities Directive (90/531/EEC), in 1990 was based 
on the same principles as the previous Directives, and introduced a higher degree of 
flexibility  for  contracting  entities.  In  April  2004  the  Council  adopted  Directives 
2004/18/EC  and  2004/17/EC  which  replaced  the  previous  Directives.  They  were 
intended to modernise and simplify public procurement procedures, and recognised 
for  the  first  time  in  EU  procurement  law,  the  possibility  of  using  electronic 
procedures.  To  ensure  the  rights  given  to  firms  by  the  EU-rules  were  observed 
everywhere in the EU, the first Remedies Directive (89/665/EEC) was introduced in 
1989100. The Defence Directive was introduced in 2009 to cover the procurement of 
arms, munitions and war material for defence purposes101. The EU is also party to a 
range  of  international  agreements,  most  importantly,  the  GPA102.  In  view  of  the 

99 

100 

101 

102 

The provisions of the economic freedoms ban discriminatory measures and unfair treatment on grounds 
of  nationality,  in  order  to  promote  the  internal  market  objective  of  removing  barriers  to  trade  and 
economic flows within the EU. The general ban on discrimination allows some flexibility in relation to 
security, health, environmental and consumer protection justifications, under certain conditions.  
The current Remedies Directive is 2007/66/EC. It gives all economic operators access to procedures to 
seek redress if they consider a contract has been unfairly awarded. 
Directive 2009/81/EC covers the rules for the procurement of arms, munitions and war material (plus 
related  works  and  services)  for  defence  purposes.  As  a  result  some  procurement  will  continue  to  be 
excluded  from  the  scope  of  all  public  procurement  legislation  pursuant  to  (the  narrowly  construed) 
Article 346 TFEU, but much will fall within the scope of the Defence Directive. Contracts awarded in 
the field of defence not involving military or sensitive equipment are subject to Directive 2004/18/EC. 
To  date  the  GPA  is  the  only  legally  binding  agreement  in  the  WTO  focusing  on  the  subject  of 
government procurement. The version dates from the 1994 Uruguay Round and entered into force on 
1 January 1996. It is a pluri-lateral treaty covering the WTO Members that are parties to the GPA, and 
thus have rights and obligations under the Agreement. 

EN 

100 

   EN 

 
                                                 
international  rights  and  commitments  devolving  on  the  EU  as  a  result  of  the 
acceptance of the GPA, CAEs must apply the provisions of this Agreement103. 

Public procurement legislation is supplemented and complimented by rulings by the 
European Court of Justice (ECJ). 

103 

Council  Decision  94/800/EC  (of  22  December  1994)  concerning  the  conclusion  on  behalf  of  the 
European  Community,  as  regards  matters  within  its  competence,  of  the  agreements  reached  in  the 
Uruguay Round multilateral negotiations (1986-1994), OJ L336, 23.12.1994, p.1. 

EN 

101 

   EN 

 
                                                 
Table 20): Overview of the main developments of secondary legislation 

from 

which 

Comments 

Directive 

Who 

71/305/EEC  Public sector 

77/62/EEC 

Public sector 

What, 
threshold 
Works 
€1 million 

Supplies 
€200,000 

80/767/EEC  Public 
central 
authorities 

sector, 
state 

Supplies 
€140,000 

contracts, 

contracts, 

contracts, 

88/295/EEC  Public sector 

89/440/EEC   Public sector 

contracts, 
Supplies 
€130,000  (for  central  state 
authorities), 
otherwise 
€200,000  

Works  contracts,  works 
concessions 
contracts, 
works  contracts  awarded 
concessionaires, 
by 
subsidised works contracts, 
€ 5,000,000 

90/531/EEC  Utilities 
energy, 
and 
telecommunications 
sectors) 

(water, 
transport 

Works 
supplies 
and 
contracts,  €  5,000,000  for 
works, €400,000 – 600,000 
for supplies 

the 

concessions 
not 
Works 
covered, 
transport,  water 
and energy sectors excluded 
transport,  water,  energy  and 
telecommunications  sectors 
excluded 
Directive 
Amending 
77/62/EEC;  mainly  because 
of 
1979  GATT 
Agreement  on  Government 
procurement; 
transport,  water,  energy  and 
telecommunications  sectors 
excluded 
Directive 
Amending 
77/62/EEC;  i.a.  because  of 
the  1986  GATT  Agreement 
Government 
on 
procurement; 
transport,  water,  energy  and 
telecommunications  sectors 
excluded 
Amending 
71/305/EEC; 
Definition  of  contracting 
broadened 
authorities 
(bodies  governed  by  public 
law),  definition  of  works 
broadened 
contracts 
(execution and design, … or 
the  execution  by  whatever 
means …) 
transport,  water  and  energy 
sectors excluded 
Works concessions contracts 
not  covered,  very  broad 
definition  of 
special  or 
exclusive rights 

Directive 

EN 

102 

   EN 

 
Directive 

Who 

92/50/EEC 

Public sector 

93/36/EEC 

Public sector 

from 

which 

What, 
threshold 
Service 
contracts, 
subsidised  contracts,  design 
contests € 200,000 

Supplies 
€ 130,000 
(central 
others) 

contracts, 
200,000 
state  authorities, 

– 

93/37/EEC 

Public sector 

Works 
contracts,  works 
contracts, 
concessions 
works contracts awarded by 
concessionaires,  subsidised 
contracts, 
works 
€ 5,000,000 

93/38/EEC 

(water, 
transport 

Utilities 
energy, 
and 
telecommunications 
sectors) 

Works  contracts,  supplies 
contracts  services contracts¸ 
design contests, € 5,000,000 
for  works,  € 400,000  – 
600,000  for  supplies  and 
services 

97/52/EC  & 
98/4/EC 

Public  sector  and 
Utilities 

Changes 
previous 
to 
thresholds.  €  5,000,000  / 
SDR  5,000,000  for  works, 
SDR 130,000 - €600,000 for 
supplies 
services 
and 
contracts 

Comments 

transport 

Two  tier  system,  service 
concessions 
excluded; 
water, energy, transport and 
telecommunications  sectors 
excluded. 
Directive 
Codified 
its 
and 
77/62/EEC 
subsequent 
amendments 
and  introduced  substantial 
of 
changes;  Definition 
contracting 
authority 
broadened  (body  governed 
law),  water, 
by  public 
and 
energy, 
telecommunications  sectors 
excluded. 
Purely  a  codification  of 
Directive  71/305/EEC  and 
its subsequent amendments; 
See  remarks  to  89/440/EC. 
transport 
Water,  energy, 
and 
telecommunications 
sectors excluded. 
Codification  of  Directive 
90/531/EEC  with  the  new 
provisions 
concerning 
service  contracts;  Two  tier 
system  for  services,  works 
and 
service  concessions 
contracts  not  covered,  very 
broad  definition  of  special 
or exclusive rights 
97/52/EC 
Directive 
amended 
Directives 
92/50/EEC, 93/36/EEC and 
93/37/EEC, while Directive 
98/4/EC amended Directive 
93/38/EEC; mainly because 
1994  WTO 
of 
Agreement  on  Government 
procurement; 

the 

EN 

103 

   EN 

 
Directive 

Who 

(Water, 
2004/17/EC  Utilities 
energy, 
transport 
and postal sectors) 

2004/18/EC 

Public sector 

from 

which 

supplies 

What, 
threshold 
and 
Works, 
services  contracts,  design 
€ 
contests, 
works 
4,845,000 
for 
€ 387,000 
contracts, 
supplies and services. 

currently: 

for 

supplies 

awarded 

Works, 
and 
services  contracts,  works 
concessions contracts, works 
contracts 
by 
concessionaires,  subsidised 
services 
and 
works 
contracts,  design  contests, 
currently  €  4,845,000  for 
works  contracts  and  works 
concessions,  €  125,000  – 
193,000  for  supplies  and 
services contracts 

Comments 

tier 

with 

system 

narrower 

Directive 
Replaced 
93/38/EEC 
its 
subsequent  modifications; 
Two 
for 
services, works and service 
concessions  contracts  not 
covered, 
but 
refocused  definition  of 
exclusive 
and 
special 
rights.  Postal  sector  added, 
telecommunications  sector 
excluded.  Provisions  on  e-
procurement included. 
Replaced 
Directives 
92/50/EEC, 93/36/EEC and 
with 
93/37/EEC 
subsequent  modifications; 
Two 
for 
service 
services, 
concessions  contracts  not 
covered.  Water,  energy, 
transport, 
and 
telecommunications 
postal  sectors  excluded; 
Provisions 
e-
procurement included. 

system 

tier 

on 

EN 

104 

   EN 

 
 
 
8.3. 

ANNEX 3 - Detailed description of problem drivers 

8.3.1.  Problem drivers in Scope and coverage  

PROBLEM DRIVER: Complexity of the rules on scope and coverage 

Both  contracting  authorities  and  firms  find  that  the  current  rules  defining  who  and 
what  is  included  and  excluded  from  the  scope  and  coverage  of  EU  public 
procurement rules are too complex. At present, a detailed set of conditions need to be 
examined to decide whether a particular buyer or a particular transaction is covered. 
Depending  on  the  individual  procurement,  basic  treaty  principles,  part  or  all  of  the 
obligations  stemming  from  the  Directives  may  need  to  be  applied.  Often  the 
jurisprudence  of  the  ECJ  also  needs  to  be  consulted  as  clarifications  have  been 
sought  in  relation  to  particular  definitions  e.g.  "body  governed  by  public  law  ", 
“public undertaking"104 and what constitutes a "public contract"105. The actual rules 
which  apply  depend  on  the  type  of  purchaser,  the  actual  purchase  and  its  value. 
There are at least 10 possible "choices" based on the application of various threshold 
levels (see: Tables 13) and 14) below).  

Table 21): Rules for the determination of the applicable thresholds – basic thresholds types 

Amount in [€ .000] 

Applies to  

All  works  contracts,  all  subsidised  works  contracts,  all  works 
concessions, all works contracts awarded by concessionaires  
Supplies  and  service  contracts  awarded  by  Utilities;  design 
contests  organised  by  Utilities,  supplies  and  services  contracts 
falling within the scope of the Defence Directive 
Supplies  and  services  contracts  awarded  by  "sub-central" 
contracting  authorities,  subsidised  service  contracts,  design 
contests  organised  by  sub-central  contracting  authorities;  all 
contracts  and  design  contests  concerning  the  services  listed  in 
Annex  II  B  of  Directive  2004/18/EEC;  service  contracts  (and 
design  contests)  concerning  certain  telecommunications  services 
and  R&D  services  awarded  by  central  government  contracting 
authorities;  supplies  not 
in  Annex  V  of  Directive 
2004/18/EC  and  awarded  by  contracting  authorities  operating  in 
the field of defence. 

listed 

5
2
1

3
9
1

7
8
3

5
4
8

4

X 

X 

X 

104 
105 

See: judgement of 10.04.2008 in case C-393/06, Ing Aigner,[2008]ECR, I -2339. 
The current definition in the Directives of a public contract has been supplemented and completed by a 
number of important ECJ judgements e.g. Commission vs. Germany (C-126/03), Donau-Wald case (C-
126/03) or Helmut Müller (C-451/08) and 15.07.10 Commission vs. Germany. This means that there is 
no longer one clear source of information for CAEs. 

EN 

105 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Applies to  

Amount in [€ .000] 

All  service  contracts  and  design  contests  organised  by  central 
government  authorities  concerning  services  listed  in  Annex  II  A 
(except  certain  telecommunications  services  and  R&D  services); 
all  supplies  contracts  awarded  by  central  government  authorities 
not  operating  in  the  field  of  defence;  supplies  contracts  awarded 
by  contracting  authorities  operating  in  the  field  of  defence  and 
concerning 
in  Annex  V  of  Directive 
2004/18/EC 

the  products 

listed 

5
2
1

3
9
1

7
8
3

5
4
8

4

X 

Table  22):  Rules  for  the  determination  of  the  applicable  thresholds  –  grouped  by  the  Directives,  actors 
and transactions  

Directive 
2004/17/EC 

All 
contracting 
entities, 
sectors 

all 

Directive 
2004/18/EC 

Central 
Government 
authorities 

Works contracts 

supplies 

All 
contracts, all design contests 

and 

services 

Works 
works 
contracts, 
concessions  contracts,  subsidised 
works contracts  
All  contracts  concerning  services 
listed  in  Annex  II  B,  certain 
telecommunications  services  and 
R&D services; all design contests 
concerning  these  services  and  all 
subsidised services, 
All  contracts  and  design  contests 
in 
services 
concerning 
Annex  II  A  except  contracts  and 
design contests concerning certain 
telecommunications  services  and 
R&D services 
All supplies contracts awarded by 
contracting 
not 
operating in the field of defence 

authorities 

listed 

Supplies contracts awarded by 
contracting authorities operating 
in the field of defence 

in 

Concerning 
products 
listed 
Annex V 
Concerning 
other 
products 

Sub-central 
contracting 
authorities 

Works 
works 
contracts, 
concessions  contracts,  subsidised 
works contracts  
All  service  contracts,  all  design 
contests, 
service 
subsidised 
contracts, all supplies contracts 

€ 4,845,000

€ 387,000

€ 4,845,000

€ 193,000

€ 125,000

€ 125,000

€ 125,000

€ 193,000

€ 4,845,000

€ 193,000

EN 

106 

   EN 

 
 
 
 
 
 
 
 
 
Since many public authorities do not launch such large contracts every year, they do 
not have the necessary knowledge or familiarity with these EU rules "at their finger 
tips".  

8.3.1.1.  Identification of buyers covered 

With very few exceptions, the first step in deciding whether the Directives apply or 
not, is to decide whether the procurement is being carried out by a relevant body (or 
on  its  behalf).  For  example,  under  the  Classic  Directive,  purchases  are  generally 
made by bodies belonging to the public sector ("contracting authorities"). Concepts 
such as “State” and “local and regional authorities” are generally understood, but the 
definition of public sector also includes “bodies governed by public law”- a concept 
which has proved the source of some confusion and has resulted in a whole series of 
judgments  by  the  ECJ106.  The  Utilities  Directive  applies  to  a  wider  group  of 
purchasers,  known  as  "contracting  entities".  This  group  includes  not  just  the 
"contracting  authorities",  but  also  public  undertakings  and  private  undertakings, 
provided  these  latter  exercise  one  of  the  relevant  activities107  on  the  basis  of  an 
exclusive  or  special  right.  In  this  context  also  there  appear  to  be  some  confusions 
between  the  concept  of  "body  governed  by  public  law  "and  public  undertaking", 
which  was  addressed  by  recent  ECJ  case  law108.  In  approximately  30%  of  the 
contract notices  published  on  OJ/TED,  a  CAE classifies itself as "other", reflecting 
either their confusion, or a potential desire to (knowingly) apply a more favourable 
(but  incorrect)  regime.  This  initial  classification  is  critical  to  identifying  which 
particular provisions of the Directives apply. Random checking conducted as part of 
the evaluation also identified a misclassification rate of around 5%. 

A  majority  of  respondents  to  the  GP  finds  that  the  current  approach  to  defining 
public  procurers  is  appropriate;  some  legal  experts,  civil  society  organisations  and 
public authorities would support some changes in this respect.109 They also feel that 
the EU rules should be limited to actual purchases by CAEs. 

8.3.1.2.  Identification of transactions covered 

Another  set  of  problems  stems  from  the  correct  identification  of  transactions  or 
activities  that  are  covered  by  the  procurement  rules.  Generally,  the  Directives  are 
applicable if the envisaged arrangement constitutes a "public contract"110. Again, the 
current definition in the Directives of a  public contract  has been supplemented and 

106 

107 

108 
109 
110 

The  proper  application  of  the  elements  stated  in  the  jurisprudence  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. 
I.e. the procurement concerned is made for the pursuit of activity in the water, energy, transport and the 
postal sectors. 
See: judgement of 10.04.2008 in case C-393/06, Ing Aigner,[2008]ECR, I -2339. 
Replies to question 9 to the GP. 
That is, "contracts for pecuniary interest concluded in writing between one or more economic operators 
and one or more contracting authorities and having as their object the execution of works, the supply of 
products  or  the  provision  of  services".  The  concept  of  concessions  has  been  the  subject  of  separate 
initiative (i.e. concessions impact assessment). 

EN 

107 

   EN 

 
                                                 
completed by a number of important ECJ judgements111 for example Commission vs. 
Germany,  Donau-Wald  case112  or  Helmut  Müller  case113  meaning  that  there  is  no 
longer one clear source of information for CAEs.  

Under  the  current  legislation,  the  category  of  purchaser  together  with  the  type  and 
value of the items being bought determine which procurement rules apply. Basically, 
the  current  Directives  apply  to  the  award  of  works,  supplies  and  service  contracts, 
whose  estimated  value,  before  V.A.T.  equals  or  exceeds  the  relevant  threshold114. 
Different  thresholds  apply  according  to  the  purchaser  (i.e.  central  or  sub-central 
contracting authorities or contracting  entities) and the subject matter  (goods, works 
or services). Many stakeholders call for the threshold values to be increased, thereby 
simplifying  the  process  for  CAE  and  enterprises  by  removing  a  number  of 
transactions from the scope/application of the Directives. They also question why the 
thresholds  for  defence  and  utilities  are  higher  (for  supplies  and  services)  than  for 
purchases covered by the Classic Directive and/or why inflation has not been taken 
into account (the current thresholds date from the 1994 GPA). On the other hand, a 
limited  number  of  stakeholders  find  the  current  "two-tier"  system  (where  some 
procurement  is  subject  to  detailed  EU  rules  and  the  remainder  to  EU  treaty 
principles)  as  unnecessary  complicated.  For  example,  many  developers  of  e-
procurement platforms want to create one system which is used for all purchases – 
above and below thresholds.  

8.3.1.3.  A/B-type services 

Further  complexity  results  from  the  different  rules  applicable  to  service  contracts, 
(the  so  called  A  and  B-type  services)115.  Recent  research,  comparing  the  Common 
Procurement  Vocabulary  (CPV)  codes  entered  by  a  CAE  against  the  A/B  services 
classification which it also provides, identifies many errors and results in the wrong 
rules being applied. About 7% of transactions reported as A-type services had CPV 
codes that matched the B-type definition and 5% of notices reported as B-type had 
CPV codes matching A-type services (see: Figure 7). The latter example raises more 
concern, as it indicates contracts which should have followed the "full" procurement 
rules  rather  than  the  "simplified"  regime.  Given  that  on  average  €160  billion  per 
annum  are  spent  via  service  contracts  (around  38%  of  the  total  EU  public 
impact. 
procurement  market), 
Approximately 74% of services contracts value refers to A-type group. 

these  errors  could  be  having  a  significant 

111 

112 
113 

114 

115 

Whereby it was clarified that the concept of public contract requires the works, supplies and services 
which  are  the  subject  of  the  contract  are  carried  out  for  the  immediate  benefit  of  the  contracting 
authority. 
See: judgment of 18.11.2004 in Case C-126/03 Commission v Germany, paragraph 18. 
See: judgments of 25.3.2010 in Case C-451/08 Helmut Müller GmbH, paragraphs 47-54, and of 15 July 
2010 Commission v Germany, paragraph 75.  
The thresholds are revised each two years. The current thresholds, applicable for the next two years as 
of 1.1.2010 and established through Commission Regulation (EC) N°1177/2009 reach from € 4 845 000 
for works contracts to €125,000, €193,000 and €387,000 for supplies and services. 
When procuring A-type services, all procedural rules have to be taken into account, as well as Treaty 
principles.  These  rules  support  the  entire  procurement  process  from  the  content  of  a  call  for  tenders 
through  the  selection  of  the  procurement  procedure  to  the  contract  award  for  both  contracting 
authorities  and  economic  operators.  For  B-type  services  the  process  has  been  “simplified”  –the  only 
requirements which must be met are the provision of: a CAN (and which the CAE can indicate whether 
it may or may not be published in OJ/TED); and technical specifications.  

EN 

108 

   EN 

 
                                                 
Figure 7): Share of services by classification (left-hand side graph) and the share of "category 27" services 
by classification (right-hand side graph)  

Actual CPV match

IIA

IIB

Actual CPV match

IIA

IIB

A

I
I

7%

O
N

14%

B

I
I

5%

V
P
C
e
c
v
r
e
S

i

s
e
Y

20%

s
r
e
s
a
h
c
r
u
p
y
b
d
e
t
r
o
p
e
R

Source: PwC study 

Category  27  within  B-type  services  is  even  more  prone  to  misclassification  –  as 
much  as  20%  of  notices  in  this  category  had  CPV  codes  that  refer  to  A-types 
services.  There  is  also  some  evidence  that  the  A/B  lists  may  not  be  capturing  the 
correct services. When this split was made, the A list included services where it was 
felt  that  a  certain  degree  of  cross-border  trade  could  be  expected;  the  B  list  were 
assumed  to be less open  to cross-border  purchasing. However the evaluation found 
that some of the services on the B list exhibit a high degree of cross-border trade and 
vice  versa.  Replies  to  the  GP  consultation  did  not  indicate  a  clear  consensus  about 
how  the  distinction  between  A/B  services  should  be  handled,  although  overall  a 
slight majority felt it should be reviewed. 

8.3.1.4.  Legal uncertainty 

This  complexity  is  one  source  of  the  legal  uncertainty  identified  by  many 
stakeholders.  It  represents  the  perceived  risk  of  complaints  and  litigation  among 
public purchasers and firms116.  

116 

Based  on  a  survey  among  5,500  CAEs  (who  have  recently  carried  out  public  procurement  process 
above  EU  threshold  that  ended  up  in  a  valid  contract  award  published  on  OJ/TED)  and  1,800  firms 
(who have recently won a procurement contract above EU thresholds), source: PwC study, page 117. 

EN 

109 

   EN 

 
 
 
 
 
                                                 
Figure 8): Perceived risk of complaints and litigation among public purchasers (compared – above EU 
threshold public procurement versus below EU threshold public procurement) 

Open

10%

Restricted

Negotiated

13%

12%

29%

31%

31%

0%

10%

20%

30%

40%

Much more and more
than below threshold
procurement 
Much less and less than
below threshold
procurement 

Figure  9):  Perceived  risk  of  complaints  and  litigation  among  firms  (compared  –  above  EU  threshold 
public procurement versus below EU threshold public procurement) 

Source: PwC study  

Open

Restricted

Negotiated

23%

22%

15%

21%

26%

18%

Much more and more
than below threshold
procurement 
Much less and less than
below threshold
procurement 

0%

10%

20%

30%

Source: PwC study 

Such legal uncertainty translates, on the part  of  many  CAEs,  into  a  fear  of  making 
errors  during  the  public  procurement  process  and  as  a  result,  being  subject  to 
litigation.  This  fear  of  litigation  can  then  generate  additional  transaction  costs  to 
cover  general  legal  assistance  and  advice  throughout  the  procurement  process,  as 
well as, in the case where litigation occurs, assistance in court proceedings. The costs 
associated  with  pre-empting  or  addressing  litigation  are  important  elements  in  the 
calculation  of  cost  efficiency  of  procurement.  A  recent  survey117,  estimates  that 
around  25%  of  the  purchasers  responding  incurred  some  litigation  costs  when 
concluding  contracts  with  values  above  the  EU  thresholds.  On  average,  this  25% 
reported  that  eight  person-days  of  costs  were  assigned  to  what  can  be  classified  as 
litigation and the cost of complaints. This implies an average for the full population 

117 

See: PwC study, page 80. 

EN 

110 

   EN 

 
 
 
 
                                                 
of government authorities of around 2.6 person-days per transaction or about 350.000 
person-days annually across Europe for managing complaints and litigation118.  

As  a  result,  CAEs  may  adopt  a  risk  averse  approach,  preferring  to  follow  the  full 
(more  costly)  procedures  rather  than  a  potentially  simpler  regime  which  should 
apply,  in  order  to  avoid  the  risk  of  future  problems  e.g.  an  enterprise  which 
challenges  the  use  of  the  simplified  regime  –  even  if  the  CAE  is  sure  that  it  has 
followed the right procedure, it can still be costly and time consuming to reply to the 
challenge of the enterprise. The above estimate of cost of litigation (in terms of time 
spent) and the possible additional costs incurred by following the “safer” procedure 
leads to questions about how appropriate, proportional and cost-effective the current 
design and definition of the scope and coverage of the EU public procurement rules 
is. 

8.3.1.5.  Conclusions 

To summarise, the current rules are complex and not always available in one place, 
leading to legal uncertainty on the scope and coverage of the Directives, particularly 
for  CAE.  The  correct  identification  of  actors  and  transactions  covered  by  the  EU 
rules might be beyond the capacities of many purchasers, particularly if they do not 
need to apply these rules frequently e.g. smaller local authorities. The current lack of 
clarity with regards of the scope of the Directives has resulted in a number of legal 
cases  and  judgments  in  this  area.  As  a  result,  high-level  legal  analysis  can  be 
necessary  to  define  the  scope  of  the  Directives  and  the  correct  application  of  those 
rules  (especially  in  border-line  cases).  Legal  uncertainty  generated  by  the  current 
rules also leads to additional costs of legal assistance and might result in risk averse 
behaviours of CAEs to avoid litigation. 

8.3.2.  Problem drivers in Procedures 

PROBLEM DRIVER: Disproportionate and inflexible procedures 

Stakeholders frequently raise issues about the disproportionate nature of procedures / 
processes that need to be followed in order to procure works, goods or services by 
public  authorities.  They  complain  that  public  procurement  costs  too  much,  both  in 
the time it takes and the resources it uses. In a recent survey, respondents were asked 
to  compare  public  and  private  purchasing.  57%  of  firms  concluding  contracts 
following the most used procedure (the open procedure) found that it was cheaper or 
much  cheaper  to  sell  to  the  private  sector,  compared  to  17%,  who  thought  the 
opposite;  59%  agreed  that  the  private  sector  process  is  less  or  much  less  time 
consuming, compared with 18% who found private procurement to be more or much 
more expensive. Similar results were found for the other procedures – negotiated and 
restricted119. 

118 
119 

See: PwC study, page 80. 
See: section 8.8.2. 

EN 

111 

   EN 

 
                                                 
8.3.2.1.  Disproportionate costs of procedures for low value contracts 

The  typical  procurement  procedure  costs  for  all  participants  can  be  estimated  at 
nearly €28,000120. This cost is split between CAEs, who typically pay €5,500 per call 
for  tender  launched)  and  firms,  which  pay  €3,800  per  offer  submitted121.  The  total 
cost  for  all  procedures  covered  by  the  threshold  is  some  €5.6  billion  per  annum  or 
1.3% of the total value of contracts published122. 

The cost of the procurement process can, particularly for contracts nearer the lower 
thresholds,  account  for  quite  a  high  percentage  of  the  total  value  of  a  contract. 
Currently  many  transactions  having  values  below  thresholds  are  published  in 
OJ/TED,  meaning  that  most  probably  many  CAEs  follow  EU  rules  and  publish 
notices  in  OJ/TED  although  they  are  not  obliged  to  do  so.  This  implies  that 
significant  and  potentially  disproportionate  costs  of  following  above  threshold 
procedures are being incurred by these CAEs either voluntarily or in order to avoid 
the possibility of falling foul of the rules if by any chance the contract turned out to 
exceed the relevant threshold.  

As seen on Figure 10), 18 % of supplies and services contracts concluded by central 
government  are  below  €  125,000  euro  threshold.  The  total  value  of  the  contracts 
below threshold is minimal, only accounting for half a percentage of the total values 
for all contracts in the threshold category. In the range above the threshold level, the 
number  of  contracts  accumulates  quickly  while  the  values  accumulate  much  more 
slowly.  Two  thirds  of  all  central  government  services/supplies  contracts  under  the 
scope of the threshold are below the € 500,000 level. The total value is much less, in 
total only 10 % is found at that level. 

Figure 10): Supply and service contracts published by central authorities 

s
t
c
a
r
t
n
o
c

f
o
r
e
b
m
u
N

250

200

150

100

50

0

0

T
h
r
e
s
h
o
d

l

80 %

N 
Cumulative

50 %

20 %

Cumulative

100

200

400
300
Value of contract ('000)

500

Source: Pwc study 

120 

121 
122 

To  arrive  at  the  above  mentioned  total  cost  of  €28,000,  the  cost  borne  by  businesses  need  to  be 
multiplied  by  the  number  of  bids  submitted  per  procedure  (a  weighted  average  of  5.9  bids  per 
procedure). 
PwC study, page 88. 
PwC study, page 89. 

EN 

112 

   EN 

 
€
 
 
 
                                                 
In the sub-central threshold category nearly 30 % of contracts recorded have values 
below the threshold (se: Figure 10).  

Figure 11): Supply and service contracts published by sub-central authorities 

T
h
r
e
s
h
o
d

l

s
t
c
a
r
t
n
o
c

f
o
r
e
b
m
u
N

400

350

300

250

200

150

100

50

0

80 %

N 
Cumulative

50 %

20 %

Cumulative

0

100

200

300

400

500

Contract value ('000)

The  cumulative  value  of  these  is  about  1.6%  (2.2%  for  open  procedure).  The 
accumulation  of  contracts  and  values  match  very  closely  the  central  government 
patters.  

Whereas  the  works  threshold  is  concerned,  as  much  as  70%  of  works  contracts 
concluded are below € 4.85 million (see: Figure 12). 

Source: Pwc study 

Figure 12): Works contracts (by all types of authorities)  

120

s
t
c
a
r
t
n
o
c
f
o
r
e
b
m
u
N

90

60

30

0

0

1

80%

N Cumulative

50%

T
h
r
e
s
h
o
d

l

20%
€ Cumulative

5

6

2
Contract value (millions)

3

4

The  above  data  confirm  that  many  below  threshold  contracts  are  published  in 
OJ/TED. This may be due to the fact that many CAEs “voluntarily” publish notices 
at the EU level. Whilst some of these contracts are published in compliance with EU 
provisions stating that individual contracts which form part of a larger project must 
be  published  if  the  sum  total  exceeds  the  appropriate  threshold,  this  does  fully 
explain the phenomenon.  

Source: Pwc study 

EN 

113 

   EN 

 
€
 
 
 
 
 
 
There is some evidence that CAEs publish CNs with no cross-border interest, as they 
find OJ/TED to be a well-functioning, toll-free portal that is regularly accessed and 
monitored  by  their  domestic  firms  (especially,  if  no  similar  platform  exist  at  the 
national  level).  Finally,  some  CAEs  presumably  follow  the  EU  rules  because  of  a 
lack  of  knowledge  and  misunderstanding  of  what  is  and  is  not  covered  by  the 
Directives.  

For  these  smaller  value  contracts,  the  cost  of  following  the  rules  set  out  in  the 
Directives  constitutes  a  significant  proportion  of  the  contract  value  itself.  At  the 
lowest threshold in the Directives, € 125'000, total costs of purchase can amount to 
between 18 and 29 % of the contract value. At € 390'000, the median contract value, 
costs reach between 6 and 9 %. Although the cost for each participant is lower than 
this total (about 1/6), these shares are significant.  

Figure 13): Total procurement cost (CAE and firms) as share of contract values (HiLo estimates) 

390
125
threshold median contract

30 %

20 %

10 %

t
c
a
r
t
n
o
c
f
o
e
r
a
h
S

0 %

100 

200 

400 

800 

1 600 

Contract value ('000)

Source: PwC study 

These findings are clearly influenced by the fact that many of the contracts published 
are  well  below  EU  threshold.  This  may  occur  for  a  variety  of  reasons,  a  positive 
example  being  the  case  where  as  a  result  of  the  competition  from  following  the 
Directives,  the  final  price  is  reduced  to  a  point  below  the  original  estimate,  which 
was above the EU thresholds. However, as mentioned above, it may also be the case 
that uncertainty about what rules to apply, linked also to a fear of litigation, causing a 
CAE  to  follow  the  stricter  rules  required  under  the  Directives.  Some  contracts  are 
also published individually, but which form part of one single project where the total 
costs  is  higher  than  the  thresholds123.  Nonetheless,  the  above  mentioned  costs  of 
procedure and their share in the total final value of the contract concerned mean that 
for the low-value contracts these costs seem to be disproportionate. 

8.3.2.2.  Complexity of the rules on procedures 

Despite the savings identified by various studies and the changes introduced in 2004, 
there are some calls for the current legislation to be further reviewed and simplified. 

123 

See: article 9 of Directive 2004/18/EC. 

EN 

114 

   EN 

 
 
 
 
                                                 
In 2009124, the High Level Group investigating administrative burden concluded that 
this  burden  accounted  for  €216  million  of  the  €234  million  identified  as  the  total 
administrative costs resulting from EU public procurement rules (i.e. over 92%).  

A  broad  majority  of  respondents  to  the  GP  consider  that  the  procurement  rules  are 
too  detailed,  although  most  MS  and  business  representatives  disagreed  with  this 
opinion. This difference is not so surprising when one considers that it is essentially 
CAEs, rather  than firms,  which have to understand and follow the rules, while MS 
representatives will often be those who have drafted the appropriate legislation in the 
first place. The perceived complexity is usually driven the detailed character of rules 
defining  the  procedures  (for  example,  the  technical  specifications,  strict  division 
between the selection and award stage of the evaluation, etc.).  

Similarly  to  the  legal  uncertainty  referred  to  in  Scope,  uncertainty  with  regards  to 
procedures  results  in  fear  of  litigation  that  might  lead  to  sup-optimal  (risk  averse) 
choices  being  made  by  authorities  in  order  to  avoid  litigation.  This  perception  is 
widely shared among stakeholders although the available evidence in this respect is 
rather  anecdotal.  For  example,  in  a  recent  survey  run  by  the  Local  Government 
Association in the UK, the fear of litigation is identified an one of the most common 
themes, with respondents stating for example: "the biggest fear facing my own staff is 
always  regarding  the  risk  of  legal  challenge  […].  This  fear  leads  to  cautious,  risk 
averse  procurement  procedures  that  stifle  innovation  and  the  chance  to  deliver 
cashable savings"125  

8.3.2.3.  Insufficient flexibility 

The  current  rules  are  also  accused  of  lacking  flexibility  and  preventing  CAE  from 
achieving the best possible outcomes; in particular many respondents to the GP call 
for  more  flexibility  in  the  conduct  of  the  procedure126.  Initiatives  where  more 
flexibility could be permitted include: the opportunity to negotiate with bidders and 
the setting of time-limits; the organisation and sequence for examining selection and 
award  criteria;  allowing  CAEs,  in  exceptional  circumstances,  to  take  account  of 
criteria  pertaining  to  the  bidder  himself;  and  more  generally  to  take  into  account 
previous experience with one or several bidders. In particular, contracting authorities 
operating under the framework of the Classic Directive complain that their ability to 
negotiate with enterprises is too limited and ask for more flexibility127 – or at least 
the same flexibility permitted by the Utilities directive.  

Data  from  the  last  five  years  show  growing  use  of  the  competitive  dialogue  (a 
procedure  which  permits  negotiation  both  on  the  substance  of  the  contract  and  the 
content of a bidder’s reply) which was introduced in 2004. Although this procedure 
is the least frequently used, amounting to less than one percent of contracts, the total 

124 

125 

126 
127 

EN 

at: 

available 

Report 
regulation/files/abst09_pubproct_en.pdf 
"The  impact  of  EU  procurement  legislation  on  councils", Local  Government  Group, December  2010, 
page 12. 
Responses to question 15 of the GP. 
In  the  Classic  sector,  the  negotiated  procedure  with  publication  accounts  for  8%  of  contract  award 
notices and 14% of the total value, with an average contract size of €6.6 million. 

http://ec.europa.eu/enterprise/policies/smart-

115 

   EN 

 
                                                 
value  involved  is  significantly  higher  –  up  to  8.6%  of  total  value  of  contracts 
awarded in 2010 (5.2% in 2009), with a mean contract value of €40 million. 

Figure 14): The use of competitive dialogue over time (2006-2010) 

10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

8.6%

5.2%

3.9%

Competitive Dialogue -
Value

1.7%

0.7%

2006

2007

2008

2009

2010

Source: PwC study  

The  rapid  take-up  of  the  competitive  dialogue  procedure  since  its  introduction, 
suggests that there was a need for a procedure that allowed for more negotiation or 
dialogue  also  in the  Classic  Directive.  However, use of this procedure is limited to 
very  complex  projects  and  hence  does  not  fully  meet  the  needs  of  contracting 
authorities.  

Finally, the perceived lack of flexibility of the current procedures is also a source of 
missed  opportunities  for  society,  preventing  CAEs  from  responding  effectively  to 
strategic  goals.  The  previously  quoted  survey  of  local  authorities  in  the  UK  also 
points  out  that  lack  of  flexibility  of  the  procedures  emerged  as  a  challenge 
experienced  in  relation  to  EU  procurement  rules:  "such  a  rigid  regime  stops  local 
authorities  from  being  able  to  take  advantage  of  innovative  commercial  offers  that 
do not fit with the agreed evaluation criteria"128.  

8.3.2.4.  E-procurement 

Some of the existing provisions and tools specified in the current Directives are not 
being  used  to  their  full  potential.  This  is  particularly  the  case  for  some  of  the 
electronic  procurement  (or  e-procurement)  solutions  which  could 
improve 
transparency  and  simplicity  and  generate  significant  cost  savings129.  Recent  figures 
from  Deutsche  Bank  Research  estimate  that  suggests  "that  a  full  switch  to  e-
procurement may save between € 50 to 75 billion on public procurement in the EU 
per  year".  As  such,  this  lack  of  uptake  represents  a  missed  opportunity.  Although 
much  work  has  been  undertaken  to  introduce  e-procurement  systems  since  the 
concept  was  introduced  in  2004,  the  availability  of  a  system  has  not  yet  translated 
into  widespread  use.  The  evaluation  of  the  2004  Action  Plan  for  e-procurement 
estimated that even in the first mover countries, e-procurement accounts for less than 
5% by value of total procurement. The exceptions are seen in countries which have 

128 

129 

"The  impact  of  EU  procurement  legislation  on  councils", Local  Government  Group, December  2010, 
page 13. 
See: the evaluation of the 2004 Action Plan for e-procurement.  

EN 

116 

   EN 

 
 
                                                 
mandated  the  use  of  e-procurement  e.g.  Portugal  (all  procurement)  and  Lithuania. 
Equally the systems which are being developed differ significantly from country to 
country  and  even  region  to  region,  creating  a  risk  of  market  fragmentation  and 
increasing costs for suppliers who have to invest time  in understanding how  to use 
the different systems as they move between different CAEs.  

There is certain inertia on the part of CAE and, to a lesser extent, businesses to move 
towards using e-procurement. The evaluation highlighted a number of key challenges 
facing e-procurement which need to be addressed if greater take-up is to be achieved 
and risks to fragmenting the EU public procurement market are to be addressed.  

Authentication  and  integrity  measures  also  differ  significantly  between  systems. 
Here  there  are  particular  issues  relating  to  the  very  technical  measures  which  were 
initially  promoted  at  EU  level.  Some  MS  have  adopted  these  solutions  which  at 
present  are  very  often  national  solutions,  creating  barriers  to  non-domestic  firms 
trying to bid in another country and creating a conflict/tension with the ability of e-
procurement  to  actually  open  up  markets  by  over-coming  distance  barriers  to 
bidding.  Others  have  adopted  less  technical  approaches  which  could  be  less  secure 
(although  there  is  no  hard  evidence  available  to  support  this  belief  at  present)  but 
which are more open to a wider range of bidders.  

Sometimes  the  problem  stems  from  over  specification  –  for  example,  the  DPS,  a 
purely  electronic  tool  introduced  in  2004  to  create  an  open  repetitive  purchasing 
system is specified in great detail but does not seem to work in its current form. 22 
out of 27 MS have transposed the provisions for this option into their legislation, but 
many  have  also  felt  it  necessary  to  add  further  clarification  and  despite  these  good 
intentions,  only  one  MS  has  currently  implemented  a  working  system.  Given  the 
growing use of framework agreements, another form of repetitive purchasing albeit a 
closed system, and the interest shown by the transposition of the option, this points to 
problems in the system design which should be addressed. 

Equally  some  problems  are  due  to  a  lack  of  detail  –  for  example  electronic 
catalogues, a powerful tool for standardising and simplifying bid responses are only 
mentioned  in  a  recital.  Standards  which  could  have  reduced  the  emergence  of 
technical  barriers  and  aided  in  the  integration  of  certain  features  are  only  now 
beginning to emerge.  

8.3.2.5.  Aggregation of demand 

Other  examples  of  tools  provided  for  in  the  Directives  and  not  used  to  its  full 
potential are instruments that facilitate aggregation of demand (for example CPBs or 
a tool frequently used by CPBs i.e. framework agreements).  

In  the  recent  years,  an  increase  in  the  use  of  framework  agreements  and  joint 
purchasing130 has been observed. The values over time show large changes. For joint 
purchasing,  there  has  been  a  considerable  development  -  from  constituting  a  few 

130 

While using the term "joint purchasing", we refer to data collected from notices published in OJ/TED, 
where CAE reported that they “purchase on behalf of other contracting authorities”. The definitions and 
interpretation of this concept may therefore include both centralized purchasing bodies and other joint 
purchasing arrangements,(for example purchases made by several local authorities). 

EN 

117 

   EN 

 
                                                 
percent  of  total  values  to  reaching  about  22%  in  2010.  The  values  involved  in 
framework agreements are also increasing and reached even higher levels - at about 
25 % in 2010. About €85 billion of framework agreements were concluded in 2010.  

Figure 15): Use and values of techniques over time as share of total 

Framework agreement

25 %

20 %

15 %

10 %

5 %

0 %

Joint purchasing

25 %

20 %

15 %

10 %

5 %

0 %

N
u
m
b
e
r

V
a
u
e

l

2006

2007

2008

2009

2010*

2006

2007

2008

2009

2010*

Both  these  techniques  are  frequently  used  together  -  joint  purchasers  tend  to  use 
frameworks more extensively than the general population (i.e. the share in number of 
notices rises from 11% in the overall use to 25% when joint purchasing is used, see: 
Figure 16).  

Source: PwC study 

Figure 16): Share of joint purchasing using frameworks  

Share of joint purchasing using frameworks

More

DK

NO
SE

SK
NL

PT

CZ

GB

IE
RO

EEA30

FIFR
LV

EE

BG
PL
DE
AT BE

SI

LT
ES
HU
IT
GR

Less
than overall use

60 %

40 %

20 %

0 %

0 %

20 %

40 %

60 %

Overall use of frameworks  

Source: PwC study 

The key problems related to the observed trends towards the aggregation of demand 
are two-fold – on the one hand, weakly or improperly regulated aggregation may be 
the  source  of  threats  to  competitiveness  as  it  may  foreclose  the  markets  (over  time 
and in value terms). However, the recent evaluation suggest that the current rules are 
not  sufficiently  equipped  with  mechanisms  that  ensure  fair  competition  when 
contracts are aggregated (e.g. for example by framework agreements131).  

Secondly, wise use of instruments aggregating demand might generate economies of 
scale  and  give  MS  leverage  to  conduct  strategic  procurement  policies  more 

131 

Source: PwC study, page 114.  

EN 

118 

   EN 

 
 
                                                 
efficiently than without aggregation. At this moment, there is no indication that it is 
really happening and the society loses opportunities and gains that could have been 
generated through professional, strategic purchasing conducted by CPBs.  

8.3.2.6.  Conclusions 

In  summary,  problems  relating  to  a  certain  lack  of  flexibility  and  disproportionate 
nature  of  the  current  procedures  hamper  efficient  responsiveness  to  structural 
changes  in  the  markets  and  create  cost  inefficiencies.  They  also  create  missed 
opportunities for society and together result in the best value for money and society 
not being achieved.  

8.3.3.  Problem drivers in Strategic public procurement  

PROBLEM DRIVER: Uncertainty and insufficient provisions with regards to integration of other policy goals in 
public procurement 

The prime aim of the current rules is to ensure that when the public sector purchases 
goods,  services  or  works  in  the  market  place,  it  does  so  in  a  transparent  manner, 
treating all potential suppliers or service providers equally and seeking the offer that 
provides the best, or most appropriate, quality at the best price.  

8.3.3.1.  Insufficient provisions with regards to the integration of strategic goals 

Given the significant and influential role of public procurement in the economy, it is 
clear  that  it  has  the  potential  to  impact  on  other  policies  (EU2020  objectives).  The 
most  frequently  mentioned  main  areas  for  future  strengthening  of  the  rules  are: 
environmental  sustainability;  respect  for  certain  social  conditions;  and  supporting 
innovation.  In  response  to  demands  to  be  able  to  use  public  procurement  rules  to 
support other strategic goals, changes were introduced in 2004 to help CAEs achieve 
the  aims  of  "sustainable  and  non-inflationary  growth  respecting  the  environment" 
and  "a  high  level  of  employment  and  of  social  protection".  The  Commission  has 
published  a  handbook  on  environmental  public  procurement  and  most  recently  a 
Guide  to  taking  account  of  social  Considerations  in  Public  Procurement.132  These 
guidelines  explain  the  extent  to  which  environmental  and  social  considerations  can 
be taken into account within the existing legal framework and according to existing 
case  law  from  the  Court  of  Justice  of  the  European  Union.  They  provide  general 
rules and examples of various ways in which environmental or social considerations 
can and cannot be taken into account in different parts of the procurement process. 

Findings  of  a  recent  survey  of  CAEs  indicate  that  the  majority  have  incorporated 
environmental  considerations  in  their  procurement  strategies,  although  there  is  still 
quite  a  difference  between  the  frontrunners  and  those  lagging  behind  in  the  Green 
Public  Procurement  (hereafter:  GPP)  stakes.  It  is  not  clear  to  what  extent  the 
European  Commission  Guidelines  have  been  effective  in  clarifying  the  situation, 
particularly for social considerations where the relevant guidelines will not yet have 
been available. 

132 

European Commission, Buying green! A handbook on environmental public procurement, Luxembourg 
2004 and European Commission, Buying Social, A Guide to taking account of social Considerations in 
Public Procurement, Luxembourg 2010. 

EN 

119 

   EN 

 
                                                 
Figure 17): Uptake of GPP policies by MS 

Source: Adelphi, study 

Stimulation of innovation through the wider use of variants does not appear to be a 
widespread choice at present. In fact, there is a universal trend over the last few years 
in all MS towards allowing variants in fewer cases133. Some measures or incentives 
may be needed if it were considered desirable to reverse this trend.  

As the current rules are non-prescriptive and leave plenty of leeway to the CAE, the 
Commission  has  also  published  a  number  of  communications134  intended  to  clarify 
the  practicalities  of  how  to  integrate  other  policy  objectives  whilst  still  remaining 
compliant  with  the  public  procurement  regime.  As  Figure  17)  shows,  the  most 
common  means  of  incorporating  environmental  considerations  is  in  the  technical 
specifications, although the use of award criteria and requiring specific technical or 
professional qualifications are also relatively frequent. 

133 
134 

Except for Ireland, see: the Evaluation Report, pages 104-5.  
An  interpretative  communication  explaining  how  environmental  considerations  could  be  integrated 
within  procurement  practice  (2001);  The  Commission  Communication  on  Integrated  Product  Policy 
(2003); A handbook on environmental public procurement (2004); The Commission Communication on 
the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan (2008). 

EN 

120 

   EN 

 
 
                                                 
Figure 18): Where do you address environmental objectives in your tender documents?  

These figures are based on the results from the European level that uses the stratified 
results from 30 EEA MS whereas the comparison of the front-runners (Denmark, the 
Netherlands, Norway, Sweden, and the UK), is based on the average percentages of 
22  MS.  The  frontrunners  use  more  sections  and  also  use  them  more  often  than  the 
other MS. 

Source: Adelphi study 

Figure 19): Frontrunners compared with other MS 

Source: Adelphi study 

However, various stakeholders find that problems remain - both in practical terms of 
how  to  apply  the  rules  correctly  and  because  they  feel  that  not  enough  weight  has 
been given within the public procurement regime to achieving these strategic aspects.  

There  is  also  the  possibility  that  pursuing  such  strategic  objectives  may  ultimately 
lead to a fragmentation of these different procurement markets across the EU. Many 
MS have undertaken various initiatives on national or regional level to give effect to 
further  integration  of  other  policies  in  public  procurement.  27  out  of  30  EEA 
countries  have  adopted  national  action  plans  to  support  green  procurement,  often 
involving  the  setting  of  targets  in  terms  of  proportion  of  spend  on  products  or 
services having greener characteristics. Approximately half of MS have implemented 
action  plans  to  support  integration  of  social  objectives.  Two  counties  have 
established strategies for innovative procurement135. It seems that even when similar 

135 

Adelphi study, page 53. 

EN 

121 

   EN 

 
 
 
 
                                                 
objectives  have  been  identified,  they  are  being  implemented  through  different 
commitments / means and to different extent across MS. 

8.3.3.2.  Uncertainty with regards to extent of integration of strategic goals 

Even with the existing guidance, CAE are unsure how far they can go in integrating 
these other strategic goals. Some of this uncertainty stems from a lack of specialist 
knowledge  and  competence  –  sometimes  in  a  given  strategic  area,  sometimes  in 
terms of adapting their public procurement practices to absorb these wider strategic 
issues, whilst remaining compliant with the Directives. The problems encountered by 
many CAE relating to the complexity of the current EU rules can only be magnified 
when  they  are  also  asked  to  integrate  and  often  police  other  policy  goals  when 
procuring  a  particular  item.  Equally,  for  many  of  these  policy  areas,  the  evaluation 
found that there is a lack of appropriate national guidance setting strategic objectives 
and linking them to public procurement in particular, meaning that individual CAE 
need  to  identify  targets  and  take  responsibility  for  policy  areas  where  they 
themselves may have little experience and expertise. In certain areas, particularly in 
relation  to  innovative  purchases,  the  resultant  uncertainty  and  risk/fear  of  non-
compliance appears to be proving too great, deterring many CAEs from using public 
procurement to support and achieve these strategic goals. 

Several stakeholders make the argument that the current system rewards compliance 
with  the  Directives.  They  find  that  no  incentives  are  built  into  the  existing  public 
procurement  regime  to  incentivise  CAEs  to  use  their  procurement  to  support  these 
wider strategic objectives. Rather, they feel “hamstrung” by the current rules, which 
restrict their freedom by insisting that any selection/award/performance criteria show 
a  clear  link  with  the  subject  of  the  contract.  Hence  they  are  not  able  to  add  the 
specifications  they  would  like.  A  commonly  used  example  is  the  inability 
of/difficulty incurred by CAEs wishing to support for example Fair Trade objectives, 
fair employment conditions, etc.  

However,  results  from  the  survey  shows  that  while  CAEs  use  social  responsibility 
considerations  most  frequently  as  requirements  for  promoting  employment 
opportunities  and  decent  working  conditions,  fair  trade  and  accessibility  objectives 
are also actively pursued by some CAEs.  

EN 

122 

   EN 

 
Figure 20): What kind of specific requirements do you set with regard to socially responsibility objectives 
in your tender documents? 

Source: Adelphi study 

It  is  worth  noting  that  20%  of  those  who  do  not  include  any  specific  social 
considerations  in  their  requirements  nonetheless  say  that  they  do  take  social 
considerations  into  account  in  procurement.  These  CAEs  may  be  including  social 
issues in their contract terms and conditions or by reference to national legislation or 
International Labour Organisation (ILO) standards. 

The  GP  responses  on  the  issue  of  using  public  procurement  in  support  of  other 
policies show a division in opinions between businesses and contracting authorities 
on  the  one  side  and  civil  society  on  the  other.  A  majority  of  businesses  and 
contracting  authorities  considers  the  current  rules  on  technical  specifications  as 
sufficient.  A  large  majority  of  civil  society  organisations  have  a  less  positive 
opinion.136 A majority of respondents is against introducing obligations on "what to 
buy"  in  the  EU  public  procurement  rules.  Only  civil  society  organisations  are  in 
favour of this idea.137 

Whilst  a  majority  of  stakeholders,  notably  majority  of  contracting  authorities,  civil 
society organisations and MS, agree that the Directives should be clearer on how to 
include  environmental  and  social  criteria  in  the  award  phase,  there  is  low  overall 
support  for  allowing  public  procurers  to  choose  bidders  on  factors  which  are  not 
related  to  the  subject-matter  of  the  contract,  although  the  responses  were  quite 
varied.  138  The  Network  for  Sustainable  Development  in  Public  Procurement 
trade  unions  and  non  governmental 
Network,  for  example,  consisting  of 

136 
137 
138 

Responses to question 62 of the GP. 
Responses to question 83 of the GP. 
Responses to question 79 of the GP. 

EN 

123 

   EN 

 
 
 
                                                 
organisations with social and environmental interests, emphasised that best value in 
public  contracting  is  not  simply  the  lowest  price  but  must  take  account  of  social, 
ethical and environmental benefits139.  

Stakeholders  from  all  groups  want  to  see  further  promotion  and  stimulation  of 
innovation through public procurement. A majority of business and public authorities 
shares  the  view  that  additional  measures  are  needed  in  order  to  strengthen  the 
innovation capacity of SMEs.140  

Most MS have put in place some measures to encourage the procurement of greener, 
more  sustainable  and  socially  responsible  products  and  services  as  well  as  making 
public  contracting  more  open  and  accessible  to  SME  and  innovative  solutions. 
However  the  degree  to  which  contracting  entities  actually  put  these  policies  into 
practise  varies  widely  both  across  and  within  MS.  As  a  result  suppliers  are 
potentially faced with a variety of technical specifications, citing different standards, 
certificates or labels in different MS.  

Figure 21): Front-runners in encouraging innovation compared with the other MS 

Source: Adelphi study 

The MS which are frontrunners in terms of encouraging innovation (Finland, the UK 
and  the  Netherlands)  refer  to  the  use  of  EMAT  criteria  more  frequently  than  other 
MS  as  a  way  to  encourage  innovation,  along  with  functional  requirements, 
acceptance of variants and life-cycle costing.  

The  relative  importance  of  the  use  of  life-cycle  costing  as  a  means  to  encourage 
innovation by the frontrunners compared with other MS may show how innovation 
and sustainability may be interlinked. 

8.3.3.3.  Conclusions 

In summary, some stakeholders feel that the current rules do not respond sufficiently 
to  the  demand  to  support  wider  strategic  goals  and  that  CAEs  are  prevented  from 
achieving  these  wider  objectives  by  the  complexity  of  the  existing  public 
procurement rules. Also, the different approaches introduced across the EU, may be 
creating  national  rather  than  Europe-wide  markets.  This  may  present  a  lost 
opportunity to create a sufficient public sector demand for these strategic purchases 
within  the  internal  market  and  enable  them  to  compete  effectively  with  more 

139 
140 

In practice 70% of all contracts are awarded on the basis of EMAT rather than on lowest price. 
Responses to questions 91 and 97 of the GP. 

EN 

124 

   EN 

 
 
 
                                                 
traditional  products  offering  lower  levels  of  sustainability  e.g.  lower  environmental 
protection, less social improvement. 

8.3.4.  Problem drivers in Access 

PROBLEM DRIVER: Market access barriers 

One of the key objectives of public procurement policy has always been the open and 
free access of all European undertakings to public contracts in Europe. Fragmented 
national  procurement  markets  were  considered  to  be  economically  inefficient. 
Discriminatory  procurement,  where  it  occurred,  would  constitute  a  barrier  to  trade 
and reduce trade flows.  

8.3.4.1.  Low cross-border procurement 

Although  cross-border  access  is  facilitated  by  the  high  transparency  created  by  the 
Directives, this has not translated into particularly high levels of actual cross-border 
trade.  Direct  cross-border  procurement141  accounts  for  1.6%  of  awards  or  roughly 
3.5%  of  the  total  value  of  contract  awards  published  in  TED  during  2006-9.  In 
addition  to  direct  cross-border  procurement,  there  is  a  considerable  volume  of 
indirect  cross-border  procurement142.  This  channel  accounted  for  11.4%  of  awards 
published in TED and 13.4% by value during 2006-9. As the above figures suggest, 
the  dominant  role  in  cross-border  procurement  is  played  by  purchases  from  local 
affiliates  of  foreign  companies  and  not  by  direct  purchases  (i.e.  not  by  the  channel 
that is directly influenced and governed by the Directives). 

Figure 22): Direct cross-border procurement and indirect cross-border through affiliates 2006-2009 

16,0%

14,0%

12,0%

10,0%

8,0%

6,0%

4,0%

2,0%

0,0%

12,4%
11,7%

13,7%

13,9%

11,2%

11,4%

indirect cross-boder
through affiliates
(value)

indirect cross-boder
through affiliates
(number of
contracts)
direct cross-border
(value)

3,2%

1,6%

3,7%

1,8%

3,6%

1,4%

direct cross-border
(number of
contracts)

2007

2008

2009

Source: Rambøll study 

141 
142 

I.e. when firms tendering from their home market win contracts in another MS. 
I.e. when firms bid for contracts in another MS through their foreign affiliates or subsidiaries. 

EN 

125 

   EN 

 
 
                                                 
38% of contracts above EU thresholds are awarded within the distance143 of 50 km 
and 50% of contracts within the distance of 100 km144 (see: Figure 23).  

Figure 23): Cumulative shares of awarded contracts in relation to distance (2007-2009) 

Distribution  of  awards in  relation  to distance 

25%

20%

s
d
r
a
w
a

f
o

e
r
a
h
S

15%

10%

5%

0%

0
1
-
0

0
2
-
0
1

0
3
-
0
2

0
4
-
0
3

0
5
-
0
4

0
6
-
0
5

0
7
-
0
6

0
8
-
0
7

0
9
-
0
8

0
0
1
-
0
9

0
1
1
-
0
0
1

0
2
1
-
0
1
1

0
3
1
-
0
2
1

0
4
1
-
0
3
1

0
5
1
-
0
4
1

0
6
1
-
0
5
1

0
7
1
-
0
6
1

0
8
1
-
0
7
1

0
9
1
-
0
8
1

0
0
2
-
0
9
1

0
1
2
-
0
0
2

0
2
2
-
0
1
2

0
3
2
-
0
2
2

0
4
2
-
0
3
2

0
5
2
-
0
4
2

0
6
2
-
0
5
2

0
7
2
-
0
6
2

0
8
2
-
0
7
2

0
9
2
-
0
8
2

0
0
3
-
0
9
2

0
1
3
-
0
0
3

0
2
3
-
0
1
3

0
3
3
-
0
2
3

0
4
3
-
0
3
3

0
5
3
-
0
4
3

0
6
3
-
0
5
3

0
7
3
-
0
6
3

0
8
3
-
0
7
3

0
9
3
-
0
8
3

0
0
4
-
0
9
3

0
1
4
-
0
0
4

0
2
4
-
0
1
4

0
3
4
-
0
2
4

0
4
4
-
0
3
4

0
5
4
-
0
4
4

0
6
4
-
0
5
4

0
7
4
-
0
6
4

0
8
4
-
0
7
4

0
9
4
-
0
8
4

0
0
5
-
0
9
4

0
1
5
-
0
0
5

Distance between  awarding  authority  and economic  operator in  kilometers

The  above  data  shows  that  half  of  awarded  contracts  are  concluded  within 
geographic  proximity.  An  average  distance  for  each  type  of  contract  (i.e.  goods, 
works  and  services)  is  different  and  confirms  that  supply  contracts  are  the  most 
tradable,  as  the  average  distance  between  the  buyer  and  seller  is  232  km  (i.e. 
significantly more than 102 km for works and 123 km for services).  

Source: Rambøll study 

8.3.4.2.  Import penetration lower than in the private sector 

At the macroeconomic level, public sector import penetration can be influenced by 
various structural factors determining overall intensity of its cross-border purchases 
(trade flows). Using estimates based on the analysis of national accounts data from 
the  five-yearly  symmetric  input-output  tables  collected  it  appears  that  total  import 
penetration145,  has  increased  from  14.1%  in  1995  to  17.4%  in  2005.  This  would 
indicate a general trend towards more cross border trade in the overall economy and 
also more cross border sourcing of inputs by public sector. 

143 
144 
145 

Distance between a CAE and a winning firm.  
Rambøll study, page 81. 
Understood as the proportion of imports to the total use (of selected sectors or total economy). 

EN 

126 

   EN 

 
 
 
 
                                                 
Table 23): Import penetration of public and private sectors in 1995, 2000 and 2005 

Year 

Import 
penetration 
public sector 

of 

Import 
penetration  of 
private sector 

Import 
penetration 
total economy 

of 

between 
and 

Gap 
public 
private 
(percentage 
points) 

2005 

7.5% 

2000 

6.5% 

1995 

5.1% 

19.1% 

18.7% 

15.6% 

17.4% 

17.1% 

14.1% 

11.6 

12.2 

10.5 

Source: Rambøll study 

However  this  data  also  shows  that  import  penetration  in  the  public  sector  is 
significantly lower than in the private sector, suggesting that the public sector is less 
open and integrated in the general economy as than the private sector. There are both 
supply and demand side explanations. Looking at the demand side, this difference in 
import  penetration  can  be  partially  explained  by  the  differences  in  the  kinds  of 
purchase  made  by  government  authorities  as  compared  to  private  companies.  The 
differences in the structure of purchases by these two sectors was pointed out in an 
earlier evaluation study by Europe Economics146 as a potential reason for differences 
in public and private import shares.  

In 2005 60% of public sector demand was due to three main product groups: public 
administration  (25.3%);  health  and  social  services  (21.2%)  and  education  (14.3%). 
Their joint import penetration ratio is close to zero (0.1%), reflecting perhaps that in 
general  they  are  locally  provided  services  and  by  their  very  nature,  less  tradable 
services than supplies. This has a significant affect on the public sector’s propensity 
to import - the three largest sectors are not fully exposed to competition due to either 
exclusions,  exemptions  or  other  regulatory  arrangements,  such  as  reimbursement 
through  statutory  health  insurance,  that  place  them  outside  of  the  full  scope  of 
application  of  EU  public  procurement  rules  (or  even  the  rules  governing  the 
procurement of B-type services).  

Finally,  although  there  seem  to  be  reasons  to  explain  lower  levels  of  import 
penetration in terms of the structural differences between the two sectors, the scale of 
the  gap  observed  may  still  raise  concerns  about  the  existence  of  discriminatory 
practices  on  the  side  of  public  purchasers.  In  this  context,  Trionfetti  (2000)  argues 
that "if  the  import  share  of  government  is  persistently  and  substantially  lower  than 
the  import  share  of  the  private  economy,  it  is  likely  that  it  is  the  result  of  a 
discriminatory procurement practice (implicit or explicit)"147. 

146 
147 

Europe Economics (2006), Evaluation of Public Procurement Directives, London 2006, page 106. 
"Trade effects of discriminatory public procurement: a guide to measuring the degree of discrimination 
and  associated  budget  costs",  Federico  Trionfetti,  Centre  for  Economic  Performance,  The  London 
School  of  Economics  and  Political  Science,  Paper  prepared  for  the  International  Trade  Centre 
(February, 2000). 

EN 

127 

   EN 

 
                                                 
8.3.4.3.  Reluctance to bid cross-border amongst firms 

As mentioned previously, procurement contracts awarded directly across borders are 
still limited (3.5% in value terms and 1.6% in the number of transactions). This can 
be explained by both supply and demand factors. Previous section explained that low 
levels of import penetration may be due to the composition of public demand, which 
is dominated by services that are sourced locally. On the supply side, recent survey 
data shows that companies are also reluctant to tender cross-border. In a recent large 
scale survey around 73% of firms, otherwise active in public procurement, said that 
they have not made any cross-border tenders in the last three years (ref. Figure 24). 
The  fact  that  the  average  success  rate  when  bidding  abroad  is  lower  than  when 
bidding at home may go some way to explain this behaviour. 

Figure 24): Participation in cross-border tenders – survey of firms  

> than 20
times

10 to 20
times

5 to 10 times

1 to 5 times

never

6.4

10.9

5.3

6
4.9

7

11.1

76.1

72.3

participation overall
participation abroad

0

20

40

60

80

Source: Rambøll study 

Asked  about  the  reasons  for  this  low  level  of  participation  in  cross-border 
procurement,  the  major  reason  given  appears  to  be  simple  inertia:  61%  of 
respondents  identified  their  general  lack  of  experience  in  doing  business  abroad.  It 
would appear that most firms do not bid for cross border procurement opportunities 
simply  because  thy  have  not  done  so  before  (see:  Figure  25)  below).  The  second 
major obstacle identified was language barriers. Further confirmation that language 
matters,  comes  from  the  analysis  of  contract  awards  by  country.  An  econometric 
analysis of contracts awarded between 2007 - 2009 shows a relationship between the 
existence  of  common  language  borders  and  the  chance  of  awarding  a  contract  to  a 
foreign  firm  i.e.  confirming  that  the  probability  of  direct  cross-border  procurement 
award  in  a  country  that  shares  a  language  with  another  MS  is  significantly  higher 
than  in  MS  with  a  different  language  (by  21.3%).  Indeed,  the  analysis  of  contracts 
published in OJ/ TED confirms that common language helps, as 75% of the contracts 
awarded directly cross-border by Irish authorities are awarded to firms from the UK. 
84% of direct cross-border awards made by Austrian authorities are concluded with 
businesses  from  Germany148.  Legal  requirements  leading  to  market  entry  barriers 

148 

Rambøll study, page 79.  

EN 

128 

   EN 

 
 
                                                 
were  named  as  the  fourth  most  important  obstacle  (only  28%  of  firms  do  not  rank 
this problem high). 

Figure 25): Business' view on several possible obstacles to cross-border bidding 

Based on your experience, how do  you assess the relevance  of  the f ollowing  possible  obstacles?

Lack of  experience  with  doing  business  abroad

61.3

27.1

5.1

6.5

0%

20%

40%

60%

80%

100%

Language  barriers

50.3

24.4

13.1

12.3

High  extent  of  competition  with  national  bidders

48.6

26.5

15.3

9.5

Legal requirements  leading  to market entry barriers 
in the awarding  country  (e.g. special  allowances 
necessary f or of f ering services abroad)

47.6

23.9

9.9

18.6

Cost level  in  general  higher  at home than  abroad 
(e.g. because of  labour  costs etc.)

36.6

29.9

16.9

16.6

Resources necessary f or participating  in cross-border 
tender procedures higher  compared to procedures in 
home country

34.6

26.6

20.4

18.4

Unf amiliar f ormal requirements  demanded  (e.g. 
certif icates to provide, etc.)

34.2

28.9

18.9

18.1

Risks imposed  by possible  currency exchange  rate 
f luctuations

32.5

25.9

21.1

20.5

Additional  costs due to geographic  distance,  i.e. 
implementation  of  contract more costly  compared to 
delivery close to own location

Dif f erent kinds of  technical  specif ications  that are 
demanded compared to experiences in  your own 
Member State (e.g. dif f erent IT  standards and  the 
like)

24.9

40.4

17.9

16.8

24.5

35.2

14.9

25.5

Tax or social  insurance  dif f erences leading  to cost 
disadvantages

24.0

35.1

21.8

19.1

To a high  extent

To a medium  extent

To a low extent

Not at all

N = between  260  and 274

Source: Rambøll study 

Although risks related with currency exchange rates are only ranked as the sixth most 
important obstacle, their general importance should not be overlooked. Participation 
in  the  Euro  area  has  been  identified,  in  a  separate  exercise,  as  an  important  factor 
facilitating  direct  cross-border  procurement  (being  a  member  of  the  euro  area 
enhances the chances of a contract to be concluded cross-border by 97.1%149). This 
shows that a common currency matters even more than a common language.  

In order to investigate the issue of reluctance to bid cross border in greater detail the 
Commission  conducted  a  separate  survey  using  the  European  Business  Test  Panel 
(EBTP).150  This  (smaller)  complementary  survey  concentrated  on  the  reasons  why 

149 
150 

Rambøll study, page 79. 
http://ec.europa.eu/yourvoice/ebtp/consultations/2011/cross-border-public-procurement/index_en.htm 

EN 

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   EN 

 
 
                                                 
firms did not bid cross border and shows that administrative obstacles have a major 
negative impact on firms (43% of firms which had competed for cross border public 
contracts  found  that  country-specific  formal  requirements  were  a  major  obstacle  in 
cross-border procurement). 

The results of the evaluation confirm that direct cross-border participation on public 
procurement markets remains low. As a result, the direct cross-border success rate is 
also low. This is driven by various entry barriers that still exist on the markets and 
deter  firms  from  participating  in  invitations  to  tender  in  other  MS.  The  identified 
entry  barriers  can  be  principally  grouped  into  natural  ones  (such  as  languages  or 
geographic distance, the very nature of public sector markets) and regulatory. Within 
the  regulatory  barriers  mentioned  by  companies,  some  of  them  stem  from  the 
Directives, but many other are driven by legal provisions stemming from other legal 
acts  (such  as  tax  or  social  security  insurance  differences  leading  to  cost 
disadvantages).  A  frequently  repeated  regulatory  barrier  is  linked  to  the  mutual 
recognition of standards or certificates (including certificates or documents that need 
to be provided while submitting offers).  

8.3.4.4.  Market access barriers (SMEs in particular) 

Questions are frequently asked about the proportion of public procurement which is 
awarded to SMEs. A recent study estimated that between 2006 and 2008, SMEs won 
between  58%  and  61%  of  above  threshold  public  contracts,  representing  between 
31%  and  38%  of  the  total  value  of  all  contracts151.  There  is  a  significant  variation 
across  MS,  ranging  from  countries  where  SMEs  won  79%  of  contracts  (in  value 
terms) to MS where this proportion is 17%152 (ref. Figure 26 below). 

151 
152 

Source: GHK study, page 22. 
The  results  reveal  structural  differences  across  MS  –  as  a  general  trend  SMEs  are  more  dominant  in 
smaller countries. 7 of the 8 MS with populations below 5 million are positioned in the top half of the 
table when arranged by the share SMEs win. From amongst the six largest MS, only France falls into 
this category. 

EN 

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Figure 26): Share of SMEs in the total value of contracts awarded, by MS (total for 2006-2008) 

0

20

BG

16

LV

5

11

40

79

47

33

62

62

MT

7

25

29

28

33

25

53

52

LU

12

13

GR

15

4

16

49

47

21

19

EE

HU

7

8

SK

7

17

47

45

LT

4

6

35

DK

5

21

45

44

23

19

FR

SI

7

7

IE

3

14

18

18

16

43

43

43

21

26

NL

5

14

23

60

80

100

30

21

38

38

47

48

51

53

53

55

55

56

57

57

57

0

20

41

DE

SE

7

7

BE

11

16

19

41

19

39

7
37

15

21

FI

6

14

17

35

IT

6

11

18

34

AT

5

11

17

34

CY

4

17

13

34

EU-27

6

11

17

31

RO

3

13

15

30

PL

3

10

16

GB

6

24

13

5
22

PT

4

6

12

ES

3

22

12

6
17

CZ

1

6

10

40

60

80

100

59

59

61

63

65

66

66

66

69

70

76

78

78

83

Micro

Small Medium Large

Micro

Small Medium Large

Source: GHK  

The study concluded that overall the share of SMEs in winning public procurement 
contracts has not changed significantly, since 2002, although it noted an increase in 
the proportion of successful SMEs in 2008. 

The  size  of  contracts  is  the  major  barrier  to  SMEs  participation:  they  do  not  have 
access to the resources or capacity to bid for or fulfil large public contracts. Contracts 
above  €300,000  appear  to  be  generally  beyond  their  capacity.  However  it  is  also 
clear that when larger  procurement  projects are subdivided into smaller lots, SMEs 
are more likely to win contracts for the individual lots.  

Without judging whether or not the SMEs are or are not disadvantaged in above EU 
threshold public procurement, the same study points out however that SMEs face a 
number of barriers in accessing public procurement markets.  

Replies  form  a  recent  survey  of  887  companies  from  19  MS  shows  that  the  most 
frequently  encountered  barrier  is  the  over-emphasis  on  price  (54%  of  companies 
experienced it ‘always’ or ‘often’). This is followed by unfavourable (i.e. too long) 
payment terms (40%) and late payments (38%). And excessive administrative burden 

EN 

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is  also  seen  as  an  often-occurring  problem  (34%  of  companies  experienced  it 
‘always’ or ‘often’), and many companies also complain about unclear requirements 
set  out  by  public  authorities  (30%).  The  least  frequently  mentioned  obstacles  to 
procurement  are  too  large  contract  values  (7%)  and  that  joint  fulfilment  of 
requirements by members of the consortium is not allowed by the procurer (5%)153. 

Table  24):  Problems  faced  by  bidders  in  accessing  public  procurement  markets,  by  company  size  class 
(proportion of companies using the source 'always' or 'often', in percentage) 

 Potential problems 

Micro 

Small  Medium  Large  Total 

Over-emphasis on price 

Long payment terms 

Late payments 

No debriefing 

Administrative burden 

Lack of clarity 

Limited 
interaction 

options 

for 

Disproportionate 
criteria 

financial 

Insufficient time to bid 

Lack  of 
opportunities 

information  on 

Tenders 
fairly 

not 

evaluated 

Disproportionate 
criteria 

technical 

Large contract value 

58 

52 

47 

43 

45 

38 

30 

34 

27 

23 

16 

18 

22 

Joint  fulfilment  of  criteria 
not allowed 

8 

55 

42 

36 

36 

34 

28 

51 

38 

39 

33 

35 

29 

55 

36 

35 

36 

30 

28 

54 

40 

38 

36 

34 

30 

23 

19 

22 

23 

21 

23 

18 

14 

17 

20 

20 

20 

22 

18 

17 

19 

14 

26 

30 

19 

18 

15 

5 

14 

13 

15 

5 

6 

1 

4 

7 

5 

Source: GHK study 

153 

GHK study, page 50. 

EN 

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8.3.4.5.  Conclusions 

To  summarise,  the  current  data  reveal  that  the  full  potential  for  opening-up  public 
procurement to EU-wide competition is not being realised as the direct cross-border 
procurement remains at relatively low levels and SMEs participation remains lower 
than their importance in the economy. This means that public procurement markets 
remain serviced mainly by national or large-size suppliers and that important market 
entry barriers remain despite the existence of the Directives.  

8.3.5.  Problem drivers in Governance 

PROBLEM  DRIVER:  Different  administrative  models  across  MS  leading  to  different  public  procurement 
capacities in the EU and different capabilities of CAEs 

In  their  current  form,  the  public  procurement  directives  do  not  contain  any 
instructions to MS on how to organise their individual public procurement capacity 
and resources. This has, quite naturally, led to a range of very different set-ups and 
abilities  being  developed.  Administration  is  often  organised  in  several  layers  – 
sometimes  reflecting  the  national/regional/local  divisions,  other  times  devolving 
responsibilities  across  different  (generally  central)  government  departments.  Most 
MS have a national central body dealing with procurement which is responsible for 
managing public procurement. As the evaluation notes: "The national legal basis for 
these  bodies,  the  hierarchical  lines  of  subordination  and  the  functions  that  such 
bodies are empowered with vary considerably across MS." 

8.3.5.1.  Differences in national organisation of public procurement 

According to a 2007 Sigma paper154 (no. 40) the main public procurement functions 
can  be  grouped  under  the  following  headings:  drafting  legislation  (implementing 
relevant EU Directives and in some instances, national legislation related to areas not 
covered  by  said  EU  legislation);  monitoring;  control;  international  relations; 
guidance and support; publication; information provision. Sometimes these functions 
may  overlap,  again  depending  on  the  set-up  that  has  been  put  in  place.  Generally 
these  functions  are  held  by  the  national  central  body  dealing  with  procurement  but 
they  could  also  be  located  in  other  institutions  (e.g.  the  Ministry  of  Economy, 
Ministry of Finance, etc).  

The  same  study  grouped  MS  subject  to  the  study  into  three  categories:  centralised, 
semi-centralised  and  decentralised,  depending  on  the  concentration  of  procurement 
functions  held  by  their  respective  institutions.  MS  with  a  centralised  procurement 
structure155  have  their  procurement  functions  allocated  to  one  or  two  central 
institutions.  MS  with  a  semi-centralised  structure156  are  characterised  by  a  mixed 
concentration  of  procurement  functions  allocated  to  a  limited  range  of  institutions 
placed  at  various  levels  in  the  administration.  Finally,  the  MS  with  a  decentralised 

154 

155 

156 

EN 

No.:40, 

Central Public Procurement Structures and Capacity in Member States of the European Union, 01 Jan 
2007, 
http://www.oecd-
ilibrary.org/docserver/download/fulltext/5kml60qdqq0n.pdf?expires=1312366990&id=id&accname=gu
est&checksum=E536400B8F5226F16E6CCEB01EFE79F3 
Bulgaria,  Cyprus,  Czech  Republic,  Estonia,  Hungary,  Latvia,  Lithuania,  Malta,  Poland,  Romania, 
Slovakia. 
Austria, France, Germany, Ireland, Italy, Luxembourg, Slovenia, Sweden, the United Kingdom. 

available 

at: 

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procurement  structure157  have  a  dispersed  concentration  of  procurement  functions 
allocated to several institutions at various levels in their administrations.  

At  least  eight  countries158  have  also  introduced  additional  supporting  bodies  which 
provide  guidance  and  support  relating  to  national  public  procurement  policy  and 
processes.  Many  MS  also  have  distinct  internal  or  external  structures  tasked  with 
supervising  and/or  controlling  the  public  procurement  system.  Most  of  the  time, 
control  is  exercised  by  a  national  audit  body  (i.e.  Court  of  Auditors  or  State  Audit 
Office). Some of the newer MS have created specialised bodies within government to 
oversee  supervision  and  control.  Only  Italy  has  taken  advantage  of  the  provisions 
contained  in  Article  81  of  the  Classic  Directive  and  Article  72  of  the  Utilities 
Directive  and  established  an  independent  Authority  for  the  Supervision  of  Public 
Contracts (covering central and sub-central procurement).  

Differences  in  organisation  of  public  procurement  across  MS  are  present  in  many 
areas. For example the CPB was included in the 2004 Directives as an option, which 
with  few  exceptions159  most  MS  have  implemented.  As  with  e-procurement,  the 
implementation of a legal option does not always lead to availability and use160. On 
the other hand, other different arrangements for buying on behalf of other CAE have 
also been put in place, which are not necessarily considered CPBs in the sense of the 
Directives161. 

Moreover, while most MS have established CPBs, it is only the central government 
authorities'  administrations  which  are  obliged  to  use  it.  Other  bodies  may  also  be 
encouraged  to  use  it  but  they  are  also  permitted  to  establish  other  purchasing 
agreements.  There  is  also  a  problem  of  insufficient  coordination  of  centralised 
purchasing at the MS level. 

The  risks  of  this  situation  are  perhaps  best  summarised  by  the  2010  OECD  policy 
roundtable  on  Collusion  and  Corruption  in  Public  Procurement162:  "Public 
procurement frequently involves large, high value, projects, which present attractive 
opportunities  for  collusion  and  corruption.  Regulatory  requirements  dictating 
particular  procurement  procedures  can  render  the  process  excessively  predictable, 
creating  opportunities  for  collusion.  [….]  Finally  the  sheer  quantity  of  goods  and 
services that are contracted by the State creates monitoring difficulties and increases 
the  likelihood  that  the  public  procurement  process  may  fall  prey  to  collusion  or 
corruption." 

8.3.5.2.  Different capabilities of CAEs  

The  Commission  estimates  that  there  are  250,000  plus  CAEs  conducting  public 
procurement,  with  extremely  varied  budgets  at  their  disposal  and  very  different 

157 
158 
159 
160 

161 

162 

Finland, Portugal. 
Belgium, Germany, France, the Netherlands, Austria, Portugal, Spain, Finland. 
Belgium, Germany, Estonia, Luxembourg. 
Bulgaria, Greece, Cyprus, Latvia, Luxembourg, the Netherlands, Poland, Romania, Slovenia, Slovakia 
and Finland do not have a CPB established. Romania and Slovenia have however a CPB planned. 
BE, DE, EE, LU do not opted to transpose the CPB in their national legislation, however, more than 5% 
of the CN published indicate purchasing on behalf of others. 
See:  Policy  Roundtables,  Collusion  and  corruption  in  public  procurement,  2010,  OECD  paper 
http://www.oecd.org/dataoecd/35/16/46235399.pdf 

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levels  of  buying  experience.  These  range  from  very  large,  centralised  buyers  to 
procurers for small towns or fire stations who rarely, if ever need to make purchases 
which  fall  under  the  EU  rules.  Often  procurers  for  these  organisations  are  not 
professionals – they have limited training and experience and procurement is but one 
of  several  tasks  they  fulfil.  Procurement  rules  are  generally  set  out  in  guidance 
documents, and often practitioners will not know where the rules originate. They will 
not necessarily know about the EU or national legislation but when they do, they are 
often  driven  to  adopt  risk  averse  procedures,  which  may  lead  to  sub-optimal 
outcomes, out of fear of the consequences of non-compliance. As mentioned earlier, 
the costs associated with pre-empting or addressing litigation are important elements 
in the calculation of cost efficiency of procurement. A recent survey, estimates that 
around  25%  of  the  purchasers  responding  incurred  some  litigation  costs  when 
concluding contracts with values above the EU thresholds.  

Confronted with the complex challenges implied by public procurement policy, some 
(generally  smaller  and  newer)  MS  (e.g.  Slovenia,  Lithuania,  Portugal)  have 
established  well  resourced  central  procurement  organisations,  able  to  provide 
training  and  advice  to  individual  CAEs.  Other  Member  States  have  dispersed 
responsibility  for  the  organisation  of  public  procurement  procedures  across  myriad 
CAEs who are often poorly resourced. This context is ripe for administrative error, 
and inconstant application of the principles and provisions of EU law. The limited of 
professional procurement training and advice in many countries may have resulted in 
errors, an increased risk of fraud and a less than optimal management of resources, 
which  would  leave  considerable  scope  for  further  cost  efficiency  savings.  Recent 
audits  of  projects  funded  by  community  funds  have  found  around  40%  error  rates 
due to the wrong application of public procurement rules and in some instances, the 
incorrect  transposition  of  the  Directives  into  national  legislation.  According  to  the 
European Court of Auditors' annual report for the financial year 2009  

"The  non-respect  of  public  procurement  rules  alone  accounts  for  43%  of  all 
quantifiable errors and makes up for approximately three quarters of the estimated 
error rate [for the Structural Funds]". 

8.3.5.3.  Risks of errors in application 

Recent audits of public procurement projects financed at least in part by community 
funds e.g. European Regional Development Funds (ERDF), Cohesion Funds (CF) or 
Structural Funds (SF) have found significant error rates due to the wrong application 
of public procurement rules and in some instances, the incorrect transposition of EU 
Directives into national legislation. Such errors account for around 40% of the audit 
findings for ERDF and CF projects (based on DG REGIO audits in the programming 
periods 2000-2006 and 2007-2013) and makes up for approximately three quarters of 
the  estimated  error  rate  for  the  SF  (2009  annual  report  of  European  Court  of 
Auditors). As a result, over half the decisions enforcing financial corrections refer to 
public  procurement.  The  budgets  for  these  funds  are  significant:  €347  billion  has 
been allocated to regional and cohesion policy over 2007-13. This represents nearly 
36% of the total EU budget for that period and averages out at around €49 billion per 
year.  Since  all  cohesion  policy  programmes  are  co-financed  by  the  member 
countries,  total  available  funding  is  nearer  €700  billion  –  much  of  which  will  be 
allocated via public procurement procedures. 

EN 

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the  operational  programme;  a  certifying  authority,  which  has 

In  the  context  of  structural  funds,  according  to  the  applicable  rules163  the  MS 
receiving  the  funds  have  to  set  up  a  dedicated  administrative  structure  for 
management,  monitoring  and  controls.  Having  a  compliant  administrative  structure 
in  place  is  a  pre-condition  for  receiving  actual  payments  from  the  EU  budget.  The 
structure  is  composed  of  a  managing  authority  which  is  the  body  designated  to 
manage 
the 
responsibility  to  certify  statements  of  expenditure  and  applications  for  payment 
before  they  are  sent  to  the  Commission;  and  an  audit  authority  which  is  a  body 
independent of the first two and is responsible for verifying the effective functioning 
of  the  management  and  control  system.  Given  that  operating  under  these  strict 
conditions, the error rate due to the misapplication of public procurement rules was 
40%,  it  could  be  argued  that  the  error  rate  would  be  even  higher  in  the  absence  of 
such  structures,  as  is  frequently  the  case  for  the  majority  of  public  procurement 
contracts164. For example a quick analysis of the contract award notices published in 
TED  in  2009  showed  that  21%  of  all  notices  did  not  include  price  information  (an 
obligatory field) and hence were non compliant, while for EU funded projects only 
5%  of  notices  were  non-compliant  from  this  point  of  view.  Similar  figures  are 
observed for 2010 (22% of all contract award notices were non compliant, while in 
case of EU funded projects the figure was 6%). 

Three major groups of weaknesses were identified by the DG REGIO audits: 

•  Inadequate assessment of bids; 

•  Absence  of  tendering  or  award  of  contract  based  on  inappropriate  tendering 

procedure and award of supplementary contracts without competition; and 

•  Non-compliance with publication requirements. 

identifies 

the  same  range  of 

An analysis of the infringement procedures launched by the Commission from 2005 
onwards165  also 
issues  and  errors  regarding 
implementation  of  procurement  policy.  Apart  for  the  general  provisions  on 
infringements  proceedings  and  the  control  of  transpositions  the  Commission  (DG 
MARKT) has no specific legal basis for other systematic controls of implementation 
(like DG REGIO has in relation to Structural Funds implementation or DG COMP 
has  to  undertake  market  investigations  in  relation  to  merger  controls  and  antitrust 
policy).  

In  conclusion,  certain  areas  have  been  identified  where  it  is  clear  that  there  are 
problems in the national application of public procurement law and existing controls 
are  not  sufficient  to  address  them.  The  evidence  from  Commission  audits  and 
analysis  of  infringements  shows  that  these  are  not  one-off  incidents  but  occur 
repeatedly.  Whilst  it  is  not  possible  to  estimate  the  error  rates  across  the  wider 
population  of  public  procurement  contracts,  it  is  extremely  unlikely  that  the  errors 

163 

164 

165 

Council  Regulation  (EC)  No  1083/2006  of  11 July  2006  laying  down  general  provisions  on  the 
European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing 
Regulation (EC) No 1260/1999 , OJ L 210 , 31/07/2006 p. 0025 – 0078. 
Unfortunately the different number and nature of audit results make any useful statistical comparison of 
MS difficult. 
See: the Evaluation Report, pages 50-52. 

EN 

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and  high  error  rates  identified  by  the  Commission's  audits  are  limited  only  to  the 
application  of  cohesion  policy  projects.  The  analysis  of  infringements,  which 
covered this wider population, showed similar problems. 

8.3.5.4.  Difference in monitoring arrangements 

Other  aspects  of  the  evaluation  showed  that  it  is  often  difficult  to  assess  whether 
particular public procurement or wider strategic goals are being achieved, since there 
is  no  systematic  or  consistent  monitoring  of  these  actions  at  national  level. 
Monitoring at both national and EU level is important as it allows policy makers to 
track  progress  against  objectives  and  either  identify  areas  for  further  action  in  a 
timely manner, before a problem becomes severe or to identify areas of good practice 
and success which could be shared with other interested parties. Although the current 
Directives  require  MS  to  provide  certain  information  to  the  Commission  annually, 
this information is limited in scope and does not cover all the relevant policy areas. 
The  expected  uptake  of  e-procurement,  which  could  systematically  improve 
monitoring and audibility capacities due to the automatic registration of key data for 
all  transactions  has  not  yet  occurred.  Monitoring  arrangements  differ  widely  from 
country to country.  

8.3.5.5.  Integrity of public procurement  

All  stakeholder  groups  replying  to  the  GP  recognise  that  procurement  markets  are 
exposed  to  risks  of  favouritism  and  corruption.  However,  most  stakeholders 
(excluding  academic/legal  experts)  believe that  the  integrity  of  procurement  should 
be addressed through national rather than EU legislation.  

At present the EU rules do not cover the issue of conflicts of interest166. However, as 
pointed out by ECJ case law conflict of interests constitutes objectively and by itself 
serious irregularities regardless of the parties involved and whether they were acting 
in good or bad faith167. Again, CAE and MS considering that national legislation in 
this area is sufficient. A majority of business, civil society and legal experts would 
support a common European definition of "conflict of interest" and the introduction 
of certain minimum safeguards.168 

MS  and  the  general  public  (Eurobarometer,  2011)  recognise  that  the  current  EU 
public procurement directives have done much to address and limit the occurrence of 
collusion  and  corruption.  However,  this  is  no  reason  to  be  complacent  –  there  is 
significant room to improve the current systems put in place to monitor application, 
enforce the rules and control for errors when conducting public procurement.  

Several  overall  estimates,  as  well  as  specific  studies  covering  certain  corruption  in 
certain MS or certain sectors are available; however, the exact cost of corruption in 
public procurement cannot be easily calculated or extrapolated across EU. 

166 

167 
168 

The notion of conflict of interest is the situation where persons involved in the contract award decision 
have  competing  professional  or  personal  obligations  or  personal  or  financial  interests  which  would 
make it difficult for them to fulfil their duties fairly and impartially, or where a person is in a position to 
influence the decision making of the contracting authority, in order to fulfil its own interest. 
See: judgement of 16.6.1999 , Case T-277:97Ismeri Europa Srl v Courts of Auditors. 
Responses to questions 98-103 of the GP. 

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In  a  recent  impact  assessment  carried out  by  DG  HOME  for  the  EU  anticorruption 
package estimated that although globally the cost of corruption is estimated at 5% of 
GDP:  "[…]  it  has  been  estimated  that  the  costs  of  corruption  in  the  EU  amount  to 
around 1% of EU GDP". 

It  is  clear  that  only  a  small  percentage  can  be  attributed  to  public  procurement, 
however,  the  same  impact  assessment  stated  that  in  Bulgaria:  "It  is  thus  estimated 
that the cost of organised public procurement corruption in terms of fiscal and public 
welfare  loss  ranges  between  25  –  30%  of  the  public  procurement  market.  This 
suggests  0.7  billion  euro  losses  due  to  public  procurement  misappropriations  in 
2007–2008".  

Addressing these errors and the risk of fraud is important – the evaluation has shown 
that  following  the  rules  and  principles  set  out  by  the  EU  Directives  translates  into 
savings  for  the  procurer  –  which  will  be  foregone  under  the  practices  identified 
above.  Not  only  does  public  procurement  become  more  expensive  and  inefficient, 
resulting in an immediate cost to society, but there may be other missed opportunities 
as the possibility to address other strategic issues and progress towards wider societal 
goals is also negatively affected. 

8.3.5.6.  Conclusions 

Significant differences in the administrative organisation put in place by MS have led 
to inconsistent application, control and monitoring across the EU. This has resulted 
in errors, an increased risk of fraud and a less than optimal management of resources.  

8.4. 

ANNEX 4 – Summary table linking objectives with problems 

The  table  presented  overleaf  shows  the  mapping  between  the  problems  and 
objectives  identified  for  this  impact  assessment.  In  particular,  it  shows  that  the 
problem  of  missed  opportunities  can  be  linked  to  the  drivers  for  all  five  problem 
areas,  whilst  the  insufficient  cost  efficiency  is  related  to  the  problem  drivers  for 
governance,  scope  and  procedures  (cells  in  table  bordered  by  a  dotted  line).  The 
national  markets  are  being  caused  by  drivers  linked  to  the  areas  of  governance, 
strategic and access (cells shaded in grey). 

EN 

138 

   EN 

 
General problem/result: The internal market is not achieving its full potential for public procurement 
General objectives: 

–  Promote EU-wide competition for contracts (i.e. fair, non-discriminatory and level playing field for all suppliers, ensuring EU markets accessible to all EU firms) 
–  Deliver best value for money whilst achieving the best possible procurement outcomes for society (and hence, ultimately, making best use of tax payers' money) 
–  Aid the fight against corruption 

Problems : Specific objective 

Problem = Missed opportunities for 
society 

Specific objective =Take full advantage 
of all opportunities to deliver the best 
possible outcomes for society  

Problem = Sub-optimal cost efficiency of 
public procurement leading to best value 
for money not being achieved 

Specific objective = Improve the cost-
efficiency of EU public procurement rules 
and procedures 

Problem = National rather than EU 
public procurement markets 

Specific objective = Create European 
rather than national markets for 
procurement 

Operational objectives 
a)  ensure  rules  capture  the  appropriate  actors  and 
subject-matter of procurement 

b) provide clarity and legal certainty with respect to said 
scope and coverage 
a) streamline and simplify procurement procedures to (i) 
reduce  operational  costs  (ii)  ensure  proportionality  and 
(iii) provide for more legal certainty 

b)  improve  the  flexibility  of  procedures  to  better 
respond to purchasing needs of authorities 
a) ensure consistent application, controls and monitoring 
of public procurement policy and outcomes across MS 

b)  reduce  errors  and  problems  in  complying  with  EU 
public procurement rules 
a)  help  public  procurers  to  use  public  procurement  to 
support  other  policy  objectives  in  a  legally  compliant 
and fair manner 

a)  simplify  the  rules  and  introduce  instruments  to 
increase  the  transparency  of  EU  public  procurement, 
opening up markets to more cross-border competition 

b)  ensure  that  the  rules  promote  and  support  SME 
participation 

Problem drivers 
Scope: 
Complex  rules  defining  scope 
and coverage 

Procedures: 
Disproportionate  and  inflexible 
procedures  

Governance: 
Different  administrative  models 
and capacities across EU 

Strategic: 
insufficient 
Uncertainty  & 
provisions  w.r.t.  integration  of 
strategic goals  

Access: 

Market  access  barriers:  natural 
and regulatory 

EN 

139 

EN 

 
  
 
 
8.5. 

ANNEX 5 – Long list of proposals considered before defining Options169 

Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Introduction of additional 
measures to foster SME 
participation in public 
procurement through 
increased use of lots unders 
certain circumstances 

Alleviation of administrative 
burdens through self-
declarations with regard to 
evidence for exclusion and 
selection criteria; winning 
bidder then provides evidence 

3 

4 

Hi 

Opinions divided 

Market access barriers;  
Disproportionate 
procedures 

ACC.LEGI.FACILIT 

Hi 

Everybody in 
favour 

Disproportionate 
procedures; Inflexible 
procedures; Market access 
barriers 

ACC.LEGI.FACILIT 

169 

170 

EN 

During the drafting of proposals and internal consultation processes, several of the actions originally identified in this table were discarded. Where these actions fall within 
the options which form the preferred solution presented under this IA, they are highlighted in italics.  
1 = low market size and low transaction impact; 5 = high market size and high transaction impact. 

140 

EN 

 
  
                                                 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Revise standard forms to 
reduce information 
requirements on CAEs 

(Optional) instruments to 
encourage pro-competitive 
procurement strategies  

Improve mutual recognition of 
certificates, e.g. through 
greater use of e-Certis 

5 

2 

3 

Hi 

General support 

Disproportionate 
procedures; Market access 
barriers;  
Inflexible procedures 

ACC.LEGI.FACILIT 

Med 

Mixed opinions, 
business slightly 
in favour, CAEs 
slightly against 

Inflexible procedures; 
Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; Legal 
uncertainty 

ACC.LEGI.FACILIT 
(discarded) 

Hi 

Support 

Disproportionate 
procedures; Market access 
barriers;  
Lack of clarity; Legal 
uncertainty 

ACC.LEGI.FACILIT 

EN 

141 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Measures to foster the 
innovation capacity of SMEs  

2 

Med 

Legislative rules limiting 
excessively strict turnover 
requirements for proving 
financial capacity (to facilitate 
SMEs access) 

2 

Med 

Stakeholder 
views  

Some support, 
but solutions 
proposed often 
outside public 
procurement 
legislation (e.g. 
financial support 
through 
subsidies) 
Vast majority 
agrees that 
excessively strict 
turnover 
requirements are 
a problem for 
SMEs. Less 
unanimous 
reaction to EU 
level turnover 
cap. 

Link to problem driver(s) 

Option action assigned to 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

ACC.LEGI.FACILIT 

Disproportionate 
procedures;  

Inflexible procedures;  

Market access barriers 

ACC.LEGI.FACILIT  

EN 

142 

EN 

 
  
 
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Introduction of a European 
public procurement passport 

List of possible requirements 
for selection of candidates 
made exhaustive  

Introduction of additional 
measures to foster SME 
participation in public 
procurement through use of 
quotas 

Impose mandatory use of lots 
for all contracts  

4 

3 

3 

5 

Hi 

Generally 
positive 

Market access barriers  

ACC.LEGI.FACILIT 

Med 

Neutral 

Market access barriers  

ACC.LEGI.FACILIT 

Hi 

(Question of 
quotas not 
explicitly asked 
in Green Paper 
because of doubts 
if legally 
possible) 

Market access barriers;  
Disproportionate 
procedures 

ACC.LEGI.ENFORC 

Med 

Generally against  Market access barriers 

ACC.LEGI.ENFORC 

EN 

143 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Obligation to subcontract a 
certain share of the main 
contract to third parties 

Obligation to draw up tender 
specifications for high-value 
contracts in a second language 

Instruments to prevent the 
development of dominant 
suppliers (e.g. obligation to 
annul the procedure if only 
one or two valid bids 
received) 

EU definition of conflict of 
interest in public procurement  

3 

2 

2 

2 

Med 

Mixed opinions 

Inflexible procedures; 
market access barriers;  

ACC.LEGI.ENFORC 

Lo 

Strong opposition 
from stakeholders 

Market access barriers 

ACC.LEGI.ENFORC 

Med 

(Green Paper 
replies not 
conclusive) 

Market access barriers  

ACC.LEGI.ENFORC 

Med 

Mixed opinions 

Complex rules defining 
scope and coverage; 
Different models across 
Member States 

GOV.LEGI.TARGET 

EN 

144 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

New organisation of CPBs 

4 

Hi 

Safeguards to prevent, 
identify and resolve conflict-
of-interest situations 

2 

Med 

Require Member States to 
improve knowledge sharing 
tools, assistance to CAEs and 
business, notably in cross-
border context (use of IMI) 

3 

Hi 

EN 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Different models leading to 
different public 
procurement capabilities 
being developed across 
Member States; 
Disproportionate 
procedures 

GOV.LEGI.TARGET 

Complex rules defining 
scope and coverage 

GOV.LEGI.TARGET 

Different models leading to 
different public 
procurement capabilities 
being developed across 
Member States; 
Disproportionate 
procedures 

GOV.LEGI.TARGET 

Neutral; 
tempered by 
concerns for 
SMES 

Support notably 
from business 
and Civil Society 
for minimum 
standards at EU 
level, contracting 
authorities and 
MS more 
sceptical 
Stakeholders 
strongly in favour 
of 
professionalizing 
public 
procurement 

145 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Additional instruments to 
tackle organised crime in 
public procurement 

2 

Med 

Designation of national bodies 
to control, monitor and 
supervise public procurement 
practice in Member States 
(with the tasks of monitoring 
structural problems + liaise 
with the Commission on this 
point + deal with problems in 
individual procedures/ 
complaints where necessary + 
annual implementation report) 

5 

Hi 

Stakeholder 
views  

No support for 
very dense and 
coercive rules 
w.r.t anti-
corruption 
safeguards, most 
stakeholders 
think this should 
be left to MS 
legislation 

No specific 
question asked in 
the GP, but in 
general strong 
overall support 
for 
professionalizing 
public 
procurement.  

Link to problem driver(s) 

Option action assigned to 

Lack of consistent 
application, controls and 
monitoring of public 
procurement outcomes 
across Member States 

GOV.LEGI.ENHANC 

Different models leading to 
different public 
procurement capabilities 
being developed across 
Member States;  

GOV.LEGI.ENHANC 

EN 

146 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Introduction of criminal 
sanctions for certain 
violations of public 
procurement rules 

Modify procedures by 
shortening time-limits 

Modify procedures to alleviate 
publication requirements 
(DPS, PIN) 

More flexible approach to the 
organisation and sequence of 
the examination of selection 
and award criteria, including 
allowing experience of staff to 
be taken into account in the 
award phase 

2 

4 

3 

3 

Med 

Stakeholders 
against 

Different models leading to 
different public 
procurement capabilities 
being developed across 
Member States;  

Med 

Broad support 
from CAEs; 
business sceptical 

Disproportionate 
procedures; Inflexible 
procedures 

Hi 

 Some support  

Disproportionate 
procedures; Inflexible 
procedures 

GOV.LEGI.ENHAN 
(discarded) 

PRO.LEGI.DESIGN 

PRO.LEGI.DESIGN 

Med 

Quite broad 
support 

Inflexible procedures 

PRO.LEGI.DESIGN 

EN 

147 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Allowing negative previous 
experience with one or several 
bidders to be taken into 
account. 

New rules to improve 
functioning of repetitive 
purchasing and aggregation 
techniques and structures 
(framework agreements, DPS, 
CPBs)  

Regulating the issue of 
substantial modifications of a 
contract while it is still in 
force 

3 

3 

3 

Med 

Broad support 

Inflexible procedures 

PRO.LEGI.DESIGN 

Hi 

Med 

Some support, 
tempered by 
concerns for 
SMES 

Disproportionate 
procedures; Inflexible 
procedures; Market access 
barriers 

PRO.LEGI.DESIGN 

Support for 
codification of 
case-law  

Lack of clarity 

PRO.LEGI.DESIGN 

EN 

148 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Introduce a rule that 
contracting authorities must 
have the possibility to 
terminate a contract e.g. after 
a ECJ judgement in an 
infringement case 

Stronger safeguards against 
anti-competitive behaviours in 
tender procedures, e.g. 
obligation to exclude bidders 
because of attempt of bid-
rigging in the procedure in 
question 

2 

Med 

Slight majority in 
favour  

Lack of clarity; Legal 
uncertainty 

PRO.LEGI.DESIGN 

2 

Med 

Mixed opinions 

Lack of clarity; Legal 
uncertainty; Market access 
barriers 

PRO.LEGI.DESIGN 

Rules concerning attribution 
of exclusive rights 

2 

Lo 

EN 

Replies to GP not 
entirely 
conclusive, but 
for majority the 
attribution of 
exclusive rights 
can jeopardize 
fair competition 

149 

Market access barriers  

PRO.LEGI.DESIGN 
(discarded) 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Rules concerning the 
attribution of contracts on the 
basis of exclusive rights 

Safeguards to tackle 
advantages of certain bidders 
because of their prior 
association with the design of 
the project 

Mandatory e-transmission of 
notices  

Full electronic availability of 
tender documents from the 
moment of publication of 
notice  

2 

2 

3 

3 

Lo 

Support from 
stakeholders 

Market access barriers  

PRO.LEGI.DESIGN 

Med 

Mixed opinions 

Disproportionate 
procedures; 
Inflexible procedures; 
Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

PRO.LEGI.DESIGN 

Med 

Med 

Already used at 
93% - general 
acceptance 

Disproportionate 
procedures 

PRO.LEGI.DESIGN 

General 
acceptance  

Disproportionate 
procedures 

PRO.LEGI.DESIGN 

EN 

150 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Allow Member States to go 
further in imposing e-
communication (clarify 
Member States ability to 
impose mandatory use) 

Clarify appropriate 
authentication and 
identification solutions – 
ensuring minimum standards 
and accessibility - for e-
procurement  

Fully electronic 
communication imposed for 
all (above threshold) 
procurement  

Generalise negotiated 
procedure  

4 

3 

5 

3 

Disproportionate 
procedures;  
Lack of certainty;  
Lack of clarity 

Disproportionate 
procedures; 
Lack of certainty;  
Lack of convergence 

PRO.LEGI.DESIGN 

PRO.LEGI.DESIGN  

Disproportionate 
procedures 

PRO.LEGI.FLEXIB 

Hi 

General support 

Hi 

General support 

Hi 

Slight majority in 
favour, but with 
caveats w.r.t. 
readiness and 
need to address 
existing 
challenge 

Hi 

Broad support 

Inflexible procedures 

PRO.LEGI.FLEXIB 

EN 

151 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Specific rules for procurement 
by sub-central authorities 
(publication facilities: PIN) 

Elimination of the lowest 
price only criterion 

Elimination of the lowest 
price only criterion for certain 
services 

4 

4 

3 

Hi 

Some support 

Complex rules defining 
scope and coverage; 
Disproportionate 
procedures;  

PRO.LEGI.FLEXIB 

Lo 

Lo 

Support from 
NGOs; CAs and 
MS strongly 
against 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; 
Market access barriers 

PRO.LEGI.FLEXIB 
(discarded) 

Some support 
from NGOs with 
regard to social 
services, other 
stakeholders 
rather sceptical 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; 

Market access barriers 

PRO.LEGI.FLEXIB 
(discarded) 

EN 

152 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Allow MS to eliminate the 
lowest price only criterion for 
social services  

Fully electronic 
communication imposed on 
CPBs  

Modifications to the 
distinction between A and B 
services. 

3 

3 

4 

Lo 

Questions not 
explicitly asked 
in the GP (see: 
above) 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; 

Market access barriers 

PRO.LEGI.FLEXIB 

Hi 

Not discussed 

Disproportionate 
procedures 

PRO.LEGI.FLEXIB 

Med 

(Some in favour, 
but diverging on 
what exactly they 
want) 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 

EN 

153 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Modifications to certain 
exclusions (update, clarify). 

3 

Lo 

Clarifications to definitions of 
certain procurers 

Legislative rules at EU level 
regarding the scope and 
criteria for exemption of 
public-public cooperation. 

4 

2 

Lo 

Med 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Majority in 
favour of keeping 
main concepts; 
some support for 
clarification 
according to 
case-law 

Majority in 
favour of keeping 
main concepts; 
some support for 
clarification 
according to 
case-law 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 

Support for 
codifying case-
law 

Lack of clarity;  
Complex rules defining 
scope and coverage  

SCO.LEGI.TARGET 

EN 

154 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Regulate other aspects of 
contract execution (e.g. issues 
of guarantees, liability, ..) 

3 

Med 

Specific features of social 
services taken more fully into 
account in EU public 
procurement legislation  

4 

Hi 

Stakeholder 
views  

No support from 
stakeholders – 
should be left to 
national contract 
law 

Support from 
CAEs, civil 
Society and 
social service 
providers in 
favour of taking 
into account 
specificities; 
business rather 
against171.  

Link to problem driver(s) 

Option action assigned to 

Lack of clarity;  
Complex rules defining 
scope and coverage; 
Inflexible procedures 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

Disproportionate 
procedures; 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 
(discarded) 

SCO.LEGI.TARGET 

171 

EN 

General line of those stakeholders in favour of special regime: they claim 1. more flexibility + 2. possibility for CAEs to give stronger focus on quality criteria (enabling 
approach) 

155 

EN 

 
  
 
 
                                                 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Specific features of social 
services taken more fully into 
account in EU public 
procurement legislation  
- higher threshold  

Specific features of social 
services taken more fully into 
account in EU public 
procurement legislation - very 
flexible procedures, leaving 
MS to define the procedures 
they think are useful, in full 
respect of principles of 
transparency and non-
discrimination  

4 

Hi 

4 

Hi 

Question of new 
threshold for 
social services 
not discussed in 
the GP 

Support from 
those 
stakeholders that 
are in favour of a 
specific regime 
for social 
services, see 
comment in 
general social 
services line  

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 
Disproportionate 
procedures; 
Complex rules defining 
scope and coverage 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 
Disproportionate 
procedures; 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 

SCO.LEGI.TARGET 

EN 

156 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Clarification of the 
exemptions for intra-group 
and joint-venture procurement 

Clarification and 
simplification of the 
procedure for examining 
requests for exemption for 
contracts awarded in 
sufficiently competitive 
markets (the current "Art. 30 
Decisions")  

2 

Med 

Opinions divided 

SCO.LEGI.TARGET 

Complex 
scope and coverage; 

rules  defining 

Lack of clarity 

2 

Med 

General support 

Complex 
scope and coverage;  

rules  defining 

Lack of clarity 

SCO.LEGI.TARGET 

EN 

157 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Targeted exclusion of 
procurement made for the 
purpose of exploring for oil 
and gas 

Specific features of social 
services taken more fully into 
account in EU public 
procurement legislation - 
ensure that CAEs can choose 
the service provider on the 
basis of quality criteria  

3 

Med 

Generally 
supported 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 

4 

Hi 

Support from 
those 
stakeholders that 
are in favour of a 
specific regime 
for social 
services, see 
comment in 
general social 
services line  

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 
Disproportionate 
procedures; 

Complex rules defining 
scope and coverage 

SCO.LEGI.TARGET 

EN 

158 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Specific features of social 
services taken more fully into 
account in EU public 
procurement legislation - 
impose on CA the taking into 
account of quality criteria  

4 

Hi 

Stakeholder 
views  

Question not 
asked in that 
detail in the 
Green Paper, but 
in general, strong 
opposition from 
CAEs and MS as 
regards 
mandatory EU 
obligations with 
regard to societal 
issues 

Med 

Broad support 

Obligation for MS to allow 
cross-border joint 
procurement and develop a 
conflict of laws rule to 
determine the applicable law 
and jurisdiction 
Radically modify the structure 
of the Directives by 
abandoning division into 
works /goods / services 

2 

5 

Link to problem driver(s) 

Option action assigned to 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; 
Disproportionate 
procedures; 

Complex rules defining 
scope and coverage 

Inflexible procedures;  
Market access barriers;  
Uncertainty & insufficient 
provisions w.r.t. integration 
of strategic goals 

SCO.LEGI.TARGET 
(discarded) 

SCO.LEGI.TARGET  

Med 

Mostly against 

Complex rules defining 
scope and coverage 

SCO.LEGI.REDUCE 

EN 

159 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Radically modify the material 
scope of the Directives by 
excluding sub-central 
authorities  

Radically modify the material 
scope of the Directives by 
exclusion of B services. 

Raise the thresholds 

Include the utilities in the 
Classic Directive 

4 

4 

5 

4 

Med 

Mostly against 

Complex rules defining 
scope and coverage 

SCO.LEGI.REDUCE 

Med 

(Mostly against) 

Complex rules defining 
scope and coverage 

SCO.LEGI.REDUCE 

Med 

Some strongly in 
favour (notably 
CAEs), others 
against (majority 
of business). MS 
divided. 

Med 

No support  

Complex rules defining 
scope and coverage 

SCO.LEGI.REDUCE 

Complex rules defining 
scope and coverage;  
Disproportionate 
procedures;  

SCO.LEGI.REDUCE 

EN 

160 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Exclude the utilities from 
procurement rules altogether 

Extending scope to below 
thresholds procurement 

Clarify the concept of LCC 
and explicitly allow the use  

Allow obligations on "what to 
buy" to be imposed at national 
level  

4 

4 

4 

3 

Lo 

No support  

Med 

No support 

Complex rules defining 
scope and coverage;  

Disproportionate 
procedures;  

Complex rules defining 
scope and coverage;  
Disproportionate 
procedures;  

SCO.LEGI.REDUCE 

SCO.LEGI.REDUCE 

Favourable 
opinion on 
concept of LCC 
from a lot of 
stakeholders; 
opinions split as 
to how far this 
should be 
mandatory 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.FACILIT 

Opposition from 
CAEs and 
business 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.FACILIT 
(discarded) 

Hi 

Med 

EN 

161 

EN 

 
  
 
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Incentives/measures to further 
promote and stimulate 
innovation through public 
procurement - Promote 
increased use of performance 
related technical 
specifications  
Incentives/measures to further 
promote and stimulate 
innovation through public 
procurement - Promote 
increased use of variants  

3 

2 

Med 

Stakeholders 
sceptical 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; Inflexible 
procedures 

STR.LEGI.FACILIT 

Med 

Question not 
explicitly asked 
in Green Paper - 
no statistics 
available 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.FACILIT 

EN 

162 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

New procedure to 
support/foster use of 
innovation (Innovation 
partnership) 

4 

Med 

Probably quite 
broad support 
(Question not 
asked, but 
stakeholders have 
identified a need 
for improving 
innovation-
friendliness, 
support for the 
elements 
resembled in the 
new procedure 
can be deducted 
from replies to 
the GP 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals;  
Inflexible procedures 

STR.LEGI.FACILIT 

Improve functioning of 
competitive dialogue notably 
through better protection of 
creative solutions  

3 

Med 

Strong support 
from business 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; Inflexible 
procedures 

STR.LEGI.FACILIT 

EN 

163 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Possibility for contracting 
authorities to explicitly 
require certain labels 
(certification schemes), but 
safeguard that equivalent 
labels must also be accepted 

Violation of obligations from 
EU environmental or social 
law or from certain 
international labour law 
provisions = ground for 
exclusion of bidders 

Tenders which are abnormally 
low because of non-
compliance with obligations 
from EU environmental or 
social law, including 
throughout the supply chain, 
must be rejected 

2 

2 

Med 

Med 

2 

Med 

EN 

Link to problem driver(s) 

Option action assigned to 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.FACILIT 

 Uncertainty and 
insufficient provisions w.r.t. 
integration of strategic 
goals 

STR.LEGI.FACILIT 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.FACILIT 

Stakeholder 
views  

Question not 
explicitly asked 
in Green Paper - 
no statistics 
available 

Question not 
explicitly asked 
in Green Paper - 
no statistics 
available (some 
support) 

Question not 
explicitly asked 
in Green Paper - 
no statistics 
available (some 
support) 

164 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Allow inclusion of factors 
directly linked to production 
processes in award criteria 
and technical specifications 

Require CAEs to use certain 
defined award criteria and / or 
technical specifications 

Permitting restriction to local 
or regional suppliers  
- in specific cases 

3 

3 

3 

Med 

Stakeholders 
opinions mixed 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.FACILIT 

Med 

Lo 

Opposition 
notably from 
businesses and 
MS 

Support from 
CAEs, opposition 
from business 

Different Member States 
models; Uncertainty and 
insufficient provisions w.r.t. 
integration of strategic 
goals 

Different Member States 
models; Uncertainty and 
insufficient provisions w.r.t. 
integration of strategic 
goals 

STR.LEGI.ENFORC 

STR.LEGI.ENFORC 

EN 

165 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Mandatory use of life-cycle 
costing when determining the 
economically most 
advantageous offer 

4 

Med 

Dropping the condition that 
requirements imposed by the 
contracting authority must be 
linked to the subject matter of 
the contract 

EU level quotas in public 
procurement legislation to 
impose consideration of 
green, social etc. factors 

4 

4 

Lo 

Lo 

EN 

Link to problem driver(s) 

Option action assigned to 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.ENFORC 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.ENFORC 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.ENFORC 

Stakeholder 
views  

Favourable 
opinion on 
concept of LCC 
from a lot of 
stakeholders; 
opinions split as 
to how far this 
should be 
mandatory 

Strong opposition 
notably from 
businesses and 
MS 

Strong opposition 
from all 
stakeholder 
groups except 
NGOs. 

166 

EN 

 
  
Action 

Economic 
magnitude170 

Ability to 
improve the 
functioning of 
the public 
procurement 
market (Hi, 
Med, Lo) 

Stakeholder 
views  

Link to problem driver(s) 

Option action assigned to 

Obligations on "what to buy" 
at EU level enshrined in 
policy specific legislation 
(environmental, energy-
related, social, accessibility, 
etc)  
Incentives/measures to further 
promote and stimulate 
innovation through public 
procurement 
- Obligatory use of 
performance related technical 
specifications  

Incentives/measures to further 
promote and stimulate 
innovation through public 
procurement - Obligatory use 
of variants  

4 

3 

2 

Lo 

Lo 

Lo 

Stakeholders 
opinions mixed. 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.ENFORC 

Stakeholders 
sceptical 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals; Inflexible 
procedures 

STR.LEGI.ENFORC 

Question not 
explicitly asked 
in the GP - no 
statistics 
available 

Uncertainty and insufficient 
provisions w.r.t. integration 
of strategic goals 

STR.LEGI.ENFORC 

EN 

167 

EN 

 
  
 
8.6. 

ANNEX 6 – Detailed description of Headline actions 

Table 25): Detailed description of Headline Actions under each legislative option 

Option 

Headline Action 

Description of the headline action 

SCO.LEGI.TARGET  Higher  threshold  for  social 
services  ,  with  a  special 
regime  for  social  services 
above this threshold 

SCO.LEGI.TARGET 

Inclusion  of  all  former  B-
services  (except  for  social 
regular 
services) 
regime  

the 

in 

this 

light 

above 

regime,  with 

There  would  be  no  change  in  basic 
thresholds,  but  higher  threshold  for 
social services , with a special regime 
for 
this 
services 
social 
threshold, 
threshold.  Above 
special 
an 
obligation  of  ex-ante  publication  of  a 
notice  would  be 
as 
compensation 
higher 
for 
thresholds. CAEs would be allowed to 
choose  the  service  provider  on  the 
basis  of  considerations  linked  to  the 
specificities  of  social  services, 
in 
particular to the quality of the service. 

introduced 

the 

All  former  B-services  (except  for 
social services for which the directive 
provides  a  special  regime,  see  below 
under  strategic)  would  be  covered  by 
the  regular  regime.  In  practice,  this 
would mean the abolition of B-regime 
as  such  (and  a  replacement  of  a 
complicated  two-tier  structure  by  a 
simpler  one  i.e.  based  on  a  special 
see: 
regime 
above). 

services- 

social 

for 

SCO.LEGI.REDUCE  Raise the thresholds 

All  currently  applicable 
thresholds 
raised;  Three  possible 
would  be 
scenarios would be analysed – a raise 
by  20%,  by  50%  and  doubling  the 
thresholds. 

PRO.LEGI.DESIGN 

Improve  tools  for  repetitive 
purchasing 
(DPS, 
framework  agreements,  e-
Catalogues). 

before 

The  functioning  of  DPS  would  be 
considerably  improved  and  simplified 
e.g. the need for individual notice and 
each 
indicative 
tenders 
individual  procurement  under 
the 
abolished. 
system 
Conditions  for  use  of  framework 
agreements  would 
clarified, 
notably the use of FRA by contracting 
authorities  which  are  not  party  to  the 
agreement. 

would 

be 

be 

EN 

168 

   EN 

 
Option 

Headline Action 

Description of the headline action 

PRO.LEGI.DESIGN 

Increase  use  of  electronic 
communications 
tools  (e-
procurement)  

PRO.LEGI.FLEXIB 

Greater  freedom  for  CAEs 
to use negotiated procedure 

Coherent  rules  for  the  use  of  e-
catalogues  would  be  provided.  The 
commission  would  be  empowered  to 
issue 
standards 
through comitology.  

interoperability 

The use of e-procurement tools would 
be  promoted,  for  example  thought: 
mandatory  transmission  of  notices  in 
electronic  form,  mandatory  electronic 
availability  of 
tender  documents, 
CPBs  would  be  bound  to  use  fully 
electronic communication tools. CAEs 
would  have  to  have  access  to  DPS. 
MS  would  be  allowed 
to  make 
mandatory  electronic  communication 
where it is not yet mandatory by virtue 
of the Directive.  

The  use  of  the  negotiated  procedure 
with  prior  publication  would  be 
available for all contracts with certain 
safeguards  (notably:  documentation 
obligations, etc.)  

PRO.LEGI.FLEXIB 

lighter  publication 
sub-central 

for 

New 
regime 
authorities 

STR.LEGI.FACILIT  Allow 
entire 
award criteria 

consideration 
life-cycle  costs 

of 
in 

Sub-central  contracting  authorities 
would  enjoy  new  lighter  publication 
regime,  by  taking  the  advantage  of 
leeway  allowed  by  the  GPA.  For 
example, 
the 
possibility to use the prior information 
notice  as  a  means  of  calling  for 
competition  and  the  possibility  to  set 
certain 
in  mutual 
limits 
agreement with candidates. 

they  would  enjoy 

time 

Consideration of entire life-cycle costs 
would  be  allowed  in  award  criteria, 
both  in  the  context  of  the  EMAT  and 
in  the  second  criterion.  "Price  only" 
criterion  would  become  "cost",  which 
can  be,  at  the  choice  of  a  CAE,  price 
only  as  currently,  or  overall  costs 
including  life-cycle  cost.  Life-cycle 
costing 
include 
transport costs and externalities linked 
to  transport  such  as  CO2  emissions 
(where they could be monetised). The 

explicitly 

could 

EN 

169 

   EN 

 
Option 

Headline Action 

Description of the headline action 

use  of  common  EU  methodology 
would 
be  mandatory  whenever 
established. 

STR.LEGI.FACILIT  Allow  inclusion  of  factors 
to 
directly 
in 
production  processes 
award criteria and technical 
specifications  

linked 

STR.LEGI.FACILIT 

Introduce  the  "Innovation 
partnership” (a new, special 
procedure for purchases not 
yet available on the market) 

processes  would 

Factors  directly  linked  relating  to 
production 
be 
allowed in award criteria and technical 
include 
specifications.  This  would 
socially 
people 
disadvantaged 
involved  in  the  production  process  to 
support  the  Social  Business  Initiative. 
However, 
approach  would 
exclude  requirements  too  far  away 
from  the  production  process,  such  as 
requirement for the economic operator 
to  build  schools  for  the  children  of 
workers in the country of origin of the 
supplies  (Fair  Trade  Premium)  or 
general 
Social 
Corporate 
Responsibility. 

such 

in  cooperation  with 

Special procedure for purchases which 
are  not  yet  available  on  the  market: 
competitive  procedure  to  choose  the 
developer,  who  would  develop  the 
product 
the 
contracting  authority.  To  have  an 
incentive  to  invest  the  supplier  would 
also be allowed to directly supply the 
the  contracting 
product/service, 
if 
authority 
the 
is 
product/service developed  

satisfied  with 

STR.LEGI.ENFORC 

Introduce  obligations  on 
"what to buy" (quotas) 

STR.LEGI.ENFORC  Require  CAEs 

certain 
criteria 

defined 

to  use 
award 

Quotas setting criteria for a percentage 
of  contracts  awarded 
in  selected 
categories  of  purchases  would  be 
defined in the Directives (e.g. 20% of 
procured  electricity  would  have  to 
come from renewable sources).  

CAEs  would  be  obliged  to  evaluate 
offers  according  to  certain  criteria 
defined by the EU. For example, they 
might  have  to  use  the  life  cycle  cost 
methodology defined in the Directive, 
thereby,  allowing  factors  relating  to 
energy  consumption  to  influence  the 
final award.  

EN 

170 

   EN 

 
Option 

Headline Action 

Description of the headline action 

ACC.LEGI.FACILIT  Mandatory  acceptance  of 
self-declarations  as  prima-
facie evidence for selection 

CAEs would be obliged to accept self-
declarations  as  preliminary  evidence 
submitted  by  bidders.  Only  once  a 
successful bidder is selected, the CAE 
would  require  the  winner  to  submit 
original  documentation  and  /  or  to 
clarify  the  certificates  and  documents 
which were presented in the offer. 

ACC.LEGI.FACILIT 

Introduction  of  a  European 
Procurement passport 

a 

for 

EU public procurement passport could 
become 
further 
tool 
simplification  of  the  procedures.  EU 
public  procurement  passport  would 
take  the  form  of  a  standard  document 
validated  at  the  MS  level,  confirming 
that a bidder is compliant with certain 
frequently 
requested  criteria  e.g. 
certification that the firm has not been 
the  subject  of  a  conviction  by  final 
judgment  or  is  subject  of  insolvency 
or  winding-up  proceedings,  that  the 
firm  pays  social  and  fiscal  tax,  etc. 
The  Passport  would  have  a  limited 
validity  of 
several 
months. 

for  example 

ACC.LEGI.ENFORC 

Impose  mandatory  use  of 
lots  for  all  above  threshold 
contracts 

All  contacts  above  the  EU  thresholds 
would  have  to  be  split  into  lots  in 
order  to  facilitate  the  access  of  SMEs 
to  public  procurement  markets.  The 
proposed model would not foresee any 
possibility  to  waive  such  obligation, 
even  if  such  compulsory  subdivision 
into  lots  was  technically  difficult, 
expensive  or  for  other  economic 
reasons.  

ACC.LEGI.ENFORC 

Introduce  quotas  for  share 
of  procurement  contracts  / 
budget awarded to SMEs 

Fixed quotas with regards to contracts 
awarded to SMEs would be defined in 
the Directives.  

GOV.LEGI.TARGET  Establish  clear  rules  for 
through 

purchases  made 
CPBs 

Clear  rules  for  purchases  through 
Central  purchasing  bodies,  including 
"safe  haven"  concept.  Introduction  of 
provisions  that  would  permit  small 
transfer 
contracting  authorities 
to 
responsibility 
CPBs. 

for  procurement 

to 

EN 

171 

   EN 

 
Option 

Headline Action 

Description of the headline action 

GOV.LEGI.ENHANC Obligatory  designation  of 
central  national  oversight 
body  by  Member  States, 
with  clear  obligations  on 
monitoring, 
enforcement 
and reporting 

to 

ownership 

enforcement 

of  MS 
EU 

New  provisions  that  would  aim  at 
stronger 
in 
public 
of 
enforcement 
procurement  rules,  notably  through 
obligation 
identify  appropriate 
structures. Also a direct answer to the 
IAS  Audit  Report  asking  for  more 
ownership by MS in the application of 
EU  procurement  law.  This  national 
oversight body would have obligations 
on  monitoring, 
and 
reporting.  The  annual  reports  of  the 
oversight  body  could  for  example 
include  reporting  on  SME  success  in 
public  tenders.  The  oversight  body 
could also be responsible for ensuring 
and 
better 
businesses 
improve 
in  order 
professionalisation  of  procurement, 
better knowledge sharing / knowledge 
management  (e.g.  via  "knowledge 
centres"), although this role could also 
be  fulfilled  by  a  different  body. 
Administrative  cooperation  between 
MS  could  be  improved  through  the 
use of IMI for information exchange. 

to  CAEs 
to 

assistance 

8.7. 

ANNEX 7 – Detailed analysis of impacts of selected Headline actions 

8.7.1. 

SCO.LEGI.TARGET - New regime for all services and a lighter treatment for social 
services 

Currently,  the  Directives  make  a  distinction  between  so  called  A-type  and  B-type 
services. While A-type services are subject to the full procedures of the Directives, 
contract  awards  for  B-type  services  have  only  to  comply  with  the  provisions  on 
technical specifications and on the transmission of a notice of the results of the award 
procedure172. B-type services are also subject to the basic principles of EU law, such 
as non-discrimination and transparency173. The two tier structure was established as a 
compromise that was meant to mirror cross-border interest of certain sectors (A-type 
categories) and lack of such interest of other sectors (basically, all B-type services).  

Service  contracts  tend  to  represent  around  38%  of  the  total  volume  of  public 
procurement  published  in  OJ/TED  (i.e.  in  2009  around  €  160  billion).  This  total  is 

172 
173 

Which they may / may not permit to be published. 
As different from contracts below the thresholds, which are only subject to the basic principles of EU 
law - such as non-discrimination and transparency - if they present a cross-border interest. 

EN 

172 

   EN 

 
                                                 
split into A-type and B-type services (74% and 26% respectively in value terms and 
70%/30% in terms of the number of CANs). 

The  abolition  of  the  current  A/B  distinction  in  service  (a  two-tier  structure)  could 
basically mean that one of four approaches is chosen:  

(i) 

the distinction into A- or B- type services is abolished and all services are 
subject to the “full” regime (i.e. all services would become A-type ),  

(ii) 

the distinction into A- or B- type services is abolished and all services are 
subject to the “light” regime enjoyed currently by B-type services,  

(iii)  service contracts would be entirely excluded from the Directives. 

Ad.(i):  The  first  proposal,  where  all  services  would  be  subject  to  the  "full"  regime 
(using  the  current  terminology,  all  services  would  become  A-type  services),  would 
expand  the  scope  of  the  “full”  regime  by  around  €41  billion.  This  move  could 
however pose significant difficulties, as part of the current B-type services have little 
or  even  no  cross-frontier  interest,  therefore  expanding  full  provisions  of  the 
Directives to those selected services could be perceived as too burdensome and not 
adapted to services that are not tradable (e.g. so-called "services to the person").  

Ad. (ii): Bringing all services to B-type status would be detrimental to those A-type 
services that are successful in cross-border procurement. Recent research shows that 
many of A-type  services are relatively successful in  cross-border procurement (e.g. 
Category 11:Managemen consulting services and related services with 10.4% direct 
cross-border ratio in volume terms in 2007-2009). 

Ad.  (iii):  The  impact  of  the  fourth  approach  aimed  at  abolishing  the  two–tier 
structure  by  the  exclusion  of  all  service  contracts  from  the  scope  of  the  Directives 
would mean downsizing EU public procurement market by roughly €160 billion each 
year.  Although  a  theoretical  possibility,  this  measure  should  be  ruled  out 
immediately, as it cannot be regarded as a serious alternative - it is not supported by 
the stakeholders, would trigger important losses in transparency and undermine EU's 
credibility  on  the  international  level  (including  potential  penalties  under  the  GPA). 
Finally, the third proposal is not sustainable given the findings of the evaluation (i.e. 
that the benefits of the Directives outweigh its costs). As a consequence, the above 
measure will not be considered further. 

A compromise solution between the two remaining possibilities ((i) and (ii)) would 
be to move only some types of services to the full regime (i.e. modify the allocation 
of services to A-type/ B-type list) and possibly – improve the design of these rules.  

As  mentioned  above,  one  of  the  "natural"  candidates  for  a  special  and  lighter 
treatment  with  respect  to  pp  rules  should  be  the  "services  to  the  person"  or  "social 
services".  This  is  due  to  the  fact  that  these  services  are  characterised  by  very  low 
tradability and generally the absence of cross-border interest. For example, the value 
of direct cross-border awards as a proportion of all awards in Category 25 ("Health 
and  social  services")  was  close  to  0%.  There  was  only  one  category  under  B-type 
services  that  showed  lower  percentage  (22:  Personnel  placement  and  supply 
services), but the volume of transactions in Category 22 in absolute terms was much 

EN 

173 

   EN 

 
less important174 than Category 25, as the latter constituted around 1/3 of value of all 
B-type contracts awarded in 2007-2009. 

Table 26): Cross-border procurement – A and B services on the basis of contract value (2007-2009) 

Service Category 

A-type services 

B-type services 

within B-type: 

25: Health and social services 

Total  

Direct 
cross-
border 

Indirect 
cross-
border 
through 
affiliates

2.8% 

16.2% 

1.2% 

12.1% 

0.1% 

0.6% 

2.4% 

14.6% 

Source: Rambøll study 

As  mentioned  before,  currently,  social  services  are  listed  in  Annexes  B  of  the 
Directives therefore, when outsourcing social services via a public service contract, 
public authorities already enjoy considerable latitude with regard to the procedures to 
be  followed.  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  or  a  global 
exclusion of these services from the scope of the Directives. 

According  to  estimations  based  on  notices  published  in  OJ/TED  social  services 
accounted for roughly € 18 billion in 2009175 (see: Table 27). 

Table 27): Social services – the estimated value of public procurement published in OJ/TED in 2009 in € 
million and % 

Service 
category 

Category 24: 
Education and 
vocational 
education 

CPV codes 

From 80100000-5 to 80660000-8 
(except 80533000-9, 80533100-0, 
80533200-1)

Value [€ 
million] 

% of the 
total 
volume 

2,293.32 

0.5%

174 

175 

Contracts value in Category 22: Personnel placement and supply services was around 1/10 of Category 
25: Health and social services. 
This figure was calculated on the basis of the notices published under following CPV codes: in category 
24 Education and vocational education services (CPV codes from 80100000-5 to 80660000-8, except 
80533000-9,  80533100-0,  80533200-1)  and  in  category  25  Health  and  social  services  (CPV  codes 
79611000-0, and from 85000000-9 to 85323000-9, except 85321000-5 and 85322000-2). 

EN 

174 

   EN 

 
                                                 
Service 
category 

services 

CPV codes 

Value [€ 
million] 

% of the 
total 
volume 

Category 25: 
Health and 
social services 

79611000-0, and from 85000000-
9 to 85323000-9 (except 
85321000-5 and 85322000-2)

16,422.95 

3.9%

TOTAL

18,716.26 

4.5%

Source: DG MARKT estimates based on OJ/TED data 

While  analysing  the  volume  of  transaction  related  to  social  services,  it  is  equally 
important to notice that of the 6.11 % of GDP spent by governments on health social 
security and education176, only a marginal amount has been published in the OJ/TED. 
The  comparison  of  public  expenditure  by  functions  of  government  with  contracts 
advertised  reveals  that  around  94%  of  expenditure  in  the  health  or  social  services 
sector is not spent through contracts advertised in OJ/TED. A similar issue arises in 
the  education  sector,  where  83%  of  expenditure  seems  not  to  be  advertised  (see: 
Table 8 below).  

Table  28):  Comparisons  between  expenditure  on  works,  goods  and  services  by  functions  of  government 
(based on COFOG data) and the value of publications in OJ/TED grouped by activities, in 2008 

COFOG 
expenditure 
[€ million] 

OJ/TED 
estimated 
publication  
[€ million]

OJ/TED 
publications as % 
of expenditure

Health 

Education 

563,884.20

36,316.12

129,784.80

21,556.80

Social protection 

153,859.10

4,516.12

6%

17%

3%

Source: Eurostat (COFOG) and DG MARKT estimates based on OJ/TED 

The above data highlight that in the three sectors concerned: health, social protection 
services and education, the levels of publication are particularly low. This suggests 
that a vast majority of expenditure in these sectors is not carried out in line with the 
rules  applicable  to  B-type  services  -  partially,  because  the  value  of  such  contracts 
falls  below  EU  thresholds,  but  also  because  of  regulatory  settings  in  those  sectors 
that  are  established  at  the  national  level177.  To  summarise,  the  way  in  which 

176 
177 

See: the Evaluation Report, page 35. 
In  general,  for  example,  most  expenditure  on  health  services  or  pharmaceuticals  are  incurred  by 
households  and  reimbursed  by  the  state  or  statutory  sickness  insurance  funds.  In  Germany  statutory 
sickness  insurance  funds  are  considered  to  be  contracting  authorities  (i.e.  in  the  Oymanns  judgment 
(case C-300/07, 11 June 2009), the ECJ confirmed that German statutory sickness insurance funds are 
contracting  authorities  under  the  procurement  directive  2004/18/EC).  In  the  Netherlands  most  health 

EN 

175 

   EN 

 
 
 
                                                 
education,  health  care  and  social  protection  services  are  delivered  already  seems  to 
effectively place most expenditure on goods and services in these sectors outside the 
scope  of  the  provisions  of  the  Directives.  As  a  result,  the  proposed  changes  could 
have only limited impact on the provision of these services, as the majority of public 
spending in these sectors is done without the use of public procurement rules defined 
in the Directives.  

Finally,  it  is  expected  that  more  clarity  with  regards  to  the  correct  identification  of 
the relevant service category could generally improve publication rates for services, 
especially for B-type services. Improving clarity and hence "user-friendliness" of the 
system  would  facilitate  correct  identification  of  these  service  types  could  rise  the 
publication rates for services.  

It is also worth mentioning that a slight majority of stakeholders support the idea of 
reviewing  the  distinction  between  A  and  B  services178.  Most  frequently  repeated 
arguments  refer  to  the  fact  that  some  of  the  B-services  might  not  merit 
differentiated/lighter treatment (for example restaurants, legal services). Stakeholders 
argued that the market in a number of sectors of B-type services is now developed 
and  these  should  now  be  made  A's  (whilst  new  or  emerging  services  could  be 
classified as B, until the markets mature).  

8.7.2. 

SCO.LEGI.REDUCE- General increase of EU thresholds 

In order to analyse the impacts of a general increase of EU thresholds we focus on 
the principal three threshold levels (the remaining thresholds have been ignored for 
the sake of clarity of this analysis):  

•  goods and services purchased by central government (€ 125,000),  

•  goods and services purchased by sub-central government (€ 193,000) and 

•  works contracts for all contracting authorities (€ 4.85 million).  

The effects of raising the thresholds can be analysed in various terms – the impacts 
on procedures and the impacts on the size of market covered by the Directives (i.e. 
economic  importance)  have  been  judged  as  the  two  most  important  aspects.  The 
outputs were based on three scenarios (i.e. increase by 20%, 50% and 100%) and are 
presented below179.  

8.7.2.1.  Impacts on the use of procedures 

The  open  procedure  is  most  frequently  used  for  lower  value  contracts  and  its  use 
decreases as contract value increases (see: Figures 27 and 28).  

expenditure is now in principle made by statutory private health insurance bodies which do not consider 
themselves to be subject to the directives (although there is still public funding for children, the elderly 
and  unemployed)  and  who  provide  services  through  public  or  private  providers  of  primary  and 
secondary health care. The situation in many other MS is not necessarily clear. 
Q 4 of the GP: 53% of MS support this idea and 55% of CAE (but 80% of citizens) 
The outputs are presented as annualized effects, calculated on the basis of 2009. Procurement volume 
(recorded in OJ/TED) has increased during 2010 and that might lead to more significant impacts than 
what has been found based upon the 2009 data; source: PwC study, page 71. 

178 
179 

EN 

176 

   EN 

 
                                                                                                                                                         
Figure 27): Values by procedure, median and mean 2006-2010 

Procedure

Median

Mean

Restricted
Negotiated
Total
Accel. Restr.
Negot. w.o publ.
Accel. Negot.
Open

693 
712 
390 
496 
356 
360 
353 

8 287 
6 672 
3 141 
3 045 
2 279 
2 218 
2 181 

Figure 28): Distribution of procedures and contract value (thousand euro increments) 

€ (thousand)

Source: PwC study 

100 %

75 %

50 %

25 %

0 %

0

1

2

Contract value (millions)

Competetive 
dialogue

w.o publ

Negotiated

Restricted

Open

3

Source: PwC study 

As a consequence, if thresholds were to be raised, the use of available procurement 
procedures  would  change,  affecting  most  significantly  the  use  of  open  procedure 
which is more frequent in the low end of the value range180.  

The  hypothesis  that  open  contest  would  be  mainly  affected  by  this  change  is 
confirmed  by  a  simulation,  where  potential  raise  in  thresholds  levels  (thee  variants 
i.e.  an  increase  by  20%,  50%  and  100%)  were  modelled  against  the  distribution  of 
procedures. The results show that the open procedure would be used less frequently 
and will be mainly replaced by the use of restricted procedure. The use of negotiated 
procedure  would  also  increase  albeit  at  smaller  levels.  The  effect  would  be  the 
largest for works181. The effects of changed thresholds are shown in Figure 9) which 
analyses all three scenarios.  

180 
181 

Source: PwC study, page 71. 
Source: PwC study, page 71. 

EN 

177 

   EN 

 
 
 
                                                 
Figure  29):  Growth  rates  of  use  of  procedures  by  increases  in  threshold  levels  (scenarios  identified  - 
increasing threshold levels by 20%, 50% and 100%) 

Central government

Sub-central government

Works

+20%

+50%

o

i
r
a
n
e
c
S

+100%

Open

Restricted

Negotiated

-5 % 0 % 5 % 10 % 15 %

-5 % 0 % 5 % 10 % 15 % -10 %

0 %

10 %

20 %

Source: PwC study 

Less frequent use of open procedure might have negative impact on transparency of 
public procurement regime in general.  

8.7.2.2.  Impacts on the number and volume of transactions no longer covered 

The effects of raising the thresholds can also be calculated in terms of the number of 
transactions  carried  out  under  the  Directives,  and  the  market  volume  covered  by 
these rules. The outputs based on the three scenarios (i.e. increase by 20%, 50% and 
100%) as presented below182.  

Figure 30): Impact on number of transactions and market volume by raising threshold levels (2009 est.) 
rates in percent levels (scenarios identified - increasing threshold levels by 20%, 50% and 100%) 

Procurements impact

Market volume impact (€)

Works

Sub-
central

13 %

9 %

4 %

7,3 %

2,9 %

15 %

7 %

26 %

3,8 %

2,0 %

0,8 %

Central

12 %

5 %

22 %

1,7 %
0,8 %
0,3 %

-

5 000 

10 000 

0

4

8

12

16

Procurements ('000)

Market volume (billions)

12,8 %

+100%

+50%

+20%

Source: PwC study 

The above findings show that market impact of increasing thresholds could be quite 
significant, especially for works, reaching € 8 billion annually (if the threshold was 
increased by 50 %) or almost € 16 billion (if the threshold was to be doubled).  

In numbers, the sub-central government category sees the most significant impact – 
26%  less  notices  would  be  published  in  the  OJ/TED  if  this  threshold  was  to  be 

182 

The outputs are presented as annualized effects, calculated on the basis of 2009. Procurement volume 
(recorded in OJ/TED) has increased during 2010 and that might lead to more significant impacts than 
what has been found based upon the 2009 data; source: PwC study, page 71. 

EN 

178 

   EN 

 
 
 
                                                 
doubled  and  15%  less  notices  in  case  of  a  50%  rise.  As  far  as  central  government 
supply and services contracts are concerned, raising this threshold by 50% and 100% 
would decrease the number of notices published by respectively 12% and 22%. 

To  summarise,  the  above  analysis  shows  that  raising  thresholds  would  reduce  the 
size  of  the  market  covered  by  EU  public  procurement  rules  (by  up  to  approx.  €20 
billion, if all thresholds were to be doubled).  

8.7.3.  PRO.LEGI.DESIGN - Increase in the use of e-procurement 

As  presented  in  the  2010  Evaluation  of  the  e-procurement  Action  Plan,  the 
Commission  supports  the  transition  from  paper-based  to  on-line  procurement 
because it sees the following advantages: 

–  Benefits  for  individual  procedures:  compared  to  paper  based  systems,  e-
procurement  can  help  contracting  authorities  and  economic  operators  to  reduce 
administrative costs and speed up individual procurement procedures. In the current 
financial climate, such efficiencies could be very welcome, maximising the potential 
which can be obtained from limited resources. 

– Benefits in terms of more efficient procurement administration: the development of 
CPBs,  often  making  extensive  use  of  electronic  procedures,  can  help  to  centralise 
costly  procurement  back-office  functions  and  reap  scale  economies  in  procurement 
administration.  

–  Greater  transparency  and  better  monitoring  of  procurement:  by  automating  and 
centralising  the  flow  of  information  about  individual  tender  opportunities,  e-
procurement  can  also  enhance  the  transparency  and  overall  efficiency  of  public 
procurement,  opening  up  markets  to  more  competition  and  deepening  the  pool  of 
competing  suppliers,  whilst  at  the  same  time  improving  spend  management  and 
overall planning.  

–  Potential  for  integration  of  EU  procurement  markets:  e-procurement  reduces 
distance  barriers  and  information  gaps  which  could  have  reduced  or  discouraged 
cross-border  participation  in  paper-based  procedures.  It  should  be  underlined  that, 
while  e-procurement  can  overcome  distance-related  costs  to  participation  in  the 
procurement procedure itself, it will not change the relevance of distance or physical 
proximity  in  the  actual  performance  of  the  underlying  business  transaction.  An 
increasing  number  of  procurements,  for  example  the  provision  of  services  such  as 
software, design competitions and helpdesks, can be provided from another country 
and e-procurement should be well suited to publicise, exploit and ultimately realise 
such opportunities.  

–  Administrative  modernisation  and  simplification,  encouraging  the  integration  of 
various  administrative  processes  as  well  as  diffusion  of  ICT  in  government  and 
society.  

In  terms  of  benefits  delivered  by  operations  ran  across  the  EU,  there  were  great 
expectations  relating  to  the  savings  which  could  be  realised  as  a  result  of  the 
introduction of e- procurement.  

EN 

179 

   EN 

 
The  potential  to  reduce  costs  was  promoted  as  a  key  incentive  to  encourage  the 
switch to electronic procedures. Certain MS have turned it into an objective of their 
national  strategy,  such  as  Ireland  where  five  of  the  quantitative  targets  of  their 
national action plan were focused on costs. 

Due  to  the  lack  of  appropriate  data,  it  is  not  possible  at  this  stage  to  evaluate  the 
reduction of costs of single procedures in the MS. E-procurement is expected to have 
initially  increased  the  costs  due  to  the  necessary  spending  for  the  creation  of 
platforms,  but  a  dramatic  decrease  of  costs  was  expected,  once  the  structural  costs 
had been absorbed. There is however a small but growing body of proof that savings 
are  being  realised  as  a  result  of  e-procurement  use  (see:  Box  3)  below).  Wider 
anecdotal  evidence  suggests  that  many  contracting  authorities  and  economic 
operators have made the switch-over to e-procurement and would not contemplate a 
return  to  paper  based  procedures.  The  ePractice183
  website  gathers  case  studies 
showing  examples  of  MS  (such  as  Austria,  Spain,  France  or  Romania)  where  the 
savings made through e-procurement exceed the investment and running costs. (for 
more detail see Annex VIII of report, which gives a broad overview of the situation 
by MS in terms of savings.)  

Examples of savings and improvements  

-  Italian  Emilia  Romagna's  agency  Intercent  ER  offers  e-procurement  services  including  e-  Marketplace,  e-
Catalogues  and  e-Auctions  and  is now  the reference  point  for 539  administrations  (90%  of  local  agencies).  In 
2008 it processed transactions amounting to some € 419 million, delivering efficiency benefits of € 67.5 million 
and time savings of 45 man-years.  

- The Austrian Federal Procurement Agency centralises purchases for federal authorities through e-procurement 
functionalities.  In  2008  it  reported  savings  of  €178  million  against  a  procurement  volume  of  €830  million. 
Benefits seem to significantly outweigh the annual maintenance costs of €5 million, which are less than 3% of 
the savings.  

- As of 1 February 2005, all contracting authorities in Denmark may only accept electronic invoices. This reform 
affects  approximately  15  million  invoices  a  year,  and  applies  to  the  entire  public  sector,  from  ministries  to 
nursery schools. The use of e-Invoicing is expected to save the public €100 million every year, on top of savings 
in internal administrative processes.  

-  In  Norway,  the  Ehandel  platform  is  helping  authorities  to  achieve  20-40%  reductions  in  the  time  taken  to 
handle orders, receipt of goods and invoicing and delivering price savings in the region of 2-10%.  

- In the UK, the Buying Solutions website reported in its 2008/09 annual report that it had facilitated sales of 
over £5 billion, delivering £732 million in savings. The UK also reported savings frequently exceeding 10% (and 
even  up  to  45%)  through  the  use  of  e-  Auctions  and  recently  announced  plans  to  use  e-Auctions  to  save  the 
taxpayer up to £270 million by the end of 2011.  

- A Portuguese study compared the best bids for public works contracted by 50 Portuguese public hospitals in 
2009 (using paper based systems) and 2010 (using e-procurement). It concluded that a cost reduction of 18% had 
been achieved in 2010, due to the increase in competition generated by e-procurement.  

Source: DG MARKT, based on ePractice, national e-procurement sites and MS presentations  

183 

http://www.epractice.eu/  

EN 

180 

   EN 

 
                                                 
8.7.4.  PRO.LEGI.DESIGN - Improve tools for repetitive purchasing 

Repetitive  purchasing  is  used  by  contracting  authorities  to  make  purchases, 
repeatedly, over a certain period of time. It aims at streamlining and improving the 
timeliness and the effectiveness of the process of acquiring the goods/services/works 
needed.  There  are  two  main  repetitive  purchasing  procedures  foreseen  by  the 
Directives: framework agreements and the DPS. 

A  ‘framework  agreement’  is  an  agreement  between  one  or  more  contracting 
authorities and one or more economic operators. Its purpose is to establish the terms 
governing contracts to be awarded during a given period, in particular with regard to 
price and, where appropriate, the quantity envisaged. 

A DPS is a completely electronic process for making repetitive purchases, limited in 
duration  and  open  throughout  its  validity  to  any  economic  operator  which  satisfies 
the  selection  criteria  and  has  submitted  an  indicative  tender  that  complies  with  the 
specification. 

In addition to these two procedures, e-catalogues (electronic catalogues), are also a 
useful  tool  in  the  context  of  repetitive  purchasing.  An  e-catalogue  is  an  electronic 
document established by a supplier describing goods and services and their prices. It 
can  constitute  a  tender,  under  certain  conditions.  In  the  context  of  repetitive 
purchasing, e-catalogues can be very useful as they allow suppliers to rapidly prepare 
an  offer,  while  allowing  contracting  authorities  to  evaluate  offers  in  a  standard 
format. 

the  use  of 

improve/simplify 

The  Directives  could 
repetitive  purchasing 
procedures/tools  by  increasing  clarity  when  running  these  procedures,  by  making 
them  more  proportionate  and  suited  to  contracting  authorities'  needs  and  by 
addressing  their  current  shortcomings  (risk  of  market  closure  for  framework 
agreements, complex rules for running the DPS etc.). Simplifying and improving the 
use  of  these  procedures  would  in  turn  optimise  the  use  of  repetitive  purchasing, 
generating additional benefits for both contracting authorities and suppliers. 

Repetitive purchasing and issues of aggregation are inevitably evoked in the context 
of CPBs since the reason to establish them is usually to provide smaller contracting 
authorities  with  the  benefits  of  economies  of  scale.  According  to  the  Evaluation  of 
the  Public  Procurement  Directives,  in  2009,  over  40%  of  the  value  of  contracts 
published  by  central  or  joint  purchasing  bodies  was  through  framework  agreement 
contracts  (page  10  of  the  summary  of  the  Evaluation  report).  However  a  single 
contracting  authority  can  also,  via  repetitive  purchasing,  aggregate  procurement 
needs previously met by dispersed procurement entities within its own organisation, 
to provide flexibility over time and across departments. Thus, repetitive purchasing 
can generate economies of scale. 

Moreover, repetitive purchasing is particularly suited for the use of e-procurement, as 
a  repetitive  purchase  is  a  more  standardised  process,  which  can  more  easily  be 
processed  via  electronic  means.  Combining  electronic  means  and  repetitive 
purchasing can trigger high transactional savings, can increase transparency and can 
improve monitoring capabilities. 

EN 

181 

   EN 

 
However,  repetitive  purchasing  can  increase  the  risk  of  market  closure  and 
concentration,  if  repetitive  purchasing  procedures  favour  the  participation  of  a 
limited  number  of  participants  or  the  use  of  long  term  contracts.  Repetitive 
purchasing  can  also  restrict  SME  participation  in  public  tenders  if  the  value  of  the 
contracts is too high for SMEs to be able to compete. 

8.7.4.1.  Impacts of using framework contracts 

Framework  agreements  prove  to  have  lower  costs  than  other  procurement 
procedures;  thus,  increasing  their  use  could  reduce  the  average  cost  of  running 
procurement  procedures.  According  to  the  Evaluation  "framework  contracts  have 
lower  costs  per  contract  than  any  other  form  of  procurement.  There  are  savings  in 
frameworks  for  both  authorities  and  for  firms.  CAEs  costs  are  about  75%  of  the 
average  procedure;  firms’  costs  are  about  83%  of  the  average".  Lower  transaction 
costs  are  one  of  the  reasons  why  the  use  of  framework  agreements  has  increased 
rapidly. Between 2006 and 2009 the number of framework contracts has increased by 
almost a factor of four184. According to the Evaluation, framework agreements also 
perform better than other procurement procedures in terms of the number of bids that 
they attract. 

The  lower  transaction  costs  and  the  higher  level  of  competition  when  setting  up  a 
framework  agreement  should  be  balanced  against  the  much  lower  level  of 
competition that exists at the time of each contract under the framework. 

Table  below  summarises  compares  the  duration  of  the  award  stage  of  procurement 
procedures  (i.e.  the  number  of  calendar  days  from  the  deadline  for  the  receipt  of 
tenders  to  award  of  a  contract).  As  Figure  31)  shows,  aggregated  procedures  are 
usually  more  time  consuming  than  those  which  do  not  use  the  below  mentioned 
techniques.  

Figure 31): Duration of procedures in calendar days (award stage) by aggregation techniques 

Joint purchasing

Framework

66

66

All contracts

58

Non-framework

57

52

54

56

58

60

62

64

66

68

Source: PwC study  

184 

The Evaluation report, page 10  

EN 

182 

   EN 

 
 
                                                 
The  GP  responses  and  the  Evaluation  show  that  many  stakeholders  and  MS  are 
concerned  that  framework  agreements  may  close  particular  markets  to  competition 
for significant periods of time and that the size of the contracts may put them well 
beyond  the  ability  of  SMEs  to  bid  for  them.  Indeed,  the  evaluation  shows  that 
framework contracts are twice the value of regular purchases, increasing the risk of 
low SME participation. 

Thus, the use or the design of framework agreements should be amended to prevent 
more effectively the potential risk of market closure and to increase competition and 
SME participation.  

8.7.4.2.  Impacts of increasing the use of the DPS 

As  a  fully  electronic  procedure  for  repetitive  purchasing,  the  DPS  can  reduce 
transaction costs and increase transparency for contract award. Moreover, the DPS, 
contrary  to  the  framework  agreement,  is  open  to  new  participants  throughout  its 
duration,  which  increases  competition  and  favours  SME  participation.  Thus, 
increasing  the  use  of  DPS  can  increase  the  openness  of  particular  markets  to 
competition,  while  providing  the  advantages  of  repetitive  purchasing  described 
above. 

However, the costs of running a DPS are high. According to the Evaluation running a 
DPS is the most expensive procurement procedure185. Moreover, almost 40% of the 
respondents to the Green Paper on e-procurement perceive the current provisions on 
DPS  as  complex  and  not  adapted  to  contracting  authorities'  and  suppliers'  needs. 
They call for clearer provisions on the DPS and simpler rules for running it. 

The Evaluation shows that so far the actual use of the DPS has been marginal. This 
low use also seems to demonstrate a misunderstanding of the provisions. So far, 10 
MS have added further provisions, clarifying the conceptual framework, the different 
stages and scope of a DPS, which may actually show that there was indeed some lack 
of clarity in the original provisions on DPS.  

Thus,  in  order  to  capitalise on  the  advantages  of  the  DPS,  the  procedure  should  be 
clarified,  simplified  and  made  more  flexible  as  to  increase  its  attractiveness  and  to 
reduce the costs of running it. 

8.7.4.3.  Impacts of using e-catalogues 

E-catalogues  provide  various  advantages  to  suppliers  and  contracting  authorities. 
They  have  improved  reliability,  allowing  for  quick  up-dates  of  relevant  product 
information. They can reduce the time needed to input product data and can generate 
cost  reductions  for  data  processing  operations  (these  have  not  been  quantified). 
Moreover, in the context of repetitive purchasing they allow quicker submissions of 
offers  for  suppliers  and  improved  ordering  procedures  for  contracting  authorities. 
The impact assessment on the 2004 action plan, noted that e-Catalogues appear to be 
used mostly by central purchasing bodies for ordering under framework agreements, 
using ad-hoc e-Catalogues. 

185 

The Evaluation report, page 19 

EN 

183 

   EN 

 
                                                 
There are a number of providers of e-catalogue systems, but the underlying data or 
structures are not interoperable or easily interchangeable between these systems (cf. 
page 108 of the Evaluation). This can complicate the task of suppliers who have to 
use  different  e-catalogue  formats.  Moreover,  if  contracting  authorities  do  not  make 
available the format of e-catalogues for their suppliers or if the cost of establishing 
an e-catalogue is too high, SME participation in e-procurement can be restricted186. 

Thus,  European  legislation  should  clearly  define  e-catalogues,  the  conditions  under 
which  they  may  be  used  and  possibly  common  formats  to  be  applied  to  ensure 
interoperability and easy access by suppliers. 

8.7.5.  PRO.LEGI.FLEXIB - Permit more negotiations 

One of the headline actions identified under PRO.LEGI.FLEXIB option would be to 
permit  more  negotiations,  for  example  by  putting  the  negotiated  procedure  with 
publication on equal footing with other procedures in the Classic Directive. Impacts 
of such proposal would be significant, as until now the use of negotiated procedure 
was an exceptional method of awarding a contract which could be used exclusively 
under  specific  circumstances  (i.e.  a  list  of  these  circumstances  was  enumerated  in 
Art. 30 of the Classic Directive).  

Greater  freedom  to  use  negotiations  was  basically  supported  by  the  majority  of 
respondents  to  the  GP,  across  all  stakeholders  groups187.  The  main  argument 
presented  in  the  GP  consultation  was  that  negotiation  would  permit  the  needs  of 
CAEs to be addressed more efficiently188. This possibility is also compatible with the 
GPA.  

8.7.5.1.  Impact on the costs of procedures 

The negotiated procedure is less expensive than open and restricted procedures, as it 
attracts  less  competition  (so  the  global  costs  are  lower  due  to  lower  costs  for 
businesses).  The  total  cost  of  a  typical  negotiated  procedure  is  around  €26'000 
compared with around a thousand euro more in the open contests and almost €42'000 
cost of running the restricted procedure.  

The  positive  cost  effectiveness  of  this  legislative  proposal  would  also  be  driven  by 
increased simplification of the legislative framework. The current rules are complex, 
as each time negotiated procedure with publication is used, a CAEs need  to  justify 
the  use  of  such  procedure.  If  the  negotiated  procedure  with  publication  was  more 
easily  available,  there  could  be  less  incentive  to  circumvent  the  Directives  (e.g.  by 
direct awards) and again, this could result in more effective use of public funds.  

However,  the  overall  cost-effectiveness  of  the  negotiated  procedure  may  be 
negatively  affected  by  the  fact  that  the  negotiated  procedure  is  less  efficient  in 
generating savings than the open and restricted procedures189. As a result, CAEs may 

186 
187 
188 
189 

The Evaluation report, page 108 
Replies to question 19 of the GP. 
Replies to question 19 of the GP. 
"Using the open procedure is associated with benefits of a 3 % lower award value when compared to 
cases where non-standard procedures were used", source: Europe Economics study, page 52. 

EN 

184 

   EN 

 
                                                 
pay  higher  prices  per  purchase  and  the  previously  mentioned  benefits  of  lower 
transaction costs may level off (to some extent). 

Figure 32): Typical cost of a procedure [in '000] 

Total

5.5

22.4

Negotiated

5.8

20.3

Restricted

9.0

32.9

Open

5.1

22.4

Costs for authorities
Costs for firms 

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

8.7.5.2.  Impacts on competition 

If  negotiated  procedure  becomes  more  frequently  used  due  to  the  introduction  of 
legislative  changes  foreseen  under  option  PRO.LEGI.FLEXIB,  this  might  have 
negative  impact  on  competition  as  the  typical  negotiated  procedure  attracts  fewer 
tenders than the corresponding open procedure. 

Source: PwC study 

Figure 33): Number of bids received by procedure and technique (mean) 

Average number of bids

Open

Restricted

All contracts

Negotiated

Competitive Dialogue

5.7

5.5

5.4

4.8

3.9

0

1

2

3

4

5

6

Additionally,  an  econometric  analysis  using  a  number  of  variables  that  could 
contribute to the variation in the number of bids that a call for tenders receives has 
confirmed  some  of  the  results  of  the  descriptive  analysis  presented  above  but  also 

Source: PwC study 

EN 

185 

   EN 

 
 
 
highlighted  other  effects.  The  econometric  analysis  thus  investigated  which  effects 
can  be  uniquely  attributed  to  each  explanatory  variable  and  showed  that  negotiated 
procedures would, holding all else equal, receive less offers than the open procedure 
(by roughly 2.2%). The results of the regression are presented on Figure 34) below. 

Figure 34): Estimated impact of type of procedure on number of offers 

Impact on # of offers

Negotiated vs Open

-2,2

Restricted vs Open

-0,6

Framework vs non-…

EMAT vs price

EC funded

e-auction

Joint purchasing

-0,3

0,8

0,7

0,5

0,4

8.7.5.3.  Impacts on the duration of the award stage 

While  analysing  economic  impacts  the  introduction  of  unlimited  right  to  use  the 
negotiated  procedure  with  publication,  we  should  mention  a  draw-back  concerning 
its lower time-efficiency when compared with the open procedure.  

Figure 35): Time from the deadline for the receipt of tenders to award of a contract in days, by procedure 

Source: PwC study 

Competitive Dialogue

245

Restricted

160

Negotiated with publication

Negotiated without publication

127

119

All contracts

Open

58

53

0

50

100

150

200

250

300

As  the  above  figure  shows,  the  negotiated  procedure  with  publication  takes  much 
more time to award (usually 127 days) than the open procedure (typically 53 days). 
The time that elapses until the award of a contract is especially problematic for the 
firms  for  whom  this  1/3  of  a  year  spent  on  decision-making  means  additional 

Source: PwC study 

EN 

186 

   EN 

 
 
 
business uncertainty (as they have invested resources in bidding and do not know if 
they were successful or not). 

8.7.5.4.  Impacts on the costs of procedures  

In  2009,  in  the  utilities  sectors  the  negotiated  procedure  with  publication  (which 
under  the  Utilities  Directive  is  a  standard  procedure)  was  used  in  43%  of  awarded 
contracts (see: Figure 36).  

Figure 36): The use of procedures in the utilities sector in 2009 (based on the number of CANs) 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

6%

38%

43%

12%

100%

Restricted

Open

Negotiated with
competition
Negotiated without
competition

Source: DG MARKT based on OJ/TED data  

In  the  same  year,  this  procedure  was  used  only  in  4%  of  notices  published  in  the 
classical sector. If we assume, that after the proposed legislative revision the use of 
negotiated procedure with publication in the classical sector would become similar to 
the  utilities  sector  (i.e.  it  would  rise  from  4%  to  43%),  this  would  mean  that  for 
around 47,000 transactions yearly, costs of public procurement procedures would be 
lower by € 1,200, hence the global costs would diminish by roughly € 56 million per 
year. 

Another source of savings in the costs of procedure would come from the fact that 
the  negotiated  procedure  attracts  less  competition  and  therefore  the  global  costs  of 
procedures would drop, because less offers in total would be prepared by businesses.  

8.7.5.5.  Impacts on cross-border trade 

More  frequent  recourse  to  the  negotiated  procedure  could  improve  cross-border 
penetration of public procurement markets as contracts awarder under this procedure 
are more frequently awarded to foreign suppliers (see: Table 29 below). 

EN 

187 

   EN 

 
 
Table 29): Value of direct cross-border procurement by procedure [in %] in 2007-2009 

Procedure 

Open 

Restricted 

Negotiated with publication 

Negotiated without publication 

Accelerated restricted 

Accelerated negotiated 

Competitive dialogue 

Direct cross-border 
[%] – 
Classic Directive

Direct cross-border 
[%] -  
Utilities Directive 

2%

4%

4%

6%

3%

23%

1%

5% 

2% 

10% 

11% 

- 

- 

- 

Source: Rambøll study 

The  use  of  negotiated  procedure  was  also  identified  as  a  significant  factor  having 
positive influence on direct cross-border procurement. In a model that was analysing 
factors from the buy and sell side, the effect coefficient of the use of the negotiated 
procedure  as  compared  with  the  open  procedure  was  estimated  at  46.3%  (i.e.  the 
chance  of  direct  cross-border  award  if  the  negotiated  procedure  is  used  are  46.3% 
higher than if the open contests was used), see: Figure 37) below. 

Figure 37) Factors with influence on direct cross-border procurement 

168,6%

269,1%

Specifics of 
contract

Utilities  vs. Classical  Directive

Supplies  vs. works

Services vs. works

Population  (Mio)

-4,0%

Member 
States

Member of  the  euro area

New Member State

Common language1

Corruption  index2

Financed by Community  f unds

Central Government

Local Government

-36,0%

Buy/sell 
side

Restricted vs. open procedure

Negotiated  vs. open  procedure

Contract value  (m EUR,  logarithm)3

Number of  bids

-5,4%

68,3%

97,1%

Not statistically signif icant

21,3%

6,0%

110,1%

Not statistically  signif icant

Not statistically  signif icant

46,3%

44,8%

Subcontracting

Not statistically  signif icant

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

Effect coefficient – influence  on chance of direct cross-border award 

1 I.e. shares a language  with  another  Member State
2 The higher  the  index,  the lower the  perceived level  of  corruption
3 Due to logarithm  not  directly  interpretable

Source: Rambøll study 

EN 

188 

   EN 

 
 
If the above relationship is sustained after the introductions of legislative changes in 
the  Directives,  unlimited  right  to  use  the  negotiated  procedure  with  publication 
should positively influence cross-border penetration in public procurement markets. 

8.7.6.  PRO.LEGI.FLEXIB - New lighter regime for sub-central authorities  

In  direct  response  to  concerns  that  current  procedural  requirements  impose 
disproportionate  costs  on  CAEs  and  suppliers,  efforts  could  be  made  to  design  a 
lighter  procedure  based  on  periodic  announcements  of  planned  procedures  or  a 
constantly  updated  poster-board  of  current  procedures.  Such  approaches  could  also 
maintain  some  common  element  of 
to  sustain  wide  supplier 
involvement,  competition  and  improved  procurement  outcomes.  Designing  a 
procedure  that  delivers  meaningful  procedural  benefits  while  meeting  existing 
international requirements would be challenging. One area where there is still some 
room to manoeuvre in terms of the "fit" between the current GPA requirements and 
the  current  EU  rules,  is  the  regime  applied  to  sub-central  authorities  –  a  market 
representing  around  33%  of  CANs  (approx.  45,000  p.a.)  and  worth  some  €116 
billion p.a. (28% of total).  

transparency 

Table 30): Economic importance of sub-central authorities procurement 

Number  of  CANs 
removed 
(%  of 
CANs ) 

Value 
removed 
total value) 

of  CANs 
of 
(% 

Internat. 
conse 
quences 

Comments 

Sub-central authorities  45,000 (33%) 

€116 billion (28% ) 

Yes 

Could  be  more  –  "other" 
or  "bodies  governed  by 
public law" not counted 

Source: DG MARKT estimates based on OJ/TED data 

Due  to  limited  room  to  manoeuvre  in  terms  of  the  "fit"  between  the  current  GPA 
requirements and the current EU rules, the new lighter regime would be available to 
sub-central authorities only i.e. a market representing around 33% of CANs (approx. 
45,000 p.a.) and worth some €116 billion p.a. (28% of total) based on 2009 data (see 
overleaf). 

This  estimated  global  figure  could  be  significantly  higher  as  sub-central  authorities 
very frequently publish their notices as “bodies governed by public law” or "other".  

EN 

189 

   EN 

 
 
Figure  38):  Shares  in  the  number  of  CANs  and  value  of  procurement  published  in  OJ/TED  in  2009  by 
type of authority [in %] 

33%

28%

20%

14%

19%

21%

18%

22%

16%

9%

number
value

35%

30%

25%

20%

15%

10%

5%

0%

Central

Sub-
central

Utilities

Other

Body
governed
by public
law

8.7.7. 

STR.LEGI.FACILIT - Directly linked externalities taken into account 

Source: DG MARKT estimates based on OJ/TED data 

If  the  need  for  selection  and  award  criteria  to  have  a  strong,  objective  link  to  the 
object  of  contract  purchase  were  to  be  weakened  it  would  be  necessary  to  ensure 
safeguards  to  avoid  the  imposition  of  discriminatory  criteria  and  uphold  treaty 
principles. For example one could use sustainable criteria that are not related to the 
physical characteristics of the product but only to the process by which it had been 
produced. Such criteria might however increase the costs and time taken for CAEs, 
particularly  in  the  tasks  of  drafting  specifications  and  evaluation  of  offers.  Again, 
they might need to invest in additional training, or the use of experts, to achieve the 
required level of knowledge. 

26 of the 30 EEA MS have targeted specific product groups (in general, some or all 
of  the  product  groups  for  which  the  Commission  has  established  criteria)  in  their 
action  plans.  Construction  and  transport  are  among  the  most  common  product 
groups.  These,  together  with  Office  IT  equipment,  make  up  a  considerable 
proportion of the total value of contracts awarded above the thresholds amounting to 
more than € 100 billion. Construction and transport have been identified in the 2011 
European  Energy  Efficiency  Plan  as  having  the  greatest  energy  saving  potentials. 
They are thus in a strong position to meet national targets. 

Examples of the benefits of GPP (taken from the Buying Green Handbook 2011): 

•  The City of Vienna saved €44.4 million and over 100,000 tonnes of CO2 between 

2004 and 2007, through its EcoBuy programme. 

•  3  million  tonnes  of  CO2  would  be  saved  in  the  Netherlands  alone  if  all  Dutch 
public  authorities  applied  the  national  Sustainable  Public  Procurement  criteria, 
which include green criteria. Public sector energy consumption would be reduced 
by 10%. 

EN 

190 

   EN 

 
 
•  If all IT purchases in Europe followed the example of Copenhagen City Council 
and  the  Swedish  Administrative  Development  Agency,  energy  consumption 
would be cut by around 30 terawatthours – roughly the equivalent of four nuclear 
reactors. 

•  £40.7  million  (€47.2  million)  could  be  saved  in  the  UK  if  the  proposed 
Government  Buying  Standards  (GPP  criteria)  are  applied  by  all  central 
government  departments  and  executive  agencies,  according  to  a  cost-benefit 
analysis which monetised the potential impacts. 

•  CO2  emissions  would  be  cut  by  15  million  tonnes  per  year  if  the  whole  EU 
adopted the same environmental criteria for lighting and office equipment as the 
City of Turku, Finland – reducing electricity consumption by 50%. 

8.7.8. 

STR.LEGI.FACILIT - Innovation partnership 

Pre-commercial procurement is considered as a well-suited instrument for promoting 
innovation by a large majority of respondents to the Green Paper consultation. Most 
stakeholders are also clearly in favour of further measures to promote and stimulate 
innovation through public procurement and have suggested that more widespread use 
of  the  competitive  dialogue,  design  contest  and  in  particular  the  negotiated 
procedure, as well as a wider allowance of variants and performance requirements in 
technical specifications could be helpful. 

According  to  a  recent  survey  of  contracting  authorities,  48%  seek  innovative 
products, solutions or services in their tender documents on at least some occasions; 
7% indicate that they aim to do this as much as possible and 10% indicate that they 
do so regularly190.  

Procurement  officers  have  to  be  particularly  experienced  in  order  to  encourage 
innovative  solutions  without  restricting  competition.  The  difficulty  comes  from  the 
need to evaluate and compare different solutions or products at an early stage, while 
they  are  still  far  from  entering  volume  production.  Of  the  survey  participants  55% 
believe  the  procurement  procedure  to  be  more  complex  if  innovation-promoting 
requirements are included in calls for tenders.  

Simply  allowing  for  variants  or  alternative  solutions  does  not  signal  to  potential 
suppliers that the contracting authority is looking for an innovative solution. The aim 
of  the  new  innovative  partnership  procedure  would  allow  CAE  to  clearly  indicate 
their interest in such proposals, while retaining broad competition and ensuring that 
the procedure could be conducted in stages and reviewed as the solution approached 
full scale production to enable the partnership to be terminated and a normal call for 
tenders initiated. 

190 

Adelphi study page 82, for complexity (below) see page 140. 

EN 

191 

   EN 

 
                                                 
8.7.9. 

STR.LEGI.ENFORC - Quotas in strategic procurement 

Most  stakeholder  groups,  including  businesses,  public  authorities  and  Member 
States, which responded to the GP consultation are against introducing obligations on 
"what to buy" in EU public procurement rules.  

Most frequently raised arguments against such obligations are the fear of too much 
interference from the EU in the decisions of public purchasers, increased complexity 
of the legal framework, the risk of affecting contracting authorities’ ability to adapt 
their  purchasing  decisions  to  their  specific  needs,  risks  of  price  increases  and  of 
disproportionate  administrative  costs  for  public  purchasers  and  businesses, 
particularly SMEs. 

MS have already established national action plans (NAP) in order to set a (generally 
non  obligatory)  targets  for  increased  levels  of  green  public  procurement  within 
certain groups of products. These NAPs have not yet been evaluated in most MS and 
it is not clear whether they are having a significant impact on contracting authorities' 
behaviour.  Establishing  mandatory  quotas  would  seem  premature  while  the 
effectiveness of voluntary measures has not yet been assessed. 

Imposing the use of criteria for strategic goals such as environmentally sustainable or 
socially responsible procurement for a certain percentage of purchases would provide 
no  incentive  for  contracting  authorities  to  consider  which  of  their  purchases  could 
make the greatest contribution to achieving a particular strategic goal at least cost to 
society. 

8.7.10.  ACC.LEGI.FACILIT - European public procurement passport 

The  European  public  procurement  passport  may  be  defined  as  a  "certificate  of 
certificates"  issued  by  a  trusted  agency  in  a  MS  which  includes  in  one  single 
document a statement for each piece of evidence commonly required of an economic 
operator wishing to participate in a call for tenders.  

For  ease  of  presentation,  each  line  of  the  Passport  Certificate  could  be  seen  as 
replacing a traditional evidentiary document or statement that is issued by a specific 
(national or local) public body in a MS to certify a particular status of a given firm 
(e.g. "absence of conviction for the representatives of a company", or "statement of 
compliance with Social Security obligations").  

An  economic  operator  wishing  to  respond  to  a  call  for  tender  would  no  longer  be 
requested  to  include  in  the  tendering  package  all  the  certificates  and  statements 
demanded by the CAE, but would simply attach its own passport certificate instead, 
which incorporates all the statements in one single document.  

The passport is issued by a public agency in the MS, from now on referred to as the 
Passport Agency (PA), upon request from an economic operator. In the application, 
the  firm  spells  out  all  the  evidentiary  elements  that  the  passport  certificate  has  to 
contain  and  the  firm  has  to  attach  to  it  all  the  original  certificates  and  statements 
providing said evidence. The PA verifies the original statements and certificates and 
draws up the passport certificate, providing: 

EN 

192 

   EN 

 
• 

• 

a  binary  positive  or  negative  mark  (e.g.  Y  or  N)  for  all  those  statements  that 
certify  the  presence  or  absence  of  a  given  requirement  (e.g.  "statement  of 
compliance with Social Security obligations"); 

structured  information  to  document  specific  data  for  all  the  certificates  that 
describe  more  complex  situations  (e.g.  the  total  annual  turnover  in  a  balance 
sheet). 

A passport certificate has a validity limited in time. Any CAE in the EU has to accept 
in procurement a passport certificate issued by any EU PA as long as the certificate is 
not expired. 

8.7.10.1. Implications 

The Passport model is essentially a new administrative concept and business model 
rather  than  an  e-procurement  application.  In  fact,  it  can  entirely  be  enforced  using 
traditional paper and mail communication. 

However, it simplifies to a very large extent the automation scenario because it lays 
the foundation for a business document (the Passport Certificate) that is structured in 
a  consistent  manner  and  that  is  issued  by  one  specific  body  in  each  MS  that 
everybody  knows  and  has  access  to.  This  simplifies  to  a  very  large  extent  the 
networking concerns. 

In  addition,  by  decoupling  the  evidentiary  procedure  within  procurement  and  the 
actual  request  of  traditional  certificates  from  the  National  issuers  (which  remains 
indispensible),  the  EU-level  automation  scenario  is  freed  from  the  nightmare  of  a 
CAE  having  to  collect  electronic  evidence  from  the  National  issuers,  which  has 
proved extremely unrealistic so far (and probably will be so for many years to come.)  

As  pre-requisite  for  the  model  to  work  effectively  EU  law  needs  to  define 
unequivocally the evidence that CAEs may ask for. e-Certis would form the basis for 
this. 

8.7.10.2. Advantages and disadvantages 

Advantages: 

the  economic  operator  asks  for  the  statements  and  certificates  from  the 
1. 
National  issuers  only  once  within  the  established  validity  period  of  the  Passport 
Certificate and uses the Passport Certificate an unlimited number of times within the 
validity period; 

2. 
the  Passport  Certificate  is  very  easy  to  standardise  in  an  EU  (language-
independent)  format,  thereby  enabling  automated  processing  (evaluation)  of  the 
information at the receiving point (i.e. the CAE e-procurement system). 27 national 
PA, under various possible arrangements, can easily be asked to collaborate over IT 
solutions; 

other  technical  issues  inherent  to  cross-border  e-procurement,  such  as 
3. 
authentication of the evidentiary document, would also greatly be simplified due to 
the simplification of the networking model; 

EN 

193 

   EN 

 
4. 
Cross-border recognition of certificates and attestation would no longer be an 
issue  because  CAEs  are  bound  to  accept  the  Passport  Certificate  coming  from  EU 
recognised bodies (i.e. the PA); 

The model would be implemented supporting any National infrastructure as is. 
5. 
The EU regulatory / legislative jurisdiction is just limited to the relationship between 
a  CAE  and  a  PA,  leaving  with  the  MS  the  responsibility  to  define  the  model  for 
requesting, documenting and obtaining a Passport, as well as to define rules to set up 
and  run  the  national  PA.  Countries  that  have  implemented  e-Certificates  and  e-
Attestation solutions (e.g. VCD-based) would take on board all their own established 
assets. (The task of collecting certificates and attestations issued within a country is 
shifted from the contracting authority to the PA that will use all the mechanisms and 
infrastructure already in place to do so). This would enable to seamlessly support in 
cross-border  applications  very  different  maturity  models  -  MS  that  are  more 
advanced  in  the  "dematerialisation"  of  certificates  will  apply  very  efficiently  the 
business model without being affected by the delay that may occur in other MS. 

Downsides of the solution: 

1.  MS are requested to set up a new public service (the PA) either as an entirely 
new body or as a specific division of an existing body; 

The workload for the PA would be quite significant, receiving a great deal of 

2. 
applications to be examined plus renewals each time the passport certificates expire. 

8.7.11.  GOV.LEGI.TARGET - New organisation of CPBs 

Through  the  aggregation  of  demand  CPBs  could  significantly  diminish  costs  of 
procedures.  As  mentioned  before,  one  for  of  aggregated  purchasing  –  running  a 
framework  agreements  is  associated  with  lower  cost  than  running  "standard" 
restricted or negotiated procedures191. However, procurement techniques that involve 
aggregation  usually  take  longer  to  award  than  non-aggregated  procurement 
processes192. 

CPBs would improve the professionalisation of procurement as they would have the 
specialised  skills  and  expertise  in  running  procurement  transactions.  CPBs  are  also 
better  resourced  to  carry  out  procurement  involving  pursue  of  strategic  objectives 
(e.g.  CPBs  would  have  the  expertise  to  evaluate  complex  or  sophisticated  tenders 
regarding new, innovative or eco-innovative products and services).  

While impacts of the expected growing importance of CPBs are to be evaluated, it is 
important  to  notice  that  aggregation  of  demand  as  such  could  have  some  negative 
impacts on transparency and competition. 

191 

192 

The  costs  per  procedure  for  CAEs  are  €5,400  in  the  case  of  a  framework  agreement,  whereas  it  is 
€9,000 for the restricted and €5,800 for the negotiated procedures, although the framework contracts are 
still  slightly  more  expensive  for  CAEs  than  the  open  procedure,  which  typically  costs  €5,100  per 
transaction; for more details see: section 8.8.4. 
66 calendar days in case of framework agreements and joint purchasing, compared with an average of 
58 day for all procurement or 53 days for non-framework contracts; see: section 8.7.4.1. 

EN 

194 

   EN 

 
                                                 
8.7.12.  GOV.LEGI.ENHANC  –  Oblige  Member  States  to  identify  national  authority  in 
charge  of  implementation,  control  and  monitoring  of  public  procurement  which 
reports annually on performance 

8.7.12.1. Current situation  

All  MS  have  an  audit  system  on  public  procurement  and  contracting  authorities. 
Audits  are  not  necessarily  focussed  on  the  proper  application  of  EU  public 
procurement  rules,  but  include  in  most  cases  a  check  list  on  the  respect  of  public 
procurement  national  rules.  In  many  MS  this  ex-post  control  is  already  flanked  by 
ex-ante control or advice. However this is not always done in a structured and similar 
way in all MS. 

Consultations  with  the  Member  States  193  show  that  Member  States  consider  that 
their  own  surveillance  of  their  CAEs  is  currently  too  weak.  Many  Member  States 
admit  that  there  are  still  too  many  failures  which  could  have  been  avoided  if  the 
structural weakness had been addressed in advance.  

According to the most recent overview conducted in 2010 by the PPN and including 
institutional aspects, at least 17 MS already have a body in charge of legal oversight, 
legal  advice  or  technical  advice  to  CAEs.  The  establishment  of  this  type  of 
supporting  body,  endowed  with  greater  or  lesser  powers  depending  on  the  local 
situation,  has  already  been  expanding  across  MS  on  their  own  initiative, 
demonstrating the strong demand for consistent advice, ex-ante control of respect of 
public procurement rules (at least at national level) and for independent and objective 
opinion on the functioning and performance of procurement policies.  

Currently,  as  discussed  in  the  problem  statement,  insufficient  expertise  in  the 
preparation  of  public  procurement  contracts  leads  to  the  bad  drafting  of  calls  for 
tender  and  inefficient  management  of  the  various  phases  of  the  procurement 
procedure. Whilst the 2011 evaluation stated that litigation costs are overall a minor 
part  of  procurement  costs,  there  is  wide  agreement  that  litigation,  and  the  fear  of 
incurring it is a major factor influencing the behaviour and choices made by CAEs 
and businesses. 

8.7.12.2. Reporting obligations: 

The oversight body could also take over the responsibility of meeting the statistical 
obligations of the existing Directives which are currently addressed to MS, without 
stipulating  which  body  in  a  MS  needs  to  collect  and  compile  the  statistics.  Some 
adaptations  would  be  needed  because  of  the  expected  introduction  of  new  rules, 
compared to the previous regime. 

Moreover  the  existing  monitoring  of  the  social  and  environmental  framework  is 
currently  unsatisfactory  and  should  be  extended  as  MS  are  currently  unable  to 
monitor and supervise the effect of their own national specific policies or to ensure 
that there is no conflict of interest. 

193 

During the ACPC meeting in May 2011, following the presentation of DG REGIO report. 

EN 

195 

   EN 

 
                                                 
8.7.12.3. Technical support 

To-date  technical  support  is  provided  by  either  the  existing  oversight  bodies  or  by 
other  public  bodies  with  a  specific  sectoral  mission.  In  this  area  there  is  a  need  to 
systematise and better structure legal advice and expertise.  

An  OECD  study  on  centralised  purchase  confirms  the  added  value  of  CPBs  in 
providing additional and robust legal expertise, economic advice and detailed market 
knowledge. For instance, Consip has a research department which can consider the 
strategic importance of the evolution of markets for IT products and services in the 
procurement field. This study also notes that public procurement must become more 
professional; not only because of the changing legal environment, but because of the 
increasing number of policy objectives it is being used to serve in the current context. 
In  principle,  such  advice  could  equally  be  provided  via  the  "knowledge  centres" 
being proposed or by the national oversight body. 

CAEs constantly face the need to respond to evolving markets and procurement can 
require specialised skills either from an economic or from a technical or legal point 
of  view.  Some  forms  of  procurements  which  serve  to  satisfy  modern  society  needs 
are  very  sophisticated  (e.g.  Competitive  dialogue  or  PPPs).  A  2008  UN  study 
("Guidebook  on  promoting  good  governance  in  PPPs")  demonstrated  the  need  for 
sound governance for PPPs and insisted that such contracts are challenging because 
of  the  skills  needed  all  along  across  life  (from  preparation  to  negotiation  to 
management of the project). The study found that the vast majority of the CAs have 
no such skills and need private consultants, which may generate considerable costs. 

It  is  interesting  to  consider  the  example  provided  by  Finland  during  a  CCMP 
discussion (May 2011) where it mentioned a hot-line intended to provide assistance 
in the context of EU co-financed contracts. Finland indicated that a small help-desk 
unit costs to the state €200.000 (according to the minutes of the meeting), showing 
that  structures  delivering  positive  impacts  can  be  put  in  place  without  incurring 
major cost. 

The financial burden of such services is shared in different ways in different Member 
States. Either CPB services are financed by a specific government budget line or they 
can  be  paid  for  on  a  fee  basis  (with,  for  example  a  charge  based  on  a  certain  the 
percentage of the contract value, e.g. 0.6%). 

Support  to  businesses  is  already  provided  through  existing  networks  such  as  the 
single  points  of  contact  used  for  the  services  directive,  or  chambers  of  commerce, 
which currently advise business on public procurement issues in a large number of 
MS. In this case it may only require some adaptation to the type of advice, such as 
providing  better  training  in  order  to  upgrade  existing  expertise  and  provide  a  clear 
legal framework at national level.  

8.7.12.4. Conclusions 

Whilst many Member States have some oversight and reporting structures in place, 
they  vary  considerably.  Several  publications  and  discussions  point  to  a  need  for 
increased  consistency  of  application  and  monitoring.  However  the  actual  structures 

EN 

196 

   EN 

 
put  in  place  would  need  to  be  adapted  to  individual  circumstances  and  existing 
provision. It would not be proportionate to dictate a "one size fits all" solution. 

8.7.12.5. Possible impact of creating oversight bodies (back of the envelope calculations) 

An initiative to establish oversight bodies in all MS would have the most significant 
impact on those MS that are currently without any centralised body carrying out such 
oversight. For Member States where such bodies already exist, the impact would be 
limited, consisting mainly of adjustment of an institutional nature due to the need to 
adapt  and  probably  complete  the  range  of  activities  and  powers  or  to  ensure 
independence, from a tutelary ministry. 

Little information is publicly available on the costs incurred by MS with a body or 
department  specifically  in  charge  of  public  procurement.  It  would  appear  that  the 
staff involved at present ranges from 25 to 200 people according to the exact tasks 
and size of the MS concerned (e.g. 20 people in small units like SE or BE or 200+ in 
bigger structures). 

The number of staff involved in the largest CPBs (which also function as knowledge 
centres  ranges  from  100  to  900  people  (with  a  rough  average  of  250  people). 
Assuming that MS will adopt a centralised structure to ensure technical assistance to 
CAs, financial and administrative burden would be probably equal to a medium-size 
CPB. Here we assume that implies an additional staff of around 150. 

Based  on  an  average  monthly  cost  of  labour  of  €2,266194  (Eurostat),  and  assuming 
that all Member States will set up completely new structures for an oversight body, 
containing 150 staff, with an additional 50% to cover overhead costs, the estimated 
total cost would be around €165 million per year across EU. These figures are very 
rough, and could be easily criticised - the staff cost is low and does not assume any 
management  structure,  but  the  number  of  staff  is  perhaps  high  –  so  there  may  be 
some "netting out". 

However,  such  oversight  bodies  should  generate  savings  and  benefits195  which 
would, ultimately, enhance compliance and reduce errors. A recent study196 showed 
that  publishing  an  Invitation  to  Tender  (ITT)  is  associated  with  1%  reduction  in 
award value of the contract, (compared to the initial estimated value) and that the use 
of an open procedure increases estimated savings by 3%. Hence, the total effect for 
using an open procedure and publishing a contract notice is about 4%. 

During  the  audits  carried  out  by  DG  REGIO  in  the  context  of  structural  funds 
implementation,  an  average  of  40%  of  irregularities  detected  were  attributable  to 
public  procurement197.  The  most  frequent  weaknesses  related  to:  an  inadequate 

194 
195 

196 

197 

Eurostat, Monthly labour costs in 2005 (based on table "tps00174") 
The National Audit Office in UK, scrutinising public spending on behalf of Parliament states that "Our 
work leads to savings and other efficiency gains worth many millions of pounds: at least £9 for every £1 
spent running the Office." 
Europe Economics, Estimating the benefits from the Procurement Directives", London 2011, see page 
vi. 
In 2009 Report , of the European Court of Auditors found that 43% of errors are attributable to public 
procurement,  and  this  represent  three quarters  of  the  estimated  error  rate  which  was  estimated  by  the 
court as being 5%.  

EN 

197 

   EN 

 
                                                 
assessment  of  bids  (40%);  absence  of  tendering  or  awards  based  on  inappropriate 
tendering  procedures  and  award  of  supplementary  contracts  without  competition 
(34%);  and  non-compliance  with  publication  requirements  (22%).  The  same  audit 
identified the causes of errors to be the weak management and control systems at the 
level  of  managing  authorities/intermediate  bodies  and  the  lack  of  administrative 
capacity  and  knowledge  of  the  public  procurement  rules,  both  at  the  level  of  the 
managing authorities and at the level of contracting authorities. Similar findings were 
confirmed by the European Court of Auditors, in its 2009 Report. 43% of errors were 
attributable  to  public  procurement,  which  represented  three  quarters  of  the  total 
estimated  error  rate  of  5%.  This  would  imply  that  the  error  rate  corresponding  to 
public procurement irregularities is of 3.75%. 

Considering  that  the  oversight  body  should  reduce  at  least  the  errors  due  to  the 
wrong choice of procedure and inadequate publication, a rough estimate of savings 
would be around €360 million198 across EU. Compared to the costs of setting up and 
running the structures, estimated at €165 million, this would result in a net saving of 
around  €200  million.  A  reduction  in  errors  and  a  potentially  increased  compliance 
rate  could  also  lead  to  a  reduction  in  the  number  of  infringements,  which  would 
generate further savings.  

8.8. 

ANNEX 8 – Background data to support the analysis of impacts  

8.8.1.  Comparison between above and below EU-thresholds procurement 

In a recent survey, CAE have been asked about perceptions concerning comparisons 
between  above  and  below  EU-threshold  procurement.  Most  purchasers  have  seen 
time and costs as being higher in above-threshold procurement (see: Figure 39). 

Figure 39): Comparison of above versus below EU threshold procurement (replies by CAEs)  

Open

Restricted

Negotiated

Time process

Cost process

Risk of complaints

Transparency 

Fairness

No. of bids

9% 

Efficiency

14% 

Bids from abroad

7% 

Price improvements

Quality improvements

32% 

27% 

23% 

14% 

17% 

12% 

17% 

8% 

14% 

6% 

15% 

4% 

ss

ss

s

y 

s

s

28 %

38 %

26 %

27 %

16 %

15 %

23 %

10 %

19 %

7 %

19 %

7 %

ss

ss

ts

y 

s

s

11% 

6% 

cy

11 %22 %

11 %

5 %

cy

19% 

12% 

4% 

12% 

4% 

11% 

4% 

d

ts

ts

11 %

5 %

14 %

4 %

12 %

4 %

d

ts

ts

28% 

31% 

22% 

18% 

17% 

14% 

20% 

6% 

16% 

6% 

16% 

4% 

12% 

4% 

17% 

4% 

16% 

4% 

14% 

3% 

0 % 25 % 50 % 75 % 100 %

0 % 25 % 50 % 75 % 100 %

0 % 25 % 50 % 75 % 100 %

Much less than for below threshold

Less

No difference

More

Much more than for below threshold

Source: PwC study 

198 

Out of 5% error rate estimated by ECA, we took only 3.75% attributable to public procurement and we 
considered a 4% savings on these contracts. 

EN 

198 

   EN 

 
 
                                                 
Overall,  authorities  consider that the above threshold procedures are  more  or much 
more costly than below thresholds (e.g. 37% in the open procedure versus 13% who 
responded that below threshold were more costly). A large majority of respondents 
consider  that  the  above  threshold  procedures  take  longer  to  complete  (e.g.  between 
59% in the open procedure and 66% in case of the restricted procedure). 

Whereas firms are concerned, their perceptions of the differences between above and 
below threshold procedures are more attenuated, however still more respondents see 
the latter as less time consuming. Most firms find the cost of procedures similar (see: 
Figure 40). 

Figure 40): Comparison of above versus below EU threshold procurement (replies by firms)  

Open

Restricted

Negotiated

Time process

Price weight

Cost process

No. of bids

Quality weight

10% 

Transparency 

13% 

Risk of complaints

15% 

Fairness

11% 

Efficiency

7% 

16% 

Bids from abroad

15% 

15% 

23% 

12% 

e

20% 

10% 

e

19% 

10% 

21% 

5% 

18% 

6% 

t

s

y

11% 

18% 

6% 

y 

17% 

16% 

18% 

16% 

13% 

s

s

y

d

13% 

8% 

20% 

16% 

10% 

20% 

18% 

20% 

8% 

19% 

15% 

17% 

11% 

14% 

4% 

e

e

t

s

y

11% 

17% 

4% 

y 

12% 

10% 

5% 

s

15% 

15% 

3% 

16% 

3% 

8% 

s

y

d

19% 

16% 

14% 

21% 

13% 

20% 

10% 

21% 

11% 

13% 

19% 

8% 

11% 

15% 

11% 

15% 

7% 

14% 

7% 

9% 

0 % 25 % 50 % 75 % 100 %

0 % 25 % 50 % 75 % 100 %

0 % 25 % 50 % 75 % 100 %

Much less than for below threshold

Less

No difference

More

Much more than for below threshold

Perceptions of higher level of competition in above EU thresholds can be observed 
across both types of respondents (CAE and businesses).  

8.8.2.  Comparison between above EU-thresholds procurement and private procurement 

Source: PwC study 

While comparing public procurement with private procurement, a clear observation 
emerges that the costs of public procurement are higher or much higher. Efficiency 
of  private  sector  procurement  is  also  rated  higher  than  for  public  procurement.  On 
the other hand, fairness and transparency are rated higher in public procurement.  

The results below were based on a survey of about 1,500 (out of the 1,800 firms in 
the sample) who reported having experience with private sector procurement (i.e. sell 
side). 

EN 

199 

   EN 

 
 
Figure 41): Perceived timing and cost of above EU threshold public procurement compared with private 
procurement – survey among firms 

Open

Restricted

Negotiated

Time process

Cost process

Transparency 

Risk of complaints

Price weight

13% 

Fairness

8% 

17% 

No. of bids

4% 

16% 

Quality weight

9% 

16% 

27% 

32% 

27% 

30% 

s

s

26% 

14% 

y

17% 

21% 

23% 

13% 

s

t

27% 

26% 

31% 

32% 

s

ss

24% 

11% 

y 

19% 

11% 

s

16% 

26% 

12% 

ht

16% 

24% 

9% 

s

5% 

19% 

22% 

10% 

s

4% 

17% 

18% 

8% 

t

5% 

19% 

26% 

8% 

s

4% 

19% 

24% 

11% 

s

2% 

13% 

16% 

8% 

ht

5% 

24% 

Efficiency

15% 

23% 

17% 

6% 

y

16% 

29% 

18% 

7% 

y

10% 

30% 

Bids from abroad

12% 

18% 

11% 

6% 

d

16% 

15% 

16% 

3% 

d

6% 

16% 

26% 

24% 

22% 

25% 

19% 

10% 

16% 

14% 

26% 

7% 

24% 

7% 

15% 

7% 

11% 

4% 

16% 

9% 

9% 

6% 

0 % 25 % 50 % 75 % 100 %

0 % 25 % 50 % 75 % 100 %

0 % 25 % 50 % 75 % 100 %

Much less than private sector

Less No difference More  Much more than private sector

Source: PwC study 

8.8.3.  Litigation costs 

According  to  a  recent  study,  about  350’000  person  days  is  spent  annually  across 
Europe  on  managing  complaints  and  litigation  for  government  authorities199. 
Multiplying  the  above  estimate  by  average  daily  labour  costs200  provided  by 
Eurostat, we arrive at around € 54 million of cost per year.  

It is  important to  notice, that these costs refer  to the CAE  only. Much  higher  costs 
can be incurred by firms, which frequently seek legal assistance and finally make a 
decision  not  to  lodge  a  claim  against  CAE  (as  they  take  into  account  reputational 
risks  linked  to  such  action).  These  costs  are  very  difficult  to  track  as  they  do  not 
appear in statistics on number of legal cases opened / closed, etc. To estimate such 
cost we base  our  calculation on input data  of  an average  number  of bids submitted 
per  invitation  to  tender  (i.e.  typically  5.4  bids).  Apart  from  the  winner,  we  assume 
that  the  remaining  4  plus  unsuccessful  bidders  may  seek  legal  advice  to  decide 
whether or not the award decision is worth contesting. If we assume the worst-case 
scenario i.e. that in all CANs201 unsuccessful bidders202 did so spending one person 
day on legal assistance, we would arrive at another €85 million203 of costs for legal 
advice (for firms). The above estimate is of course rough, as not all firms who lost a 
procurement  contract  would  seek  legal  advice.  On  the  other  hand,  we  can  suspect 
that  for  those  firms  which  do  so,  costs  incurred  may  be  higher  than  €154  (i.e.  take 
more time than one person day) and that labour costs in legal counselling are much 
higher than an average for the whole economy. 

199 
200 

201 
202 

203 

Source: PwC study, page 80. 
Eurostat,  Monthly  labour  costs  in  2005  (based  on  table  "tps00174"):  €2,266,  divided  by  20  working 
days, plus 9% inflation (2005-2009) and 25% uplift, equals €154 of daily labour cost.  
138'000 CANs in 2009. 
An average of 5.4 bidders per contract means that at least 4 of them were unsuccessful and might have 
sought legal advice.  
138'000 contracts * 4 unsuccessful bidders * € 154 of average labour cost per day. 

EN 

200 

   EN 

 
 
                                                 
To  summarise,  if  public  procurement  regime  was  simplified  with  regards  to  rules 
defining  its  scope,  up  to  around  €  140  million  of  litigation  and  legal  advice  costs 
could be saved per year by both CAEs and firms (see: Figure 42). 

Figure 42): Estimated annual costs of litigation and/or legal advice in million € 

54.05

CAEs

firms

85.25

As  far  as  public  authorities  are  concerned,  diminished  costs  of  legal  assistance 
associated  with  avoiding  (perceived)  legal  uncertainty,  reducing  risk  and  dealing 
with 
in  principle  have  certain  positive  budgetary 
consequences (i.e. generate budgetary savings).  

legal  challenges  could 

Source: DG MARKT estimates 

8.8.4.  Costs of procedures  

The introduction of unlimited right to use the negotiated procedure with publication 
of a CN could generate some savings in terms of cost-efficiency of procedures, as the 
negotiated  procedure  is  globally  cheaper  than  the  open  procedure  (respectively  € 
26'000,  compared  to  €  27'200  per  procedure,  see:  Figure  43  below).  It  is  however 
necessary  to  underline  that  the  global  lower  cost  for  the  negotiated  procedure  is 
driven  by  the  fact  that  it  attracts  less  competition204  (5.2  bids  per  tender  is  usually 
submitted in  the negotiated  procedure, compared to 6.4 bids  per tender in  the open 
procedure).  

204 

If the factors of the above multiplications were to be analysed separately (i.e. costs of procedures for 
CEAs  and  costs  for  firms,  without  taking  into  account  competition),  one  could  point  out  that  the 
negotiated procedure may actually be more expensive, as it has higher unit costs per participant: costs in 
the open procedure are € 5'100 for CAE and € 3'500 firms; costs in the negotiated procedure are € 5'800 
for CAE and € 3'900 firms. [reasons why we included competition]  

EN 

201 

   EN 

 
 
                                                 
Figure 43): Typical cost of competition 

Authorithy € ('000)

Works
Supplies
Services

7,2
4,8
5,5

Open
Restricted
Negotiated

5,1
9,0
5,8

Frameworks

5,4

Total

5,5

+(Firm € ('000)*Bids)
5,3
7,8
3,1
5,3
3,8
5,9

3,5
6,1
3,9

3,2

3,8

6,4
5,4
5,2

5,5

5,9

=Total € per competition ('000)

48,2
21,3
27,9

27,2
41,7
26,0

23,0

27,9  

Source: PwC, Ecorys, LE 

If we look at the global calculation (knowing that the negotiated procedure typically 
attracts less bids), it seems that a general permission to use the negotiated procedure 
could generate savings in the total costs of procedures.  

8.8.5. 

SMEs impacts 

As  has  been  discussed  above,  the  role  of  SMEs  in  public  procurement  is  very 
important.  Throughout  the  course  of  this  Impact  Assessment  and  the  various 
supporting studies, care has been paid to identify issues of particular importance to 
SMEs. In particular, a specific study was conducted in 2010 that focused on SMEs’ 
access  to  public  procurement  markets205.  The  GP  consultation  asked  a  number  of 
questions  addressing  issues  affecting  SMEs  and  start-ups  and  responses  were 
received  from  several  SME  organisations.  Similarly  the  e-procurement  GP  asked 
"What  further  steps  might  be  taken  to  improve  the  access  of  all  interested  parties, 
particularly SMEs, to e-Procurement systems?". Two SME organisations replied, as 
did seven chambers of commerce whose members would be likely to include SMEs. 

The Commission has made a clear commitment to support and promote the interests 
of  SMEs.  The  importance  of  this  policy  and  the  desire  to  make  sure  that  these 
objectives are met is echoed in the general objectives of public procurement policy, 
which set out to ensure a fair and level playing field, where markets are opened to all 
in a non-discriminatory manner. In addition, one of the operational objectives set to 
resolve issues of access clearly states the intention to facilitate participation by SMEs 
in  public  procurement  markets.  The  options  proposed  under  ACC.LEGI.ENFORC 
and ACC.LEGI.FACILIT would promote different ways of increasing SME access, 
training 
whilst  ACC.SOFT  could  consider  complimentary  guidance  and 
programmes, ensuring SMEs are "tooled up" for any new changes.  

8.8.6.  Administrative burden 

Public  procurement  was  identified  as  one  of  the  13  priority  areas  for  consideration 
under the "EU project on baseline measurement and administrative costs". Using the 
Standard  Cost  Model  (SCM)  methodology,  the  administrative  costs  and  burdens 
falling on economic operators as a result of the Directives were measured. The main 
findings are summarised in the box below. 

205 

I.e. GHK study. 

EN 

202 

   EN 

 
                                                 
Main findings in the Public Procurement Priority Area: 

1) On the basis of two Directives and one Regulation, a total of seven EU Information Obligations (IO) and 
Possibilities Stated in the EU Legal Acts were identified. Commission Regulation (EC) No 1564/2005 does 
not include Information Obligations. 

2) The seven EU IOs resulted in 194 national IOs (including 26 Possibilities stated in the EU Act and three 
Possibilities not stated in the EU Act) across the 27 MS. 

3) The total administrative cost of these seven IOs is estimated at a total of €234 million EU-wide.  

4) Of the €234 million of administrative cost, 92.35% (€216 million) have been classified as administrative 
burden. The remaining costs are considered to cover activities which can be classified as "business as usual". 

Source: Final report on public procurement baseline measurement  

This  report  noted  that  the  most  burdensome  IOs  related  to  the  submission  of 
documents related to selection and exclusion criteria. Together these IOs accounted 
for €211.5 million (98%) of the administrative burden on firms.  

EN 

203 

   EN 

 
8.9. 

ANNEX 9 – Glossary 

ACPC (Advisory Committee for Public Contracts)  

Agreement, the: reference equivalent to the GPA (see below) 

A-type  services:  Categories  of  services  (1-16)  mentioned  in  annex  II  A  of  the  Classic 
Directive and annex XVII A of the Utilities Directive, for which the full set of rules stemming 
from the Directives apply; the remaining services are referred to as B-type services 

B-type  services:  Categories  of  services  (17-27)  mentioned  in  annex  II  B  of  the  Classic 
Directive and annex XVII B of the Utilities Directive, for which the Directives provide only a 
limited set of obligations (i.e. observance of the provisions on technical specifications and an 
obligation to inform the Commission of contract awards) 

CAE (Contracting Authorities and Entities) 

CAN (Contract Award Notice) 

Classic Directive, the: 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 

CN (Contract Notice) 

CPB  (Central  Purchasing  Body):  CPBs  are  contracting  authorities  which  either  act  as 
wholesalers (i.e. buy, stock and sell on to other contracting authorities) or as intermediaries 
(i.e. award contracts or conclude framework agreements that will be used by other contracting 
authorities) 

CPV (Common Procurement Vocabulary): CPV establishes a single classification system for 
public procurement aimed at standardising the references used by contracting authorities and 
entities to describe the subject of procurement contracts 

Defence Directive, the: Directive 2009/81/EC of the European Parliament and of the Council 
of 13 July 2009 on the coordination of procedures for the award of certain works contracts, 
supply  contracts  and  service  contracts  by  contracting  authorities  or  entities  in  the  fields  of 
defence  and  security,  and  amending  Directives  2004/17/EC  and  2004/18/EC,  OJ  L  216, 
20.8.2009, p. 76 

Deutsche  Bank  Research:  Deutsche  Bank  Research  paper  published  in  February  2011 
available 
http://www.dbresearch.de/PROD/DBR_INTERNET_DE-
PROD/PROD0000000000269867.PDF 

at: 

Directives, the: in this context, the legislation referred to is 2004/17/EC and 2004/18/EC 

ECJ (European Court of Justice) 

E-procurement: a public procurement procedure initiated, conducted and/or concluded using 
electronic  means,  i.e.  using  electronic  equipment  for  the  processing  and  storage  of  data,  in 
particular through the Interne 

EN 

204 

   EN 

 
E-procurement  GP  (Green  Paper):  Green  Paper  on  expanding  the  use  of  e-procurement  in 
the EU, Brussels, 18.10.2010, COM(2010) 571 final, SEC(2010) 1214, documents available 
at: 
http://ec.europa.eu/internal_market/publicprocurement/e-
procurement/consultations/index_en.htm 

e-procurement Report, the: Commission Staff Working Document, Evaluation of the 2004 
Action Plan for e-procurement, Brussels, 18.10.2010 SEC(2010) 1214 final, available at: 
http://ec.europa.eu/internal_market/consultations/docs/2010/e-procurement/evaluation-
report_en.pdf 

e-Certis:  the  European  Commission  information  system  that  helps  identifying  different 
certificates and attestations frequently requested in procurement procedures across the 27 MS, 
two  Candidate  Countries  (Turkey  and  Croatia)  and  the  three  EEA  countries  (Iceland, 
Liechtenstein and Norway). e-Certis is a free, on-line information tool providing companies 
and  contracting  authorities  with  information  on  the  different  documents  required  when 
tendering for a public contract in another country. At present, e-Certis only covers the most 
frequently requested documents and the data provided is maintained on a voluntary basis by 
MS.  For  more  information  see:  http://ec.europa.eu/internal_market/publicprocurement/e-
procurement/e-certis/index_en.htm 

EMAT  (Economically  Most  Advantageous  Tender):  one  of  the  contract  award  criteria  on 
which the award of a (public) contract shall be based  

EP  Report:  Report  of  the  European  Parliament  Committee  on  the  Internal  Market  and 
Consumer Protection on the new developments in public procurement (2009/2175(INI)), A7-
0151/2010, 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-
//EP//NONSGML+REPORT+A7-2010-0151+0+DOC+PDF+V0//EN 

available 

at: 

Eurobarometer:  large  surveys  based  on  in-depth  thematic  studies  carried  out  for  various 
services of the European Commission or other EU Institutions 

Europe  2020:  Communication  from  the  Commission  on  smart  sustainable  and  inclusive 
growth,  COM(2010)2020  of  03.03.2010;  report  and  related  initiatives  available  at: 
http://ec.europa.eu/europe2020/index_en.htm 

Evaluation  Report,  the:  Report  summarising  the  2011  evaluation  of  public  procurement, 
available 
at: 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/evaluation-
report_en.pdf 

FRA  /  Framework  agreement:  framework  agreements  are  defined  as  agreements  between 
one or more CAE and one or more firms, with the purpose to establish the terms governing 
contracts to be awarded during a given period, in particular with regard to price and, where 
appropriate, the quantity envisaged 

GDP (Gross Domestic Product): a measure of a country's overall economic output. It is the 
market value of all final goods and services made within the borders of a country in a year 

GP  (Green  Paper):  Green  Paper  on  the  modernisation  of  EU  public  procurement  policy, 
towards a mote efficient European Procurement Market, Brussels, 27.1.2011, COM(2011)15, 
at: 
report 

available 

EN 

205 

   EN 

 
http://ec.europa.eu/internal_market/consultations/docs/2011/public_procurement/synthesis_do
cument_en.pdf 

GPA  (Government  Procurement  Agreement):  The  GPA  is  the  main  international  agreement 
relating  to  public  procurement.  The  current  version,  which  was  negotiated  in  the  in  parallel 
with  the  Uruguay  Round  in  1994  and  entered  into  force  on  1  January  1996,  The  GPA 
establishes  a  set  of  rules  which  (a)  govern  the  procurement  activities  of  its  Parties  and  (b) 
enable the Agreement to function as an international one 

GPP (Green Public Procurement) 

IM (Internal Market) 

IO (Information Obligation): term used to estimate administrative burden  

ITT (Invitation to tender): also known as a Contract Notice (CN) 

LCC (life-cycle costing) 

Mario  Monti's  report:  A  New  Strategy  for  the  Single  Market  -  at  the  service  of  Europe's 
economy  and  society,  Report  to  the  President  of  the  European  Commission  José  Manuel 
Barroso 
at: 
9 
http://ec.europa.eu/bepa/pdf/monti_report_final_10_05_2010_en.pdf 

available 

Monti, 

Mario 

2010, 

May 

by 

MS (Member States): the 27 Member States of the European Union  

OJ/TED  (Tenders  Electronic  Daily):  TED  is  the  online  version  of  the  'Supplement  to  the 
Official Journal of the European Union', dedicated to European public procurement 

PIN (Prior Information Notice)  

PP  (Public  procurement):  A  procedure  initiated  by  a  contracting  authority  or  contracting 
entity with a view of acquiring goods, services or works for the fulfilment of its tasks 

Remedies  Directive,  the:  Directive  2007/66/EC  of  the  European  Parliament  and  of  the 
Council of 11 December 2007 amending Council Directives 89/665/EEC and 92/13/EEC with 
regard  to  improving  the  effectiveness  of  review  procedures  concerning  the  award  of  public 
contracts, OJ L 335, 20.12.2007, p. 31 

Utilities Directive, the: 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 

SMA  (Single  Market  Act):  Communication  from  the  Commission  COM  /2011/0206  final  –
Single  Market  Act  –  Twelve  levers  to  boost  growth  and  strengthen  confidence  "  Working 
together  to  create  new  growth",  13.04.2011,  report  and  related  initiatives  available  at: 
http://ec.europa.eu/internal_market/smact/index_en.htm 

SME (Small and Medium-sized Enterprises): the category of micro, small and medium-sized 
enterprises  is  made  up  of  enterprises  which  employ  fewer  than  250  persons  and  have  an 
annual  turnover  not  exceeding  50  million  euro,  and/or  an  annual  balance  sheet  total  not 
exceeding 43 million EUR  

EN 

206 

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TFEU (The Treaty on the Functioning of the European Union) 

EN 

207 

   EN