Which article would I change from the public procurement Directive?
Iwas challenged by my good friend Marko Turudic on Linkedin to pick one (and only one) article of the public procurement Directive to change in the upcoming revision. I am going to be very obvious on my choice by picking Article 4 - thresholds.
It should come to no surprise to regular readers of the blog or those knowing me well how much I have an issue with the financial thresholds. They amount to the original sin of the regulatory framework for public procurement in the EU.
They make no sense for two reasons. The first is the discrimination they impose on contracts based on value and the reduction of the scope of the internal market in consequence. The second derives from the first and means that today the size of the internal market is shaped by the external commitments of the Union since we use the same thresholds in the GPA and FTAs covering public procurement, making the proverbial tail wag the dog.
As for the first, what is the logic that for procurement (and I think procurement only) the size of the internal market is determined not by substantive considerations but simply using price as a heuristic. If it is such a great idea why don't we apply the same logic to other areas of EU regulation. EU consumer protection rules for instance? Why is it available of the price of the good/service being acquired and not just for higher valued items? Or the right for passenger compensation for late/delayed flights? Even purely national flights are covered are they not? No one bats an eyelid that a flight from Madrid to the Canaries is as protected as one from Luxembourg to Amsterdam, but only the latter crosses a border.
But let's be even more provocative. Imagine that in the Treaty of Rome, the original six member States decided that free movement of workers was only available for those positions making more than a certain amount a year, for example, above the average salary. How would European society look today? Because no such limitation was implemented, how do we feel today if someone tried to impose such a limitation? Right.
One final provocation, if I may. Let's imagine the same scenario but with free movement of goods. If I want to order a single screw from Poland to be delivered in Greece, I can because the freedom is not curtailed based on the potential or hypothetical relevance of a given transaction to the member State. Now let's imagine that once again, in the negotiations for the Treaty of Rome the member States concluded that it made no economic sense to send small parcels across borders, and as such items valued below x would not be covered by free movement of goods. What if in this alternate universe today someone dares suggesting, hold on maybe that idea is outdated and we really should help the deepening of trade between member States by getting rid of this artificial limitation. Can you imagine the interests groups coming out of the woodwork to protect the status quo and how terrible this would be for local economies, small businesses etc etc. Right.
The flipside of this self-imposed internal limitation is that it is now justified for external reasons, that is those commitments in the GPA or FTAs that cover public procurement. But that is a stupid argument. It is not because the US or Australia are in the GPA that EU economic operators have full access to the American market or those commitments forestall the US from deciding what internal barriers between states it keeps or brings down. So why should we?
If we are really serious about deepening the internal market this artificial boundary that determines if a contract belongs or not to the single market needs to go.