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Appendix 7

Public Procurement Stakeholder Conference

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SRC - Introduction - 20 October 2009

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SRC - Session 1 - 20 October 2009

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SRC - Session 2 - 20 October 2009

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SRC - Session 3 - 20 October 2009

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SRC - Session 4 - 20 October 2009

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Professor Christopher McCrudden
Comment on Stakeholder Conference Report

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Buying Social Justice

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Dr Aris Georgopoulos -
Comment on Stakeholder Conference Report

Maximising Economic and Social Benefits from
Public Procurement
Conference for Northern Ireland Small Medium Enterprises (SME) and Social Economy Enterprises (SEE)

Contribution by Dr Aris GEORGOPOULOS
Lecturer in European and Public Law
University of Nottingham
School of Law
Public Procurement Research Group (PPRG)
aris.georgopoulos@nottingham.ac.uk

The present contribution deals with those points that emerged at the stakeholders’ conference and according to the author are of legal significance. The contribution follows the structure of the conference’s “summary report".

Comments on Points Raised:

A. Stream 1: Framework Agreements and Contracts

a. the value of each of the (exempted) works contract is less than €1,000,000 (£810,580), or for supplies or services €80 0000 (£64,846),

b. the exempted contract (or contracts) worth up to 20% of the lots’ total value.

Here it is important to note that the EU procurement rules state clearly that the subdivision of contracts to lots should not be done with the intention of avoiding the application of the public procurement rules (See Article 9 (3) of Directive 2004/18/EC and Reg. 8 (19) Public Contracts Regulations 2006). This should be stated clearly in the final report because otherwise unwanted messages may be sent both to contracting authorities and the European Commission.[1]

a) a proposal for the competent departments of the Northern Ireland Executive to conduct an ex post examination (by a means of a study perhaps) in order to ascertain the general level of involvement of SMEs and SEEs as subcontractors in public procurement carried out by contracting authorities in Northern Ireland; or

b) a suggestion for including in the screening/evaluation process of specific procurement contracts (for instance as award sub-criterion or a condition of performance of the contract) the involvement of SMEs and/or SEEs as subcontractors.

It can be said that there is nothing in the procurement rules to prevent (a). In fact this seems an excellent idea. With regard to (b) however it is important remember the following:

First of all contract award sub-criteria have to be linked with the subject matter of the contract and they should observe the principle of equal treatment. Thus if such an award criterion of contract condition is imposed it should take into account the involvement of all SMEs and/or SEEs irrespective of their nationality.

B. Stream 2: Opportunities to Bid

C. Stream 3: Tendering and Delivering

[1] The bullet points in the section “key suggestions made" that stipulate: a)“Breaking into lots should be seen as the first recourse of any procurement tender" and b)“Break up large contracts into smaller contracts which would be more appropriate for local SMEs" may be misread by contracting authorities as an invitation to devise ways to evade the application of public procurement rules. A reminder or a clarification of the limits of this option (for example with the inclusion of the phrase “as far as permitted under the public procurement legislation") would be helpful.

[2] “European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts", Commission Staff Working Document, SEC (2008) 2193 available online at: http://ec.europa.eu/internal_market/publicprocurement/docs/sme_code_of_best_practices_en.pdf

[3] Case C-324/98, Telaustria Verlags GmbH and Telefonadress GmbH v Telekom Austria and Herold Business Data AG, [2000] ECR I-10745. However see also Case C-231/03 Coname [2005] ECR I-7287, where the ECJ stated as obiter dictum that an obligation to advertise may not apply to a contract of modest economic value that would not give rise to cross-border interest; see also the Opinion of Advocate General Sharpston of 18 January 2007, in Case C-195/04, Commission v Finland [2007] ECR I-3351 where the Advocate General argued that in the case of “below-threshold" contracts Member States have discretion to determine what the sufficient degree of transparency should be.

[4] See for example Case 31/87, Gebroeders Beentjes v Netherlands [1988] ECR 4635 and Case
C-225/98, Commission v French Republic, [2000] ECR I-7445.

[5] See in this regard Case C–360/89, Commission v Italy [1992] ECR I-3401 and C-21/88, Du Pont de Nemours Italiana SpA v Unita Sanitaria Locale No.2 Di Carrara [1990] ECR I-889

[6] S. Arrowsmith, “Application of the EC Treaty and Directives to Horizontal Policies: a Critical Review", chapter 4 (pp.147-248) in Arrowsmith and Kunzlik (eds), Social and Environmental Policies in EC Procurement Law: New Directives and New Directions (2009; CUP)