The
Procurement Directives <Top>
Before
the EU procurement legislation was put in place, procurement
within Europe tended to be focused on national practices,
which reflected a high degree of protectionism, both
internally and externally, contracts usually being awarded
on the basis of preferred local suppliers, with little
regard to the achievement of Value for Money.
The taxpayer was left to bear the consequences of this
policy. The EU's procurement legislative framework,
based on four Directives (Supplies, Works, Services
and Utilities), is intended to arrest this policy and
achieve the award of public sector and utilities contracts
without discrimination.
Public
authorities and utilities in the EU spend some £550
billion per annum on goods and services, which is something
in the order of 11% of the EU Gross National Product
(GNP). This means that an effective competitive public
sector procurement process should make significant savings
for governments and their people. The Cecchini report
estimated approximately £17 billion could be saved
through greater transparency and an increase in openness
of public contract practices.
Overview <Top>
Public
contracts are defined as contracts for pecuniary interest
concluded in writing between a supplier, contractor
or service provider and a public purchaser, termed a
"contracting authority" in the Directives.
Public
supply contracts relate to the delivery of products.
They include purchase, lease, rental or hire purchase,
with or without option to buy.
Public
works contracts cover: <Top>
- the
execution of works;
- the
execution and design of works; and
- the
execution by whatever means of a work corresponding
to the requirements
specified by the contracting authority.
Works
must relate to one of the activities covered by Class
50 of the General Industrial Classification of Economic
Activities within the European Communities (NACE). These
are listed in Annex II to the Directive.
A
work is defined by the Directive as the outcome of building
or civil engineering works taken as a whole that is
sufficient of itself to fulfil an economic and technical
function. Contracting authorities frequently choose
to rely on a general contractor who designs the works
according to their requirements and coordinates execution
of the entire project, or else prefer to conclude a
project development or management contract whereby the
work is financed and executed entirely by the contractor,
whom they then of course reimburse.
Public
service contracts are defined very broadly by Directive
92/50/EEC.
The
definition covers all contracts for pecuniary interest
concluded in writing between a service.
