EU procurement reforms are major boost for taxpayers, small businesses and the European economy

15-Jan-2014 @ 15:0

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Anthea McIntyre Anthea McIntyre

Anthea McIntyre Anthea McIntyre

The enormous spending power of public authorities will be deployed to support innovation, small businesses, economic growth and taxpayer value, thanks to reforms voted through the European Parliament today.

“Public procurement will no longer be a question of simply accepting the lowest price” said Malcolm Harbour, ECR Member and Chairman of the Internal Market and Consumer Protection Committee, who led the Parliament’s agreement on the proposal. “Smart customers will work with smart suppliers to provide better solutions, better tailored to meeting customer needs in more innovative ways.”

Three directives reforming the public procurement system have been championed by the European Conservatives and Reformists (ECR) Group in the parliament, as key measures to open up public tenders to smaller businesses and to encourage public authorities to think about how they can better provide their services to taxpayers. The new measures will cut red tape and promote value for money, they will reform, transparency and accountability in how public authorities provide goods and services.

Among the measures voted through by a substantial majority today, include:

- Contracts must be awarded on the basis of value, rather than simply the lowest tender;

- Life-cycle costs can be taken into account, enabling public authorities to think longer-term;

- Simpler bidding processes;

- Electronic procurement to bring practices into the 21st century;

- Innovation partnerships, where the supplier enters into a technology development partnership with authorities to provide innovative solutions;

- Encouraging the breaking down of large contracts into lots so that smaller businesses can bid for them;

- Smaller companies have more flexibility to bid for large contracts;

- Businesses will be able to access a central online point of information about the documents needed to bid in all EU countries;

- The ability to reserve contracts to employee-led mutuals to encourage public sector reform and improved provision of services.

The proposals will also encourage so-called ‘Business Information Electronic Modelling’ (BIM) for the design of public buildings. Such an electronic three dimensional modelling process for public buildings should enable all contractors to stay up to date with the latest building designs, thus cutting down notorious delays, and cost overruns.

ECR Chairman of the European Parliament's internal market committee, Malcolm Harbour, and ECR MEP Edvard Kozusnik, have led the campaign for reformed public procurement rules as a key element of completing the single market, under the so-called Single Market Act.

Mr Harbour said:

“Public procurement represents a significant proportion of spending across Europe. It has the ability to both boost the wider economy, and to encourage not just the day-to-day delivery of services, but a better and more efficient delivery of services to taxpayers.

“Small businesses will now find it much easier to bid for public contracts across the EU. Previously they have been shut out of the process by red tape, turnover requirements and contracts too large to manage. Now, contracts can be broken down to make them more accessible to smaller businesses, and the processes will make it much easier.

“Small businesses have found accessing finance a major problem in recent years. For an innovative business being able to approach a bank manager with a development contract from a public authority is an effective way to leverage more private funding to grow businesses. In the long run, these reforms will bring a substantial boost to small businesses.

“Public authorities too often stick with the same major suppliers who provide the same services day-in, day-out. These reforms give them the tools and incentive to challenge the status quo and ask businesses of all sizes to bid for providing services that will offer better value to the taxpayer.”

Edvard Kozusnik, ECR shadow rapporteur on the proposals, said:

“These reforms are a major achievement of the ECR in ensuring that taxpayer spending adds value to the European economy. Public authorities are often very limited in the companies they can approach to provide services for them. These reforms aim to break down the barriers that smaller companies face in bidding for public contracts by cutting red tape, and repackaging major contracts into smaller lots.

“More choice for public authorities means better value for taxpayers. We want authorities to consider not just providing a service to the public, but how the procurement process can be used to innovate and provide a better service to the public. The reforms we have agreed introduce the entrepreneur into the public sector where they have previously been closed out. It means that the billions of euros being spent on providing public services should provide much more bang for taxpayers’ bucks.”

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