ANNEX A
Letter from the British Consultants Bureau
to Rt Hon Clare Short MP, Secretary of State for International
Development
UNOFFICIAL QUOTAS FOR PROJECTS IN BRUSSELS
I mentioned to you recently the on-going problem
British consultants encounter in the application by Brussels of
unofficial national quotas. This is particularly significant when
short-lists are drawn up for work under external aid programmes
which are, of course, BCB's preoccupation. You asked me to provide
you with more detail.
Following EU enlargement, and under-achievement
mainly by southern European consultants, Member States have put
political pressure on the EC to spread the contracts around. The
Commission is at great pains to say publicly that the nationality
of someone seeking to do a project does not enter into their deliberations.
However, in the four years I have been in BCB, officials at all
levels admit privately that they are under considerable pressure
to ensure "countries get their fair share of projects".
This is achieved primarily by only including one or possibly two
firms of each nation at the short-listing stage. Clearly there
are several implications:
— Many of the most experienced and
cost effective consultants, be they individuals, small businesses
or large firms, are ruled out before the final competition.
— It is not the most efficient use
of development resources.
— Such a policy would not appear to
be in the open market spirit of the Treaty of Rome.
— UK has the largest and most developed
independent consulting sector. I emphasise independent
because in many countries of Europe a large number of the consultancies
are simply branches of major industrial or other concerns. As
a result of UK, not unnaturally, wins a good proportion of the
contracts and thus are cast as the villains of the piece.
— We are more affected than anyone
else by an unofficial quota policy.
What is our evidence? As I explained earlier,
on virtually every visit I and my colleagues make to Brussels,
we are told by Commission officials that they have an unofficial
policy to apply a limit where possible of one or two firms per
country per project.
In early June we arranged a briefing session
for some 30 members of BCB in Brussels. This was also attended
by representatives of the DTI. In two specific briefings, the
topic was raised by Commission officials:
(a) A MEDA Task Manager (Femando Perdigao)
referred to a water project in Jordan for which, he said, a number
of British consultants were clearly well qualified for short-list
inclusion. However senior management "forbade" more
than two British firms from being short-listed.
(b) The Task Manager for Energy Projects
in Russia (Robert Nelson) said that he had tried occasionally
to put more than two consultants from the same member state on
a short-list. However his superiors had said that "house
rules" dictated that he must not do so.
Another fudge creeping in is to extend the size
of shortlists to satisfy the poor performing nations. This is
a major demotivator for companies to continue in the competition;
preparation costs can be very expensive often with nugatory results.
After a recent meeting with us in Brussels, Glenys Kinnock took
up the point in the European Parliament and submitted a written
PQ. I delayed writing to you, hoping to include the formal reply
from the Commission, However, given the Commission's somewhat
tortuous procedures this has still not been produced.
Could I ask if you, George Foulkes and your
Officials could continue to reiterate the point in Brussels that
such practices not only result in poorer projects developmentally,
but are also contrary to the spirit of the single market and are
therefore anti-competitive. It would be totally wrong in the EU
context to choose someone to do a project based on their country
of origin rather than their technical ability.
The creation of the common service (SCR) provides
a suitable opportunity to press for far more transparent procurement
procedures. We in BCB strongly believe that a good transparent
system without these hidden quotas would not only lead to better
aid programmes, but also be of benefit to British consultants,
contractors and suppliers when bidding in open competition with
their EU competitors.
We very much welcome the recent initiative by
your EU Department in organising a workshop to consult with the
private sector, the exchange of ideas was very productive. We
continue to be very happy to provide your Officials with a view
on both existing and proposed changes to Commission procedures.
The recent dialogue that has been taking place between one of
my Deputies and Officials in the Know How Fund on the revised
Tacis Regulation is a good example. Fortunately, having members
from across the consulting spectrum we are, I hope, in a position
to give unbiased but productive advice on how these things are
working in practice.
Colin Adams
Executive Director
British Consultants Bureau
13 August 1998
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