2 Public Procurement in the EU
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; further information requested
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| Document details | Commission Staff Working Document on the Annual Public Procurement Implementation Review 2013
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| Legal base | —
|
| Department | Cabinet Office
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| Document number | (36292), 12642/14, SWD(14) 262
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Summary and Committee's conclusions
2.1 We are reporting this document because of poor
scrutiny handling by the Government, an issue common to other
documents relating to International Procurement covered in chapter
3 of this Report.[10]
2.2 New EU Directives governing the procurement process
undertaken by government and other public bodies for the award
of public and utilities contracts concession and contracts, were
all agreed earlier this year and have cleared scrutiny. However,
the Commission produces a Public Procurement Implementation Review
in an effort to share information and best practice on the application
of public procurement rules. This second review is based on 2011
data from Member States' own annual statistical exercises under
the procurement rules and questionnaires.
2.3 In summary, the Review concluded that public
procurement data remains incomplete across Member States; the
Commission will engage with Member States to improve consistency
of data; and the reliability of future Review conclusions and
reporting requirements under the new Directives should help identify
problems in the application of the rules. The position outlined
in the Review did not change greatly overall compared with the
previous one, except for the increasing take-up in e-procurement
and the significant development of defence procurement following
the transposition of the Directive.
2.4 In an Explanatory Memorandum overdue by some
eight weeks, in summary the Government's view is that the Report
mainly consists of statistical data and related commentary, but
does not draw any firm conclusions or propose new legislative
obligations for Member States. As the UK is a not a "significant
outlier" in the Review, it considers that no substantive
changes in policy are required.
2.5 We recognise that the position, including
that of the UK, outlined in this factual Commission document does
not represent a significant change to the previous Public Procurement
Review. Nor does it raise significant policy, financial or legal
issues. However, we are reporting the document to draw to the
attention of the House the unacceptable delay of eight weeks in
the submission of the Explanatory Memorandum.
2.6 We understand that in the case of this non-legislative
document the delay could not lead to a scrutiny override, unlike
the other documents addressed by chapter 3 of this Report, and
that the Minister for the Cabinet Office and Paymaster General
(Mr Francis Maude) has apologised. We also recognise that we have
now been provided with a comprehensive and detailed Explanatory
Memorandum.
2.7 However, it is important that the Minister
understands that the displeasure we expressed in our conclusions
to that chapter applies equally to this document. Accordingly,
we request that the Minister, when he provides us with the update
we have requested in those conclusions, ensures that he includes
non-legislative documents, like the current document, within the
scope of the update.
2.8 We retain the document under scrutiny pending
the Minister's response.
Full details of the document:
Commission Staff Working Document on the Annual
Public Procurement Implementation Review 2013: (36292),
12642/14, SWD(14) 262.
Background
2.9 The document was deposited for scrutiny on 2
September 2014 and the Explanatory Memorandum, to be submitted
within ten working days, was due on 16 September. It was not,
however, submitted until 13 November, resulting in a delay of
eight weeks.
The current document
2.10 The Review has four chapters: (A) on the economic
significance of the European public procurement market; (B) on
national mechanisms and bodies (administrative and judicial) for
applying procurement rules, including the use of e-procurement;
(C) on Commission and national review procedures for alleged infringement
of the rules; and (D) on the implementation of the Defence Procurement
Directive.
2.11 In (A), the UK led in estimated total value
of OJEU advertised procurements (against a backdrop of the total
value of advertised contracts falling in comparison with 2011),
but was a little below the average in terms of the information
published in Contract Notices and Contract Award Notices. Chapter
(B) revealed the UK to be one of the top four Member States for
e-tendering and close to the EU average for EU-invoicing (within
the context of a significant increase in the use of e-procurement
across the EU in 2011 compared with the first Review). As set
out in chapter (C), the UK was subject to four out of a total
52 cases brought against Member States between 1 January 2010—31
December 2012, with only Greece (14) and Italy (five) having higher
rates (but many of the Member States only facing one, two or no
cases). The UK's high level (60%) of the use of "voluntary
ex ante transparency notices"—where a contracting
authority deems that a contract does not require prior publication
of a contract notice in the OJEU—was noted in chapter (D).
The Government's view
2.12 In an Explanatory Memorandum dated 13 November
2014, the Minister provides the Government's main assessment of
the Review :
"The Review does not propose new European
laws beyond those already recently-adopted, or suggest new obligations
on Member States requiring policy decisions. The data gathered
in the Review does not indicate that the UK is a significant outlier
which would require substantive changes in policy. And as most
figures in the Review are around three years old they will not
cover recent trends.
"The Review points out that the new directives
will require Member States to monitor the application of the procurement
rules, and report to the Commission every three years. The rules
will also require authorities to keep records of their procurement
decisions; these can act as the basis for the reports to the Commission.
The Cabinet Office considers this does not add to authorities'
burdens as relevant information will already be gathered in any
well-run procurement process, and other statistical reporting
obligations will be lifted.
"The proposed UK Regulations transposing
the new public procurement directive also implement a number of
other reforms to open up the public procurement market to SMEs,
including a requirement to publish certain opportunities on "Contracts
Finder". This may also assist in gathering statistical data
on contracts below the EU threshold."
2.13 However, he also provides some explanations
of assessments of the UK position included in the Review. In respect
of the assessment in Chapter A of the Review that the UK led in
estimated total value of OJEU-advertised procurements, the Minister
comments:
"(Although not discussed in the Review,
this might reflect higher average value of contracts in the UK
and the award of public contracts in the UK for activities which
were more often carried out in-house in other Member States)."
2.14 On another assessment in Chapter A, the Minister
says:
"Across the EU, the "open procedure"
(where all interested bidders are invited to tender) continued
to be the most commonly-used. Under present UK Government policy
the use of this procedure has increased in the UK, to reduce procurement
timescales and widen supplier opportunities."
2.15 On the question of the UK's record in respect
of alleged infringements of procurement rules addressed in Chapter
C, the Minister comments:
"The UK was not subject to an excessive
number of infractions (4 of 52 total cases in the period 1 January
2010-31 December 2012). At national level in most Member States
which reported figures, the percentage of total procurements subject
to successful formal complaints was in low single figures."
2.16 In connection with this, the Minister tells
us about a UK initiative to identify possible procurement abuses:
"UK Informal complaint service
"Not covered in the Review but relevant
in the context, and mentioned in the Explanatory Memorandum on
the first Review, the UK Government has introduced a successful
informal "Mystery Shopper" service, for suppliers to
raise concerns about public procurement practice. This has handled
over 700 cases to September 2014, 80% of which have had a positive
outcome. The service has also carried out over 440 "spot-checks"
of procurements across the public sector. In Scotland, the "Single
Point of Enquiry" for suppliers dealt with a total of 277
cases to March 2014. Of these, 76% had a positive outcome."
2.17 On Chapter D, the Minister comments:
"2011 was the first full year in which the
2009 Defence Procurement Directive should have been transposed
in all Member State; the Commission therefore discussed this in
the Review. However as not all Member States had completed transposition,
2011 was a year of transition. France and Germany were the main
issuers of Official Journal notices. The UK was responsible for
60% of all "voluntary ex ante transparency notices";
the Commission suggests this could indicate a high use of the
negotiated procedure without publication, or other procedures
not covered in the Directive."
2.18 Finally, the Minister confirms what the next
steps for the document are likely to be:
"The Review does not contain specific timetables
for actions. We expect the Review may be discussed at meetings
of the Advisory Committee on Public Contracts during the coming
year."
The Minister's letter of 24 November 2014
2.19 The Minister addresses delays in the scrutiny
handling of this document in his letter of 24 November, which
we have already cited in full in chapter 3 of this Report. In
respect of the current document, the Minister says of the late
submission of the Explanatory Memorandum:
"The final EM of the current tranche (11642/14)
[sic] concerns a Commission staff working document, and is not
subject to any specific Council Decision."
Previous Committee Reports
None.
10 The chapter reports on the following documents:
(a) (36316), 12859/14 (b) (36337), 13257/14 and (c) (36342), 13281/14. Back
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