Procurement Directives Revision

EU consultation submission: choice of legislative instrument

Pedro Telles

— 2 min read

Having submitted my response to the Commission's EU public procurement consultation last week after revising the ideas I discussed previously in the blog and on Linkedin, I decided to upload it section by section here to the blog. Today's entry is on the choice of legislative instrument:

  1. The current Directives failed to achieve their primary objective of opening up the single market for public procurement. As multiple studies have shown over the last 20 years, direct cross-border procurement remains below 5% of contracts in comparison with 1-2% before liberalisation started in the 1960s. Import penetration in the public sector is also around only 7.4% compared to 19.6% in the private sector. This gap has remained stable since 2011.
  2. It is evident the current legislative approach has failed. Adopting a new Directive - as path-dependency would predict - will not change the state of affairs and virtually guarantee that in 10 years down we will be having the same discussion again: why has EU public procurement legislation not been effective on opening up the single market?
  3. There are inescapable realities that will always constrain the size of the single market in public procurement: the gravity model of trade, different currencies or different languages. But the time has come to view Directives as a limiting factor for harmonisation and due consideration for Regulation as the primary legislative instrument for regulating public procurement in the EU should be given. This change would:
  • Improve harmonisation of procurement rules across member States
  • Eliminate inconsistencies arising from national transpositions
  • Reduce compliance complexity for economic operators operating in multiple member States
  • Potentially improve enforcement effectiveness if connected with a wider remedies reform
  1. This approach has precedent in other areas of EU law in recent years, such as the transition from:
  • Data Protection Directive (Directive 95/46/EC) to the General Data Protection Regulation (Regulation EU 2016/679)
  • Medical Devices Directives (Council Directives 90/385/EEC and 93/42/EEC) to the Medical Devices Regulation (Regulation EU 2017/745)
  • Securities Prospectus Directive (Directive 2003/71/EC and Directive 2010/73/EU (amending)) to the Prospectus Regulation (Regulation EU 2017/1129)
  • Energy Labelling Directive (Directive 2010/30/EU) to Regulation EU 2017/1369
  1. All of these Regulations replacing Directives acknowledge that the change in legislative instrument was due to the failure of Directives to deliver sufficient harmonisation in the area. It is time that we recognised the failure of Directives as a legislative instrument for public procurement and moved on from them.
  2. In alternative, a recognition of failure could take us in the other direction altogether and lead to the conclusion that public procurement is not compatible with full integration in the internal market. If that is the case then we should move from Directives and leave public procurement as a process subject only to the Treaties and general principles as it is the case at the moment with contracts below-thresholds.

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