On 15 January, the European Parliament voted in plenary to endorse the new EU rules on public procurement. The awarding of public contracts may from now on take into account social and environmental considerations, as well as innovation criteria, but does this really mean that Europeans will benefit from quality services that meet their needs?

European Parliament MEPs voted in favour of the public procurement and awarding of concessions directives, as agreed in June 2013 at the Council of Ministers. The new rules are designed to allow public authorities to take into account criteria related to quality, sustainability, and innovation - rather than having to accept the lowest bid, which may generate short-term savings but may not be the best in terms of long-term objectives such as social and health concerns or cost efficiency. Hence authorities will have more scope to decide how best to spend taxpayers’ money on public works, goods or services. This should also enable SMEs to play a more prominent role in tender processes as they are often better placed to tailor their services to specific population groups.

The new measures are also meant to reduce administrative burden and promote transparency and accountability in procurement practices by public authorities which spend around 18% of GDP on works, goods and services.

The new legislation sets common EU standards on concession contracts to boost fair competition through new award criteria such as the ’Most Economically Advantageous Tender (MEAT)’. MEAT now becomes the main criterion to award contracts for the purchase of every kind of works, services and goods, and crucially, this may encompass qualitative, environmental and / or social considerations. Member States translating the directive into national law may also decide that MEAT is the only criterion to be used to evaluate bids for social and health services. However, it remains to be seen whether this will be widely practised.

Moreover, by introducing the so-called Innovation Partnership, public authorities will be able to launch a call for tender without pre-empting the solution, leaving room to the tenderer to come up with innovative solutions together with the authority.

’Abnormally low bids’ will be closely monitored in order to avoid social dumping and make sure that workers’ rights are respected.

MEPs stressed that revised texts do not represent a push to privatise public service. Water services have been specifically excluded from the text given its special status as a public good.

Social platform / EPHA position

Social Platform, the platform of European Social NGOs, with which EPHA has collaborated on public procurement policy over the last years, (see EPHA Position on Public Procurement) welcomed the vote in a Press Release calling it a ’positive new direction’. The Social Platform cautions, however, that public authorities will still be able to use the criterion of lowest price or cost - which is the main factor in the definition of MEAT - meaning that overall, it is not at all certain that people living and working in Europe will really benefit from better quality health and social services.

EPHA fully agrees with this ’positive yet sober’ assessment, which is hampered by the possibility of reserving contracts for non-profit service providers to only three years, which might put an end to truly innovative health and social services and also threatens continuity of service provision. In 2014, EPHA will continue to work with the Social Platform and other partners to ensure the best possible implementation of the Directive, in addition to working on the links between the new public procurement directives and the conditions imposed by international trade agreement rules such as the Transatlantic Trade and Investment Partnership (TTIP).

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Last modified on January 24 2014.