7 International procurement
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(34799)
7915/13
COM(13) 143
+ ADD 1
(b)
(34792)
7919/13
COM(13) 142
+ ADD 1
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Draft Council Decision on the conclusion of the Protocol Amending the Agreement on Government Procurement
Annex to the Draft Council Decision on the conclusion of the
Protocol Amending the Agreement on Government Procurement
Draft Council Decision establishing the position to be taken by the European Union within the Committee on Government Procurement with respect to decisions implementing certain provisions of the Protocol Amending the Agreement on Government Procurement
Annex to the Draft Council Decision establishing the position to be taken on Government Procurement with respect to decisions implementing certain provisions of the Protocol Amending the Agreement on Government Procurement
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| Legal base | (a) Articles 207(4), 218(6)(a)(v) and 218(7) TFEU; QMV; consent
(b) Articles 207(4) and 218(9) TFEU; QMV; —
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| Document originated | (a) and (b) 22 March 2013
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| Deposited in Parliament | (a) 27 March 2013 (b) 28 March 20113
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| Department | Cabinet Office
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| Basis of consideration | EM of 9 May 2013
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| Previous Committee Report | None
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| Discussion in Council | June 2013
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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The documents
7.1 The Agreement on Government Procurement (GPA), document (a),
is an international agreement under the WTO whose signatories
agree to mutually open up their public and "utilities"
procurement markets.
7.2 The GPA covers the rules and procedures by which
the Parties will conduct their relevant procurements, plus the
different market sectors which will be subject to the GPA, and
the bodies and organisations within each country which will be
subject to the GPA (the "coverage"). Whilst the main
text of the GPA (covering the procedural rules) is common to all
parties, the coverage (by market sector and procuring bodies)
is unique for each signatory, and is agreed through a series of
bilateral agreements between GPA parties.
7.3 There are currently 42 countries under the GPA,
including the 27 EU Member States; other major signatories include
Japan, Canada, South Korea, Taiwan, Hong Kong and the USA. The
European Commission negotiates on behalf of the EU as a whole;
individual EU Member States are not separately represented. All
the EU Member States have substantially the same coverage with
respect to each of the other GPA parties.
7.4 For the UK and other EU Member States implementation
and adherence to the European procurement Directives encompasses
the requirements of the GPA; there is no separate GPA implementation
required in national law. The financial "thresholds"
at which the EU rules begin to apply are the same as for the GPA;
and Part B services which are currently not subject to the full
EU public procurement regime are also outside the scope of the
GPA.
7.5 The current GPA agreement was negotiated in 1994
and came into force in 1996, and has undergone a prolonged renegotiation.
Revisions to the text of the Agreement were largely agreed as
long ago as 2006. However this was subject to agreement on revised
coverage, and as coverage is agreed through a series of bilateral
agreements this process has been protracted. In December 2011
GPA parties reached agreement at Ministerial level on the outcome
of the coverage negotiations and in March 2012 the GPA parties
adopted the outcome of those negotiations.
7.6 The Protocol will come into force when two thirds
of the GPA parties confirm their acceptance. Upon adoption of
the Protocol, the GPA Committee (representatives of the parties)
will confirm adoption of the Decisions.
7.7 Under the current GPA the EU coverage is already
more extensive than that offered by many of the other parties.
Significantly, the EU already includes "sub-central"
bodies (i.e. local authorities and wider public sector bodies)
within scope. Therefore improved coverage from other GPA parties
under this Protocol, whose markets have hitherto been less open
than in the EU, will be of benefit to EU businesses which wish
to bid in those countries.
7.8 The Commission draws attention to a number of
improvements in the new Protocol compared with the current provisions:
- a restructured text which is
simpler, more user-friendly and more similar to the EU procurement
directives;
- centralised databases of procurement opportunities
(the EU already has Tenders Electronic Daily);
- clearer rules on supplier selection (similar
to EU rules);
- provisions for electronic procurement, including
e-auctions;
- simpler and more flexible statistical reporting;
- transitional measures to encourage developing
and least developed countries to join the GPA;
- a clearer system for modifying coverage;
- simpler rules for modifying and updating the
lists of contracting bodies in a country subject to the GPA rules.
7.9 The coverage has also been improved. It includes:
- the addition of more than 200
contracting entities. All parties that have a "sub-central"
tier now include some sub-central bodies within the GPA;
- reduced derogations/exclusions for various goods;
inclusion of new non-sensitive defence procurements;
- increased coverage of services and construction
(works);
- removal of some discriminatory "buy-national"
and "offset" provisions;
- lower thresholds from some parties; and
- the Commission calculates that the updated agreement
will lead to an additional €30 billion of opportunities for
EU economic operators.
7.10 The decisions implementing certain provisions
of the Protocol, document (b), are set out in a number of Annexes
to the draft Council Decision. These set out a number of future
"work programmes" to be undertaken by the GPA parties
and secretariat:
- Annex A — notification
of technical changes to national procurement laws and bodies covered
by the GPA;
- Annex B — review of public-private partnerships,
common classification of goods and services, and standardised
notices;
- Annex C — encouraging SMEs to participate
in government procurement;
- Annex D — a review of statistical data-gathering
and reporting requirement;
- Annex E — identification of good practice
in sustainable procurement (consistent with value for money and
open trade);
- Annex F — Increasing transparency, and
reducing exclusions and restrictions in GPA parties' coverage;
- Annex G — ensuring high safety standards
in procurement whilst avoiding obstacles to international trade.
7.11 The GPA does not preclude cross-border public
procurement where either or both parties are not from a GPA signatory
(for example under bilateral free trade agreements between the
EU and non-GPA countries).
The Government's view
7.12 In an Explanatory Memorandum dated 9 May 2013,
the Minister for Political and Constitutional Change at the Cabinet
Office (Miss Chloe Smith) says the Government agrees with the
aims of the GPA in principle, and has consistently supported and
encouraged the Commission and the other GPA parties to achieve
the new Protocol. This stems from the UK's policy of supporting
fair and open markets, value for money, probity and transparency
in public procurement, support for growth in the global economy,
and in guarding against protectionism in the current economic
climate. The new GPA Protocol should provide a further opening
of markets and new opportunities for UK firms, and is a positive
step forward in the global trade agenda. Closer alignment of
the GPA procurement-process rules with the EU procurement Directives
should encourage consistent application of the rules. Case-specific
provisions for least developed countries will help promote development
and good procurement practice across GPA countries and potential
accession countries. So the Government welcomes the new Protocol
and wishes to see this Council proposal agreed as soon as practicable.
7.13 The existing EU procurement rules are consistent
with the existing GPA agreement, and as noted above the new Protocol
further aligns the GPA text with EU public procurement law. The
new Protocol agreement will therefore not impose or require change
in practice or procedures by UK public bodies, or utilities; compliance
by public authorities and utilities with the existing EU procurement
rules will continue to ensure compliance with the applicable GPA
rules. UK economic operators which wish to bid for contracts awarded
under GPA rules should find the procedures and requirements generally
consistent with the procedures when they bid for public or utilities
contracts in the UK. The new Protocol should also be consistent
with the updated procurement rules under negotiation in Brussels.
7.14 The Government has not to date undertaken a
detailed analysis of the changes in coverage offered by the other
GPA parties to EU economic operators or vice versa. However,
the EU already offers extensive "coverage" under the
GPA, and in any case the UK does not routinely, or as policy,
exclude bidders, even from countries not party to the GPA. Overall,
other GPA parties have moved further to extend their coverage
than has the EU. So there will be greater new opportunities for
EU and UK businesses to compete in procurements in other GPA countries.
The Government is not aware of specific information to counter
the Commission's claimed additional opportunities of €30
billion for EU businesses.
7.15 The work programme covered in the implementing
decisions appears to be generally consistent with existing EU
procurement rules and with existing UK policies and practice.
For example: work to simplify data gathering requirements; improved
transparency; encouraging SMEs whilst maintaining fair and open
markets; identification of best practice in sustainable procurement;
and further reductions in exclusions and restrictions. These
changes are also moving in the same direction as the improvements
and simplification expected from the new modernised procurement
rules under negotiation. The Government intends continued close
engagement with the Commission to ensure that the EU pushes for
continued improvement to the GPA and convergence by other GPA
parties towards existing EU and UK good practice.
7.16 The UK would like to see the thresholds in the
EU rules raised as these have not been adjusted for inflation
for many years, which leads to the detailed rules applying to
more contracts than originally intended. But the EU thresholds
must remain consistent with the current GPA threshold, or the
EU would be in breach of its GPA obligations.
7.17 The UK has sought an early review of the GPA
thresholds as part of the new work programme, following which
the EU thresholds could be reviewed and raised. There was no
explicit mention of such a review in the GPA Decision Annexes,
but the Commission has achieved an agreement to include a review
in the "statistics" element of the programme.
Conclusion
7.18 We thank the Minister for his Explanatory
Memorandum.
7.19 We note, however, that under "European
Parliament Procedure" the Minister has written "[t]hese
proposals are subject to the ordinary legislative procedure"
(and so would include the first, second, and third reading procedures
set out in Article 294 TFEU). They are not: the conclusion of
the Protocol requires the European Parliament's consent; the adoption
of the implementing decisions in the Committee on Government Procurement
requires neither consent from nor consultation with the European
Parliament. This is a significant mistake in that, were the ordinary
legislative procedure to apply, these Council Decisions would
be draft legislative acts and subject to the relevant provisions
of Protocol 1 on national parliaments and Protocol 2 on subsidiarity
and proportionality. It also shows a misunderstanding of how international
negotiations such as these are concluded under Article 218 TFEU,
which is concerning. We ask the Minister to ensure that the misunderstanding
is corrected for the future.
7.20 On the substance, we share the Government's
support for the adoption of this long-awaited Protocol and the
work programmes to be adopted in the Committee on Government Procurement.
We think the increased coverage of the GPA is particularly welcome
for UK business.
7.21 We now clear the documents from scrutiny.
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