Lecture 9 - dealing with public entities Flashcards
Dealing with public entities is like a normal sales contract but…
- The buyer is a public body, called contracting authority
- The seller is called an economic operator
What is the definition of public procurement?
The acquisition of goods, services or works through a public contract, by a contracting authority from economic operators.
What is implied by public procurement law?
There is no longer full freedom of contract. Rules exist to reach aims such as:
- Fair and equal treatment of suppliers
- Efficient use of public funds (tax money)
- Transparency
- Anti-corruption
The rules create business opportunities with a more open market that makes it harder to favour domestic/regional suppliers.
What are the public procurement rules in the EU based on, and what directives are important?
The rules are based on the free movement of goods and services, and creates an open procurement market where parties from member states can participate without discrimination. In the long run this will lead to an efficient intra-EU competition.
- Directive 2014/24 on public procurement. Goods, services or works by authorities.
- Directive 2014/25 on utilities procurement. Water, energy, transport and postal services by public or certain private entities (special right to operate).
What are the 7 (5+2) procurement principles in the EU?
- Non-discrimination
- Equal treatment
- Proportionality
- Transparency
- Mutual recognition
(6. Open competition)
(7. Sustainability)
What is implied by EU’s non-discrimination principle?
Authorities shall not discriminate against any tenderers, and may not include requirements which can only be fulfilled by companies in their own country/region even if they only expect domestic tenderers. Language requirements are not seen as discrimination.
What is implied by EU’s Equal treatment principle?
Focuses on treating similar situations equally rather than nationality. All companies and situations shall be treated alike. There can be no preferential or disadvantageous treatment and all tenderers shall have access to the same information from the authority at the same time. The same rules/deadlines shall apply to all tenderers, so one submitted too late can’t be accepted.
What is implied by EU’s proportionality principle?
Requirements set by the authority can’t be unreasonable considering the aim of the procurement.
What is implied by EU’s Transparency principle?
The procurement process shall be open, transparent and predictable. It may not be conducted in secret, and all requirements must be clearly communicated in the procurement documents. All participating tenderers shall be informed of the result, and authorities can make any changes to a procurement procedure once it has been initiated.
What is implied by EU’s mutual recognition principle?
Certificates issued in one EU member state shall be fully recognized in all other member states and can’t be challenged.
What is implied by the two new EU principles that reflect regulatory trends?
Quite vague, not clear what they entail.
- Open competition. Procurements can’t be designed with the intention of narrowing competition, or to exclude them from the scope of the directives.
- Sustainability. Member states should take appropriate measures to ensure that economic operators comply with environmental, social and labor law.
What contracts are covered by the EU directives?
- Public supply contracts (goods). Over 140 000 EUR for Central Government Authorities and over 215 000 EUR for other contracting authorities.
- Public service contracts. Over 140 000 EUR for Central Government Authorities and over 215 000 EUR for other contracting authorities.
- Public works contracts (design/execution of construction/roads). Over approx 5 350 000 EUR.
What are the three parts of a public procurement process?
- Preparations. Preparing procurement documents based on what is needed and on the market - without unreasonable requirements.
- Execution of procurement. The part that procurement law normally regulates. The contract is advertised. Tenders are submitted and evaluated. Someone is awarded the contract and it is signed.
- Contract follow-up. Regulated by normal contract law. Evaluation of if the contract is followed and delivered upon.
What are the two most common procedures for public procurement in the EU?
The authority must in advance clearly explain how they will make their choice.
- Open procedure. Any interested company may submit a tender and the authority makes an overall assessment.
- Restrictive procedure. The open procedure is broken down to two steps. (1) Any interested company may submit a participation request, which is assessed by the authority. (2) Companies that are assessed qualified are invited to submit tenders, which are then assessed.
Why is direct contracting without a regular public procurement procedure not allowed and when CAN it be allowed?
It breaks principles of transparency, non-discrimination and equal treatment. It can be allowed in exceptional cases such as extreme urgency, or when contract is of very low value (<60 000 EUR in Sweden)
