Public procurement: rules for a better price-quality balance

railway-curveA new legislative package governing the public procurement in the EU was adopted at the beginning of the year by the European Parliament. Thus, the sixth legislative process over the last 45 years ended, a very hard and difficult process that lasted more than 4 years (consultations started in 2010). The three directives were published in the Official Journal of the European Union in February. Subsequently, the European Union Member States will be obliged to transpose into the national legislation most of the new provisions within maximum two years.

Among the three approved legislative packages, Directive 24/2014 on public procurement is most likely the one with relevant impact on the European railway sector as regards the regulation of procedures for the award of public procurement contracts. However, taking into account the diversity of public procurement contracts, the contracting authorities need to be able to provide both separate  and joint attribution of design and execution work contracts.
The new EU rules on public procurement and concession contracts will ensure a higher quality and better price ratio when the public authorities will buy or rent activities, goods or services. These rules will facilitate access of small and medium-sized companies and will include more strict provisions on subcontracting.
European deputies have successfully supported the introduction of a completely new procedure to strengthen innovative solutions in public tenders. The new “Partnership for Innovation” will allow public authorities to organize tenders to solve a specific problem without anticipating the solution, thus leaving the constructor and the contracting authority to find innovative solutions together.
Bidders can prove their financial situation, skills and the fact that they meet the necessary criteria by statutory declarations. These replace the set of supporting documents which were required so far. The single European acquisition document, a standard statutory declaration will facilitate this.
Complete supporting documents will be provided only by the winner, either directly or by reference in the single European acquisition document to the national databases from which the contracting authority can obtain them.
According to the new legislative packages approved by the European Parliament, the contracting authorities must accept the offers of all bidders whose financial situation meets the contract execution criteria. In the past, small bidders were often excluded because the contracting authorities imposed high annual turnovers, even for small value contracts. Normally, in the future, the requested annual turnover should be maximum two times the contract value.
Also, large contracts can often be divided into lots that allow small companies to participate. Therefore, the contracting authorities are encouraged to divide larger contracts into lots. They will not be forced to divide the contracts, but if they don’t do it, they will have to explain why.
“The reform of public markets adapts to a new context where we must think to a sustainable growth model. Therefore, in awarding contracts, the quality-based criteria are important and not on the best price criteria. From now on, the authorities will be encouraged to opt for quality and sustainability of goods and public investments (social criteria and focused on the environment)”, states Marc Tarabella, rapporteur on procurement by entities operating in the energy and transport sectors.
Due to the new “most economically advantageous tender” (MEAT) criterion in the procedure for awarding the contract, public authorities will be able to enhance quality, environmental considerations, social issues or innovation, further taking into account the price and the costs for implementing the procurement. “The new criterion will bring the end of the dictatorship of the lowest price, bringing to the fore the quality”, explained Tarabella.

You can read more about the Legislative Package on public procurement in the June issue of Railway Pro.

[ by Elena Ilie ]
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