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PUBLIC PROCUREMENT: COUNCIL AND PARLIAMENT AGREE DIRECTIVES IN CONCILIATION TALKS.

The Council and Parliament agreed that award criteria must be "linked to" the subject matter of the contract. Some social-orientated amendments passed, including allowing the Member States to reserve certain contracts for "sheltered workshops" (firms that only employ handicapped people). However, in recognition of Council fears about contracts being awarded arbitrarily, these provisions have been put into the recitals rather than the main body of the text. Where possible, the contracting authority should specify whether provisions need to be made for access for the disabled, such is in the design of buildings, so that bidders can factor this into their tender.

On the environmental front, the Council moved a bit too, agreeing that contracting authorities can take into account the "production methods" of the bidder e.g. whether the electricity the supply comes from renewable sources. The role of the European Court of Justice in clarifying to what extent social and environmental factors can be used is explicitly recognised. The ECJ notably ruled recently (Case C -513/99) that the Helsinki local authorities were entitled to insist on buying buses that had low gas emission levels.

The Parliament gave way on the book-price-fixing issue, agreeing that schoolbook contracts should be covered by the Supplies, Services and Works Directive. Where national authorities fix the prices of the books, tenders should be assessed on the basis of criteria other than the price. The MEPs also dropped their demand to allow contracting authorities set up their own rules for deciding who can apply for a contract ("qualifications system").

One of the main innovations of these Directives is their encouragement of e-procurement but under the compromise deal, Member States may ban the use of electronic auctions for works and services contracts that are intellectual-related e.g. engineering designs. And while the use of electronic signatures is promoted, it is not deemed essential for assuring the confidentiality of tenders. As for monitoring how the Directives are working, the Member States will be allowed set up an independent body to oversee their implementation. In addition, the Commission will present a proposal in 2004 on surveillance authorities.

The Parliament's delegation on the Conciliation Committee voted 12-2 in favour of the deal so it should have a smooth passage through plenary, most likely at the end of January 2004. EU Internal Market Commissioner Frits Bolkestein has welcomed the deal in which he personally played the role of mediator. In a statement issued on December 3 he said "the compromise reached over award criteria is an acceptable one" which does not create "scope for arbitrary and unfair contract awards". The other key players in the talks were head of the Parliament delegation Charlotte Cederschiold (EPP-ED, Sweden), rapporteur Stefano Zappala (EPP-ED, Italy) and Italian EU Affairs Minister Rocco Buttiglione for the Council Presidency.

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Public procurement contracts account for an estimated 14% of the EU's Gross Domestic Product, or Euro 900 billion. The existing public procurement Directives cover services (92/50/EEC), supplies (93/36/EEC), works (93/37/EEC) and utilities (93/38/EC). On May 10, 2000, the European Commission proposed two Directives, which simplify and modernise the old ones, notably providing for more electronic purchasing. In its first reading adopted on January 17, 2002, the Parliament voted to significantly reduce the scope of the supplies, services and works draft Directive (the "Classic" Directive). The Council formally adopted its common position on the Classic Directive and the Utilities Directive (transport, energy, water and postal sectors) on March 20, 2003. The Parliament adopted its second-reading Recommendation on July 2, moving closer to the common position, notably on the scope of the Directives.

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Publication:European Report
Geographic Code:4E
Date:Dec 6, 2003
Words:602
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