Legal framework for PPI
What is the current legal basis for PPI in Europe?
In January 2014, the European Parliament adopted new public procurement directives.
- Directive 2014/24/EU (which replaces the 'Classic' Procurement Directive 2004/18/EC)
- Directive 2014/25/EU (which replaces the 'Utilities' Procurement Directive 2004/17/EC)
- Directive 2014/23/EU on the award of concession contracts
Member States have to transpose the directives into national law by January 2016. Once the directives have been transposed they are binding for public procurers from all member states.
You can find our analysis of the potential for GPP and SPP of the directives here. DG GROW published introductory factsheets on the reform of public procurement law:
What are the major changes in the new Directives?
The Commission has included changes to the procurement procedures which are expected to increase the uptake of PPI. These include:
- Increased flexibility and simplification on the procedures to follow, negotiations and time limits;
- Clearer conditions on how to established collaborative or joint procurements which, through bulk purchasing, can provide the necessary demand to launch new solutions;
- Strengthening the use of life cycle costing, which describes all the phases through which a product passes from its design to its marketing and the discontinuation of its production;
- The creation of innovation partnerships which enable a public authority to enter into a structured partnership with a supplier with the objective of developing an innovative product, service or works, with the subsequent purchase of the outcome;
- The exemptions for procurement of R&D services currently included in the new Directives (which are the basis for PCP) will be maintained. Public procurers can therefore continue to undertake pre-commercial procurement.
Further points of interest in the new Procurement Directive (2014/24/EU)
- Technical specifications and award criteria may refer to any stage of a product lifecycle, including addressing specific production practices, „provided that they are linked to the subject-matter of the contract and proportionate to its value and its objectives” (Art. 42).
- Product labels can be required as means of proof in technical specifications, award criteria or contract performance conditions as long as all the underlying criteria of the label are linked to the subject matter of the contract.
The label must also meet specific criteria defined in the Directive regarding transparency,
objectivity, accessibility, and credibility.
Bidders must supply the named label or an equivalent label unless they can provide a convincing
argument as to why they were not able to obtain the label in time for the bid.
- Use of ‘most economically advantageous tender’ (MEAT) as default criteria (Art. 67). When transposing the Directives, member states may choose to forbid or restrict the use of lowest price as the sole award criterion.
- The use of life cycle costing (LCC) as a method for assessing tender costs is clarified (Art. 68). Contracting authorities may select to include costs imputed to environmental externalities in this calculation.
- Possibility for greater control over subcontracting practices (Art. 71): the contractor is obliged to disclose the expected level of subcontracting in advance as well as providing, in the case of works and services contracts, contact details and details of legal representatives of any company used as a subcontractor.
- Introduction of a European single procurement document for bidders (Art. 59). This makes it easier to verify and standardise any proofs of environmental and social compliance given by bidders.
Beyond EU boundaries
The EU adheres to World Trade Organization agreement on fair international competition for public contracts. This agreement, known as the Agreement on Government Procurement (GPA), has 39 members including the 27 EU countries. The agreement bans discrimination in the awarding of public contracts and lays down procedural rules.