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New public procurement rules published in the OJEU

02 April 2014

On 28 March 2014, three new EU public procurement Directives were published in the Official Journal of the European Union (the New Public Procurement Directives).

·         Member States must implement the New Public Procurement Directives by 18 April 2016.
·         The New Public Procurement Directives codify existing case-law of the European Court of Justice in the field of public procurement, and include new provisions aimed at making public procurement more efficient and strategically orientated to the needs of contracting authorities.
   
1. Introduction
On 28 March 2014, three new EU public procurement Directives were published in the Official Journal of the European Union:
 
·         Directive 2014/23/EU of 26 February 2014 on the award of concession contracts;
 
·         Directive 2014/24/EU of 26 February 2014 on public procurement and repeating Directive 2004/18/EC; and
 
·         Directive 2014/25/EU of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC
 
The New Public Procurement Directives will enter into force on 17 April 2014.  Member States have until 18 April 2016 to implement these Directives into their national laws.  For the provisions on e-procurement, the deadline is 18 October 2018.
 

The publication of the New Public Procurement Directives in the Official Journal marks the end of a comprehensive reform of the current European public procurement law, which was initiated by the European Commission’s proposals back in December 2011.

The stated objectives of the comprehensive reform are simplification, flexibility and legal certainty.  Drawing on the lessons learned from the application of the current public procurement rules, the new framework is intended to make public procurement more efficient and strategically aligned with the needs of contracting entities, thus benefitting both contracting entities and economic operators.

 
2. Some of the notable new features of the directives

New rules on the award of concession contracts are now set out in a separate Directive.  The new Directive on the award of concession contracts now covers both services concessions and works concessions with an estimated contract value equal to or exceeding EUR 5,186,000, and applies to all contracting entities, regardless of whether they are contracting authorities or (private) entities operating in the utilities sectors.

The general procedural structure of the existing public procurement rules is unchanged under the New Public Procurement Directives. 

However, there are some new distinguishing procedural features:
 
·         the new Directive on public procurement in the public sector increases the number of circumstances in which contracting authorities can use the negotiated procedure with prior publication (renamed the "competitive procedure with negotiation");
 
·         the new "Innovation Partnership" procedure facilitates the development of products that are not yet available on the market;
 
·         there is a general shortening of timetables and a new accelerated open procedure in the case of urgency (15-day response time from the date of despatch of the contract notice); and
 
·         the competitive dialogue is available in the utilities sectors, and contracting entities have the option to negotiate when using the competitive dialogue procedure.
 

The New Public Procurement Directives abandon the concept of "A" and "B services" in favour of a new distinction between "services in general" and "social and other specific services".  The threshold for social and other specific services is increased to EUR 750.000.  Tenders for social and other specific services exceeding this threshold must be published either by means of a contract notice or by means of a prior information notice/periodic indicative notice.  It is left to the Member States to establish further rules for the award of contracts involving these services.

Whereas under the current public procurement rules the contracting entity has the choice of awarding the contract on the basis of either the lowest price or the most economically advantageous tender (the so-called "MEAT" criterion), the New Public Procurement Directives formally abandon the price only criterion in favour of the MEAT criterion.

The New Public Procurement Directives make it clear that qualitative and strategic procurement is encouraged, by expressly allowing for the possibility to include life-cycle costing and environmental and/or social aspects in the award criteria.  

New provisions on selection criteria limit the ability of contracting entities to impose turnover requirements in relation to the economic and financial selection criteria.  Economic operators may now also rely on self-declarations instead of certificates issued by public authorities or third parties.  A so-called “European Single Procurement Document” will be created by the Commission for these purposes.

The specific exclusions for service contracts are broadened to include, for instance, certain legal services and public transport services by rail or metro.  The ambiguous exclusion for certain financial services has been clarified and broadened. For instance, loans are now clearly excluded.

 
3. Will the new rules reshape public procurement practices

Those amendments that simplify and clarify the scope of the rules and process requirements are most welcome. The codification of existing case-law of the European Court of Justice, removing the considerable legal uncertainty surrounding current public procurement practices, is also good news for practitioners.

It remains to be seen to what extent new and enhanced procedures such as the innovation partnership and the enhanced competitive dialogue procedure will reduce reliance on the negotiation procedure for tendering contracts.

It remains to be seen if Member States will implement the New Public Procurement Directives in a timely manner to avoid any confusion arising from deviation from and contradiction with the current public procurement Directives.

Our public procurement team covers all relevant jurisdictions. In addition to the people mentioned on the righthand side of this page, please contact our local procurement specialists or Helga Van Peer for any queries in relation to other jurisdictions.