Looking into Antonio Costa legacy as PM from a procurement perspective
With today's announcement of his resignation on the back of a corruption probe, the time of Antonio Costa as Portuguese Prime-Minister reached its end. I think it is appropriate to look into his legacy of 8 years as PM in the field of public procurement.
The transposition of the 2014 Directives
His first government transposed the 2014 Directives fashionably late in August 2017. It should be said though that centre right government which preceded him did not do so before the general election of October 2015, barely six months before the end of the transposition deadline. But fashionably late it was nonetheless.
As for the 2017 transposition I do not have much to say, but I did say a lot about what was happening below-thresholds. In 2017 I voiced significant concerns about the creation of a new non-transparent procedure to partially replace direct awards. I think the bulk of my critique has stood the text of time: since direct awards had (rightly) a negative connotation in the country, the new procedure of preliminary consultations allowed for the obfuscation of illegal practices and the data associated with non-transparent procurement. Back then it was sold as part of a package of simplification, cutting red-tape and increasing flexibility. I shall come back to this mantra further down.
From then on, we've seen the government(s) adopting a progressive - or strategic - deviation from EU rules and particularly, transparency.
The paediatric ward for Sao Joao Hospital
The Budget Law for 2019 included a rule allowing for the direct award of the public works contract to build a new paediatric ward for the second largest hospital in the country. This is, obviously, illegal since the contract was valued at €26.7m and the only reason there was a pressing need for it was the behaviour of the Ministry of Health that allowed the situation to reach that state. However, the responsibility for this decision lies with all parties in Parliament who voted in favour of this amendment introduced during the discussions by the Socialist Party (which supported the government). This approach of using the yearly Budget Law for bending procurement rules is yet another point for me to return to.
I don't have specific recollections about procurement in Portugal in 2020, since the UK Covid contracts sucked enough of my energy and attention of their own. About 2021, however is a different story.
The reform of the Public Contracts Code
In 2021 we find probably the strongest criticism I have to present against Costa and where we can see his view of procurement more clearly. The scent of money from the Recovery and Resilience Facility showed Costa's hand. He pushed through Parliament a reform of the Public Contracts Code as to well 'enhance' the use of European funds that would become available at short notice and could not be hindered by those pesky, pesky procurement rules. Yes, those that were 'simplified' and about which 'red tape' had been cut just four years prior. Predictably, the rules were 'simplified' further particularly for below threshold contracts with compliance requirements, timescales and the rights associated to them slashed. The jurisdiction of the Audit Court for the contracts covered by this new legal regime was curtailed and replaced by an ad hoc independent commission. I have nothing against those serving in the commission, but the logic of the move is, well, obvious and even the Monitoring Commission for the RRF funds (another one) warned in 2023 it was unable to verify procurement rules were being followed. Again, pretty much predictable back in 2021 and like clockwork in 2023 we found out the EPPO is investigating fraud allegations involving the RRF funds in Portugal. Once more the blame with this legislative package does not belong solely to Costa and the Socialist Party but also the main opposition party, the Social Democrats who supported it. When you deactivate - or strategically deviate from - EU procurement rules, corruption follows.
Personal data on base.gov.pt
In 2021 a number of contracts had to suddenly be pulled out of the national contract transparency platform base.gov.pt managed by the government. Why? Turned out no one had noticed the GDPR had come into force even though its debatable if the obligation to purge personal data from a public facing database did not predate the GDPR itself. In short, contracts were being uploaded in full (as they should) but without personal data redacted (as definitely they shouldn't). It was a mess. Speaking of base.gov.pt, the Portuguese Audit Court in 2023 pointed out the unreliability of data uploaded to it makes it a useless repository of information and degrades the value of the transparency it is supposed to provide.
That train tender
2021 also brought us *that* train tender, for which, at the time of writing there is still no award. I wrote enough about it here, here and here. The bottom line is that the whole process shows the contempt politicians in Portugal have for EU procurement rules and how publicly vocal they can be about it. The Minister responsible for the tender is one of the likely successors of Costa as leader of the Socialist Party and his successor in the ministry one of the suspects under investigation today.
World Youth Day 2023
In June 2022, the current government passed in Parliament the Budget Law for 2022. In it - as with the 2023 law - a provision was included allowing for all contracts needed for the organisation of the World Youth Day to be awarded directly without competition as long as the value per contract did not reach the financial thresholds. Once more it is easy to imagine what happened, with the cake going to the altar stage. Furthermore, I posit that the provision breached EU law since it assumes that no contract below thresholds has certain cross-border interest and as such it does not benefit from the application of EU general principles.
Batteryless ferries
Earlier this year I wrote about the very weird case of a public owned company acquiring electric ferries sans batteries. Now, it is fair to say that it would be a stretch to pin this to the lapel of the Prime-Minister. However, once the direct award for the batteries was shot down by the Portuguese Audit Court, the Minister responsible for the brief lamented publicly the 'inconvenience' of the legal compliance required by the judgment. This Minister is also under investigation under the corruption probe announced today.
eForms
eForms are not exactly the sexiest of topics in procurement but they are a topic close to my heart. They were introduced by the European Commission in 2019 and came into force on October 25th, 2023. What did the government do on that date? Approve the statutory instrument regulating their use in Portugal…and stating it comes into force in 90 days. What do eForms do? Well, improve data collection for procurement and making their processing easier.
The mandatory green procurement requirements
To cap this write up we conclude with the recent introduction of mandatory green procurement requirements. The choice of legislative instrument is debatable at best and potentially illegal but I am not the right person to discuss that. However, I did discuss the draft proposal here, here, here and here. While some changes were introduced in the final version of the text a number of new problems were added with some illegalities remaining as well. I will be talking about some of them at the end of the month in Lisbon at a workshop that is going to be livestreamed as far as I know.
If there was a scorecard to be awarded at the end of the exercise, it would not merit a passing grade. That Costa is going as a result of a corruption probe - even though unconnected to procurement - is an irony not lost on me.