Sub-dimensional Sub-dimensional PUBLIC PROCUREMENT: PUBLIC PROCUREMENT: between EU principles between EU principles and gold platingand gold plating

Dacian C. DragosDacian C. DragosCenter for Good Governance StudiesCenter for Good Governance Studies

Babes Bolyai University, Babes Bolyai University, Cluj Napoca, RomaniaCluj Napoca, Romania

Contracts outside the EU Contracts outside the EU directives: what relevance?directives: what relevance?

80% of the procurement market – contracts not covered by the directives

10% of procedures are covered by the EU Directives

90% of procedures recorded nationally – below the EU thresholds

Values: 20% of the public expenditures covered by the EU Directives

ThresholdsThresholds THE WTO Government Procurement THE WTO Government Procurement

Agreement (SDR)Agreement (SDR) 2014 Directives (EUR)2014 Directives (EUR)

(a) EUR 5 186 000 for public works contracts;(a) EUR 5 186 000 for public works contracts; (b) EUR 134 000 public supply and service, central (b) EUR 134 000 public supply and service, central

authoritiesauthorities (c) EUR 207 000 public supply and service contracts, (c) EUR 207 000 public supply and service contracts,

sub-central authoritiessub-central authorities (d) EUR 750 000 public service contracts Annex XIV (d) EUR 750 000 public service contracts Annex XIV

Up until 2004 – full application of the Directive Up until 2004 – full application of the Directive - lowering the thresholds- lowering the thresholds

2014 onward – increasing the thresholds2014 onward – increasing the thresholds

ReasoningReasoning

Sub-dimensional - not enough cross Sub-dimensional - not enough cross border interestborder interest

Contracts above thresholds – majority Contracts above thresholds – majority of PP in the MSof PP in the MS

GPAGPA

Critique:Critique: The size of PPThe size of PP MS become the main actors in the MS become the main actors in the

integration of public markets, not the EUintegration of public markets, not the EU

Case law of the CJUECase law of the CJUE

Unitron ScandinaviaUnitron Scandinavia TelaustriaTelaustria Commission v. FranceCommission v. France Germany v. CommissionGermany v. Commission Commission v. ItalyCommission v. Italy ConameConame Bent Mousten VestergaardBent Mousten Vestergaard Parking BrixenParking Brixen

Case law (cont)Case law (cont)

Succhi di fruttaSucchi di frutta Evropaïki DynamikiEvropaïki Dynamiki Strong SegurançaStrong Segurança Medipac-Kazantzidis Medipac-Kazantzidis SECAP SECAP Commission v. IrelandCommission v. Ireland BelgacomBelgacom Comune di AnconaComune di Ancona

Soft law: the 2006 Soft law: the 2006 CommunicationCommunication

Synthesis of the jurisprudenceSynthesis of the jurisprudence Cross border interest test:Cross border interest test:

subject matter of the contract, subject matter of the contract, its estimated value, its estimated value, the size and structure of the the size and structure of the

particular market, particular market, commercial practices commercial practices the geographic location of the the geographic location of the

place of performanceplace of performance

EU principlesEU principles

Recital 1:Recital 1: free movement of goods, free movement of goods, freedom of establishment freedom of establishment freedom to provide services freedom to provide services

equal treatment, equal treatment, non-discrimination, non-discrimination, mutual recognition, mutual recognition, proportionality proportionality transparencytransparency

Equal treatmentEqual treatment

the obligation of transparency the principle of freedom to provide

services the principle of free competition

No new obligations

(Germany v. Commission)

Non-discriminationNon-discrimination

Non-discriminatory description Non-discriminatory description of the subject-matter of the of the subject-matter of the contract (Bent Mousten contract (Bent Mousten Vestergaard)Vestergaard)

Mutual recognitionMutual recognition

Non discrimination = equal Non discrimination = equal treatment?treatment?

EU institutionsEU institutions National courtsNational courts

ProportionalityProportionality

2006 Communication2006 Communication Time limitsTime limits

TransparencyTransparency Rules known in advanceRules known in advance Applied equallyApplied equally Sufficient timeSufficient time

Individual quotations? NoIndividual quotations? No ConameConame: some degree of transparency, : some degree of transparency,

unless very modest economic interestunless very modest economic interest

Member States experiencesMember States experiences

National jurisdictions - playground for National jurisdictions - playground for the principles of EU law. the principles of EU law.

Options: Options: extension of the rules of the Directives to extension of the rules of the Directives to

sub-dimensional procurement (either fully sub-dimensional procurement (either fully or partially), or partially),

the application of general public or private the application of general public or private law ruleslaw rules

OECD 2010OECD 2010 Majority of MS – sub-dimensional Majority of MS – sub-dimensional

procurement in same legislative procurement in same legislative actact

Sub-dimensional PP – Sub-dimensional PP – transparency, competitive, fair transparency, competitive, fair proceduresprocedures

Selected MS data 2012Selected MS data 2012

Gold plating Gold plating new EU entrants (2004 and 2007) new EU entrants (2004 and 2007)

(fear of corruption)(fear of corruption) France, Italy and Spain France, Italy and Spain

Germany, Denmark, UK – Germany, Denmark, UK – separate regimesseparate regimes

National procedures for sub-National procedures for sub-dimensional procurement - dimensional procurement - simplified. simplified. shorter time limits for submission shorter time limits for submission

of applications or tenders (further of applications or tenders (further shortened in case of electronic shortened in case of electronic submissions) submissions)

less demanding rules for less demanding rules for publication and selection of publication and selection of tenderers. tenderers.

Direct procurement Direct procurement

very modest economic interestvery modest economic interest national thresholds – between national thresholds – between

EUR 5000 and EUR 50 000 EUR 5000 and EUR 50 000 Spain - 50 000 works 18 000 services and Spain - 50 000 works 18 000 services and

supplies, France and Poland EUR 15 000, supplies, France and Poland EUR 15 000, Italy EUR 40 000, Romania EUR 100 000 Italy EUR 40 000, Romania EUR 100 000 works and EUR 30 000 services and works and EUR 30 000 services and supplies, Denmark EUR 67 000. supplies, Denmark EUR 67 000.

UK and Germany -no national threshold, UK and Germany -no national threshold, but devolved local authorities may but devolved local authorities may establish similar thresholdsestablish similar thresholds

RemediesRemedies

OECD study – majority - same OECD study – majority - same remediesremedies

Denmark, UK, Germany, Spain - Denmark, UK, Germany, Spain - different remedies regimesdifferent remedies regimes

Direct procurement - national Direct procurement - national rules of redressrules of redress

Final remarksFinal remarks

European Commission: direct European Commission: direct cross-border procurement has not cross-border procurement has not increased as much as was increased as much as was anticipatedanticipated

Even more true for sub-Even more true for sub-dimensional procurement dimensional procurement

2014 Directive: joint awarding of 2014 Directive: joint awarding of public contracts by contracting public contracts by contracting authorities from different Member authorities from different Member States (Recital 73)States (Recital 73)

Sub dimensional regimeSub dimensional regime

Case law CJUE Case law CJUE National practices – mainly gold National practices – mainly gold

plating. plating. Cross border interest test - rarely Cross border interest test - rarely

performed, performed, Remedies are either extended as a Remedies are either extended as a

result of gold plating, or provided result of gold plating, or provided by national law. by national law.

The scope of sub-dimensional The scope of sub-dimensional procurement bound to widenprocurement bound to widen