Each year, supply and public works contracts worth about EUR 300 billion are published by EU public authorities. In Ireland alone, public procurement supports approximately 250,000 jobs, with an annual spend of some €14 billion.
Today, the Irish Presidency reached a provisional agreement with the European Parliament on a revision to how such contracts are tendered and awarded. The agreement concerns three proposals in the procurement reform package relating to:
- General public procurement directive (Classical Directive);
- Procurement in the utilities sector (Utilities Directive)
- Services concessions (Concessions Directive)
This is the first time that a Directive on concessions has been developed as until now regulation at European level has been only partially developed. The Directives aim at simplifying the rules around procurement procedures, reducing the administrative burden on public authorities and potential contractors; thereby attracting a greater number of SMEs as well as reducing the costs of procuring and contributing to a better use of resources. For example, by reducing the number of documents required by each bidder, companies could achieve savings of some 80%.
Welcoming today’s agreement, Minister Howlin noted that “fostering jobs and growth across the EU has been the principle guiding the Irish Presidency.
Minister Howlin - "Reforming public procurement rules offers a significant opportunity to foster growth and create employment across Europe"
The easier access to such contracts for SMEs is a fundamental criterion- there are over 20 million SMEs in Europe, accounting for more than 98% of all enterprises–their exclusion from such contracts made little economic sense. The simplified administrative framework will mean the inclusion of smaller businesses for contracts that have always been clearly within their capacity to perform.”
The agreement also includes incentives for authorities to divide their requirements in lots –something which will also further attract SMEs. Minister Howlin emphasised that “the gains to be had by such revisions are not confined to industry alone-by increasing and broadening access to such contracts we are helping to create competition, to drive efficiencies and ensure the public monies are being used in a cost-effective manner to provide for public need but at the same time support job creation and innovation.”
The negotiations were detailed, lengthy and complex, requiring significant compromise on the part of all three institutions. These compromises will now be examined in depth, ahead of final approval at the Committee of Permanent Representatives and the European Parliament.