Widespread problems persist in the way public authorities across the EU contract out work, according to a new report from the European Court of Auditors. Even though the European Commission and the Member States have started to address the problem, there is still a long way to go, say the Auditors. If the situation has not improved by the end of next year, 2016, they recommend that 2014-20 payments to the Member States concerned should be suspended.
The Court of Auditors put out a report after analysing the procurement practice in projects carried out in the Czech Republic, Italy, Spain and the United Kingdom funded with EU money. The Court found a litany of mistakes and bad procurement with errors detected in 40% of procurement procedures which affected competition and transparency. Apparently some contracts were awarded not to the best "bidders". Surely this was a slip up by whomever wrote the press release as one is supposed to award the contract based on the quality of the bid, not the bidder...
While I cannot say I am surprised by the results, there are quite a few caveats to be made here based on my own experience in EU funded projects:
1. Requirements are more demanding than either the Directives, Public Contracts Regulations or internal organisation. You are usually requested to go out to tender at values much lower than the EU thresholds and while I am in favour of a wholesale reduction of thresholds, this is a reminder of the pitfalls arising from a piece meal approach.
2. Practice may be poorer than normal (is it really?!) as usually the people doing the procurement have limited procurement experience and certainly limited procurement experience with "EU-level" procedures. That tells us as well of the importance to design low friction procedures with reduced transaction and opportunity costs for lower contracts. Like these ones.
3. It does not help each funder has its own specific procurement guidelines. How many times can you re-invent the wheel? But it tells millions that procurers whinge and whine against having to follow different procurement guidelines imposed by different funders but see no problem in having their "own" procurement guidelines/practice different from all other contracting authorities. In one case it is called "ad hoc procurement", in the other "flexible or bespoke procurement".
4. Data is bad everywhere in procurement and is not limited to EU-funded projects. I am glad to see the Court of Auditors banging the same drum on this.
5. If auditors want to find problems, they will find problems. I have seen some really **** (sorry, picky) auditors which were effectively looking for problems where there were none. I suspect if all are that thorough then they will indeed spot problems in many situations. That 40% number is incredible.
PS: Here's the actual report.