PROCUREMENT AND FINANCE
EU Procurement Directives: Proposals for change
David Noble, chief executive of the Chartered Institute of Purchasing & Supply (CIPS), welcomes “long-overdue” changes to public procurement.
Introduction T
he UK Government is preparing plans to make the most of the proposed reforms to The EU Directives on Public Procurement.
Public procurement makes up 18% of the EU’s annual gross domestic product, so it is critical that this area operates effectively.
The European Parliament has set out rules, expected to be implemented at European level later this year and subsequently at national level, to ensure more effective and transparent use of public money for goods or services to guarantee best value. The proposed rules will establish a clear legal framework and a holistic approach to public procurement and set threshold spending levels for public authorities. The objectives of The EU Directives on Public Procurement are threefold:
• Simplify rules and reduce the length of procedures;
• Free up markets; • Facilitate growth.
The Chartered Institute of Purchasing & Supply (CIPS) welcomes the long overdue modernisation and standardisation of public procurement and is encouraging the implementation of these changes at national level. This article explains why.
Good news for contractors
For contractors, modernising the procurement procedures will mean being able to run procurement processes faster, with less red tape, and engender best practice in suppliers. The directives will create a process of benchmarking performance and standards, so that cost advantage is not the main criterion for awarding a contract; instead, quality, continuity, accessibility, availability and comprehensiveness of service will be the key drivers for successful procurement practice. This will mean more effi cient tendering processes and more emphasis on the best supplier, and ultimately delivering better public service for better value.
In order to maximise this potential, public bodies must continue to prioritise the skill base of their procurement workforce. A more effi cient process will only deliver results if the professionals responsible for implementing them have the experience and specialist knowledge required in procurement and supply management.
CIPS has long been an advocate of the need for more skilled professionals in procurement. Taken together, skills and an effi cient procurement process with well-established standards are the bedrock of any successful procurement process. Nowhere has this been more apparent than in the UK and the success of the London 2012 Olympic and Paralympic Games,
where skilled professionals were
making procurement decisions, resulting in goods and services delivered to time and quality, and saving £114m in the process.
Another major step forward the Directives will estab- lish is the Innovation Partnership (IP) Pro- cedure.
The IP will be introduced to e ncou rag e creative solu- tions where a requirement for goods, services or
58 | public sector executive Sep/Oct 13
works cannot be met by the current market- place and at the same time encourage long term partnership between public bodies and suppli- ers. The EU has already created a series of IPs for water, raw materials, smart cities and com- munities.
In these instances, it has led to more open, inventive and less restrictive solutions which meet tight specifi cations. That it also ensures a long term relationship between contractors and suppliers is also welcome.
CIPS has always advocated closer relationships between the two. They are critical to successful procurement, particularly in risk mitigation and addressing issues where they do occur.
Good news for suppliers
The directives will also be a boost to suppliers. The process of bidding for public contracts will be quicker, less costly, and less bureaucratic, enabling suppliers to compete more effectively and with more freedom to negotiate the terms of the contract.
The directives will remove swathes of red tape by enabling suppliers to bid for contracts online. This is particularly important for SMEs, who are critical to the European economy and in most instances public bodies are obliged to contract a certain number.
The new measures will also require public bodies to consider awarding
contracts
in the form of separate lots for collective bidding which will increase access to public procurement and encourage smaller fi rms to bid. We think this is an excellent move and very attractive to small suppliers, who are too rarely involved in the public market.
Access to contracts will also be made easier through the Competitive Procedure, which sets out clear and transparent criteria to bid for a contract, thus ensuring equal treatment of all prospective suppliers.
This means that on the one hand, the public sector will be able to enjoy a wider pool of suppliers, where they have previously been unable; on the other hand, this will lead to increased competition on price, as new and innovative suppliers that can add real value.
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