Today is 'electronic procurement day' in the EU

Although the general deadline for transposition of the 2014 public procurement Directives was April 2016, Article 90 of Directive 2014/24/EU provided the Member States more time to get their act together in what concerns electronic procurement.

Well, the deadline for transposition of the remaining electronic procurement obligations contained in the Directive is today.

Now the million dollar question in the Member States that are yet to transpose (or implement) such provisions is: which have direct effect?

My new paper about direct awards in Portugal is out

This happened last week but completely forgot to mention it here. My most recent paper about the use of direct awards (negotiated procedure without notice) in Portugal is out in the newest number of the e-Publica journal. Here's the abstract:

The Portuguese Revised Public Contracts Code misses an opportunity to change the paradigm of how public contracts valued at below EU thresholds are awarded. This paper argues that the changes for low value contracts, where the direct award was replaced for some contracts by the prior consultation procedure (request for quotes) amount to little more than window dressing. This is problematic since 90.2% of all public contracts in Portugal are awarded via direct award, meaning 47.9% all public procurement expenditure is not subject to transparency. As the lack of transparency in low value public contracts is associated with procurement risks such as corruption, strategic behaviour by contracting authorities and bidders or lack of accountability, it is apparent the recent public procurement reform did not really address the behaviours behind these risks.
Portugal could have instead improved transparency in low value contracts by adapting already existing provisions within its legal framework, or following the footsteps of the Public Contracts Regulations 2015 (England and Wales) and the Draft Public Sector Contracts Law (Spain) which introduced significant transparency reforms for low value contracts. Although, there is room for improvement on these, either solution would have provided a marked improvement in the regulation of low value public contracts in Portugal.

The full PDF is available on the usual place (SSRN) but also on the e-Publica website as well.

Links I Liked [Public Procurement]

1. Ireland transposes Directive 2014/24/EU. According to my calculations we now have 9 out of 28 Member States which have transposed the Directive. Croatia may be the next one.

2. Austria is yet to transpose Directive 2014/24/EU. And so is Latvia.

3. A call for more e-procurement in the developing world. Should we just change from talking about e-procurement - what an horrible portmanteau - and use instead digital or online procurement? Just a thought.

And ponder on this sentence for a second: "As one contractor, Ashraful Alam, put it: “Purchasing reams of tender documents and physically submitting them to government procurement entities was difficult for me, let alone winning any contracts. I lost interest in bidding after such a lengthy exercise.”

4. When local governments have more professionalized administrations, they are more likely to implement federal program goals quickly. Wondering if this would apply straight on to public procurement.

5. Albert's conference on RegioPost yesterday at the University of Bristol was a great success. The temperature in the room got very hot for comfort and I am not even talking about the unseasonably high temperatures (or the full blast heating). You can find his *extensive* notes/commentary here

Which Member States have transposed Directive 2014/24/EU already?

Out of the 28 Member States, which have transposed Directive 2014/24/EU so far?

Transposed before deadline:

Bulgaria, Denmark, France, Hungary, Slovakia, Slovenia, UK.

 

Transposed after deadline:

Ireland (May 2016, Italy (April 2016)

 

Did not transpose yet:

Czech Republic, Finland, Netherlands, Poland, Portugal, Romania, Spain, Sweden.

 

Unknown (at least for me):

Austria, Belgium, Croatia, Cyprus, Germany, Greece, Estonia, Ireland, Latvia, Lithuania, Luxembourg, Malta,

 

(List up-to-date as of May 10th, if you have information of any country on the unknown heading, please let me know)

Division into lots is not mandatory under Directive 2014/24/EU.

Peter Smith asks this question on SpendMatters Europe today.

My view is that neither the Directive nor the Public Contracts Regulations 2015 impose a definitive obligation of dividing a procurement process into lots.

Article 46(1) of the Directive states that contracting authorities may use lots. If a direct command was meant the appropriate word to use would have been shall and not may. Article 46(4) however authorises Member States to actually mandate the use of lots.

However, that implies that in the transposition the appropriate mechanisms/pieces of legislation are put in place. As I have mentioned many times before, Central Government decided to pretty much copy and paste the Directive, and that option was not taken up. Furthermore, In addition, the second paragraph of Article 46(1) of the Directive expresses the obligation of the contracting authority to explain why no lots were used when the division is not mandatory. In other words, if the Member State does not make the division into lots mandatory, then contracting authorities must provide reasons why they have not done so. Explaining the decision is the extent of their obligation.

As for the PCR2015, Regulation 46 maintains an identical approach to that of the Directive. Paragraph 1 mentions that contracting authorities may use lots and paragraph 2 that there is a need for the decision by the contracting authority to be explained ("an indication of the main reasons").

That is all that is needed.

Public Contracts Regulations 2015 - Regulation 1

As promised yesterday, myself and Albert Sanchez-Graells are kicking off 122 days of running commentary on the new Public Contracts Regulation 2015 which transpose the Directive 2014/24/EU to (part of) the UK.

Before diving into Regulation 1 I would like to make a couple of comments regarding the style and timing of transposition.

Transposition style

As with the previous Regulations, the Government opted to more or less copy and paste the Directive into national law. There are a few sections that do not come from the Directive itself (ie, Chapter 8) but by and large we are talking about of taking the content of the Directive and present it on a “legal” format/style similar to other laws of the country. In my civil law mind I still find it easier to understand the Directive than the transposition even though the content is fairly similar.

The larger point to make here, however, is that by transposing the Directive by simply copying and pasting it, the Government missed the opportunity to fill in the blanks and/or solve any discrepancies left in the original. This produces the benefit of ensuring a degree of real harmonisation with other Member States that followed a similar approach. The caveat of course is that any unclear provision in the Directive will remain unchanged in the national law which compounded with copious amounts of guidance, guidelines and suggestions which will surely follow will make for significant differences in practice. Again, to my civil law mind it made more sense to try and solve those issues directly in law instead of patching them up with guidance further down the line. Personally, between certainty and flexibility, I mostly prefer the first. This is the approach taken in Portugal and Spain for example, where successive procurement Directives are woven into national law, albeit with varying degrees of success and confusion!

If this “light transposition” will make the procurement regulations for England and Wales be similar to some of the other Member States, it remains to be seen how comparable will it make to Scotland. Procurement is a devolved power in Scotland and the Scottish Government is now in the process of transposing the Directive. As both Governments have very different policies for procurement (just think about Community Benefits and what it means in Scotland vs in Central Government) I would not be surprised if both sets of Regulations diverge a lot more than the outgoing ones. I think that looking into the performance of cross-border tenderers over the next few years (ie, English companies in Scotland and vice-versa) will make for a nice research project a few years down the line.

Timing

The second preliminary point I would like to point out to is the timing. As far as I know, the new Public Contracts Regulations 2015 is the first transposition of Directive 2014/24/EU (please feel free to correct me in the comments). Denmark is not far behind but I do not think they are there yet.

Why this sudden rush to get a new law out less than 11 months after the Directive’s publication? The cynic's view can only be that Central Government wanted to get it out of the door before the general election of May 7th, 2015. The actual laying date is an indication of this intention: February 5th is exactly 3 months and 2 day before the election date, pretty much right before the cut off date of the last 3 months of Parliament.

The timing may indicate the fear that the current Government will not be in power come May or an intent of Francis Maude (Minister for the Cabinet Office) in ensuring its legacy as he will be standing down in May as well. The real reason is less important than the consequences: we will be saddled with these Regulations for the foreseeable future. Yes, they can be amended by the next Parliament, but the stake is already firmly planted in the ground that “this is it” in terms of transposition.

It is no surprise then that to comply with the timings Government decided to go for the copy & paste approach instead of a more considerate approach. However, the rush shows some cracks in typos and minor mistakes (there is one right in Article 2).

As an alternative to the full transposition the Government could have done what France did, by transposing temporarily some bits of Directive 2014/24/EU it considered important, while taking its time before undertaking the complete job.

With this interlude out of the way, let’s talk about Regulation 1 then.

Public Contracts Regulations 2015 - Regulation 1 Citation, commencement, extent and application

In addition to the transposition rush, Regulation 1 states that most of the contents will come into force before the end of the month. This is a very short time frame to let contracting authorities and the market now about what is changing and adapt practice accordingly. One can argue that we are mostly talking about the Directive as it was published last year so the rules are not entirely new or unexpected but I digress.

There are a few exceptions to this short vacatio legis though. For example paragraph 3 states that rules on communications and e-certificates of Regulation 22 and 61 come into force only in October 2018, except in the cases where the contracting authority is trying to use electronic means to shorten the usual time limits of a procedure (26th of February) or for central purchasing bodies (18th April 2017). In my view, the new rules on communications are beneficial for both contracting authorities and suppliers and should have had a shorter transition period. I still remember the doomsday discourse in Portugal back in 2008 about the end-to-end e-procurement requirement in 2009 or 2010 (“no one is ready!”; “the fields will remain untended!”; “the sun will not rise tomorrow!") and when the switch was finally flipped, everyone adapted pretty quickly. I am certain the same thing would happen here even if the transition period was shorter.

Regulations 106, 108, 110 and 112 of Chapter 7 and 8 will also come slightly later into force for contracting authorities not performing their functions on behalf of the Crown (April, 2015). These regulations cover mostly contracts below thresholds and they constitute one of the major departures from the Directive 2014/24/EU as they are not covered by those rules.

The final part of Regulation 1 states the extent and application of Public Contracts Regulations 2015. As mentioned in the intro, Scotland is not covered at all. Furthermore, Part 4 (covering Chapters 7-9, which are not part of the Directive) do not apply to the contracting authorities in Wales and Northern Ireland whose functions are wholly or mainly devolved functions. It is actually a shame that this is the case as below-threshold procurement should be the main battleground for regulation and transparency for the next decade.

Albert's post is up here and full of good info.

That’s it for today. Join us tomorrow for Regulation 2.