Simplification for whom?

One of the topics for discussion in last week's Procurement Week was simplification of public procurement and how Brexit could finally enable the simplification of the legal framework in the UK. Simplification, like flexibility, is on the eye of the beholder.

The problem with simplification is that it has different meanings for the various public procurement stakeholders. Simplification for the public sector means fewer constraints when awarding a contract, and in that sense is closer to flexibility than really simplification. As for the private sector, simplification means lower transaction costs and standardisation, ie the certainty the procedure will be identical (or very similar) irrespective of the contracting authority managing it. It is fundamentally at odds with the public sector view of simplification. Although both sides want simplification, what is meant by it is very different.

The simplification oxymoron

There's an intrinsic contradiction between simplification and flexibility when it comes down to the regulation of public procurement. The system can be optimised either for one or the other, but not both at the same time. Let's look at the current Public Contracts Regulations 2015 for example.

The introduction of the ESPD and associated rules on information retrieval about economic operators simplified their life and reduced their transaction costs. They no longer have to provide all the documentary evidence about their capacity or technical capability at the beginning, only later in the procedure. But this does only constitutes a partial simplification: the workload associated was shifted to the contracting authority which is now under the obligation of fishing for this information in national and foreign databases (in first instance). In a sense, this is only right since contracting authorities have long indulged in asking for significant amounts of qualifying information "just in case" without considering the implications of such requirement. Nonetheless, the simplification achieved for one side implied an increase in complication for the other.

As for flexibility, the profusion of different procedures in the last 13 years - particularly those with negotiation involved - provides contracting authorities with ever more specific "tools" to do its job. First, came competitive dialogue. But that was not flexible enough (that is, it did not include the magic n-word), so we can now find on Directive 2014/24/EU competitive procedure with negotiation, innovation partnership and competitive dialogue - all three overlapping like a nice Venn diagram.

No surprise then that we can now find contracting authorities using the competitive procedure with negotiation to award innovation partnerships (here and here) when the latter is supposed to be used by itself. But at least we got flexibility, meaning it is up for the economic operators to adapt and get used to multiple different ways to do the same thing. Guess who will support the cost of all that flexibility?

It is ironic as well that at least in the practice with innovation partnerships contracting authorities are basing themselves on a procedure with more prescriptive rules (the competitive procedure with negotiation) instead of embracing the full flexibility offered by the innovation partnership rules.

One final word about introducing more flexibility in procurement regulation in the UK. The Directives provide ample of space for additional national rules - or national solutions for issues not solved by the Directives themselves. Case in point, how to run the innovation partnership. However, the UK has always preferred the copy paste (sorry, copy out) approach to transposition of EU Directives and refusing to introduce further rules. No surprise then that even the regulation of contracts below EU thresholds is so sparse and restrained. Why would it change with Brexit? Other than the EU Directives no longer being a scapegoat for "we cannot do that" or bad practice, that is.

 

PS: This is not to say simplification for both sides cannot happen - it can - but is very hard to achieve in practice. When done well, electronic procurement might be an example. When done well.