The European Parliament last week approved new rules on public procurement which will make it easier for small and medium-sized firms to bid, and include tougher rules on subcontracting.
The rule put more emphasis on quality, environmental considerations, social aspects and innovation, using the principle of the “most economically advantageous tender”, rather than merely the cost.
For example, the award criteria will take into consideration the experience of the staff, offers of after-sales service and technical assistance.
The rules will also cut red tape for companies bidding and make it easier for small and medium-sized firms to participate.
Bidding will be simplified by the introduction of a standard European Single Procurement Document available in all EU languages. The system will be based on self-declarations, and only the winning bidder will have to provide original documentation. This should reduce the administrative burden on companies by over 80 per cent, according to the European Commission.
The new rules will also encourage the division of contracts into lots, to give small and medium-sized enterprises a better chance to cope.
This should reduce the administrative burden on companies by over 80%
Annual turnover requirements may also not exceed two times the estimated contract value to avoid public contractors imposing exaggerated turnover requirements on small firms.
The new rules also clearly define situations which should lead to the exclusion of operators, such as conflicts of interest or significant underperformance under a prior public contract. The possibility to modify contracts during their execution without new tender procedures will be limited.
Abnormally low tenders will be investigated and violations of social and labour law or environmental law could lead to the exclusion of the bidder. The new directives will also introduce tougher rules on subcontracting.
Member states have two years in which to introduce the tendering procedures, so as to ensure a level playing field across the EU.
Public authorities spend around 18 per cent of GDP on works, goods and services. In 2009, contracts governed by EU public procurement rules accounted for 3.6 per cent of EU GDP, amounting to €420 billion.
Malta recently did away with the need for prior experience – usually of five years – as a selection criteria in public procurement, to ensure that SMEs and start-ups could at least submit bids for government contracts. The change applies to contracts below the €500,000 threshold.