Evaluation of public procurement Directives High Level Group of Independent Stakeholders on Administrative Burdens Thursday 14 July 2011.

Evaluation of public procurement Directives

High Level Group of Independent Stakeholders on Administrative Burdens

Thursday 14 July 2011

Total public expenditure

Eurostat and Commission estimates As % EU GDP (2008)

Published in OJEU 3,14

Below threshold 2,10

Health 4,12Social

Protection 1,18

Education 0,81

Fuel for energy 2,46

Defence 0,59

Other 2,30

VAT on OJEU published

0,61

Use of procedures

Pwc, London Economics, Ecorys from OJEU data 2006-2010

73%

9%

8%

7%0%

52%

23%

14%

5%4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Number Value

Competitive dialogue

Accelerated procedures

Negotiated withoutpublication

Negotiated

Restricted

Open

SME access and success

By Number of contracts

18

18

18

18

22

21

24

20

19

39

42

39

4022 20

20

2006

2007

2008

Total

Micro Small Medium Large

By value of contracts

6

5

6

6

9

11

13

16

15

69

69

62

6611 17

19

2006

2007

2008

Total

Micro Small Medium Large

GHK

Cross border procurement

Ramboll as % of total (above threshold) procurement

13,9

11,4

3,6

1,4

13,712,4

11,211,7

3,23,7

1,81,60

2

4

6

8

10

12

14

16

2007 2008 2009

% total indirect cross-borderthrough affiliates(value)

indirect cross-borderthrough affiliates(number ofcontracts)

direct cross-border(value)

direct cross-border(number ofcontracts)

Cross border participation

Ramboll

How often did your company participate in public procurement tenders (domestically and abroad) in the last three years?

76,1

10,9

6

7

0

6,4

5,3

4,9

11,1

72,3

0 10 20 30 40 50 60 70 80 90 100

more than 20 times

10 to 20

5 to 10

1 to 5

Never

% of respondents

Participation abroad N=1011

Participation overall (domestically and abroad) N=1026

Reasons for not bidding cross border

Reasons for not bidding cross-border

32,5

34,2

34,6

36,6

47,6

48,6

50,3

61,3

0 10 20 30 40 50 60 70

Exchange rate risk

Administrative requirements

More resources to tender

Higher costs

Legal barriers

Too much local competition

Language barriers

No experience doing business abroad

Ramboll

Total cost of procedures

Average cost per procedure €28 000

€22 500 - cost of average 5 – 6 bids € 5 500 contracting authority costs

Total Costs €5.3 billion Less than 1.3% of total contract value

Average person days for procedure

Pwc, London Economics, Ecorys from OJEU data 2006-2010

0

10

20

30

40

50

60

70

80

Luxe

mbo

urg

Malt

a

Czech

Rep

.

Belgium

Franc

e

Icela

nd

Irelan

d

Finlan

d

Germ

any

Poland

Austri

a

Estonia

Norway

Slovenia

Nether

lands

Sweden

EEA-30

Hungar

y

Spain

Denmar

kUK

Latvi

a

Lithu

ania

Romania

Portu

gal

Slovak R

ep.

Greec

eIta

ly

Cypru

s

Bulgar

ia

Authorities Firms

Person-days required

Best performer

Worst performer

Difference

Authorities 11 68 57

Firm 10 43 33

Authorities and winning firm combined

22 93 71

PwC, London Economics, Ecorys

Savings

Econometric model Save 1% on the final contract value if contract

notice advertised further 3 % if open procedure

or 1.1 % if restricted procedure Total 2.1 - 4 per cent compared with the initial

estimate.

PwC, London Economics, Ecorys

N Cumulative

€Cumulative

80%

50%

20%

0

400

800

0 500 1000 1500 2000 2500 3000Value of purchase ('000)

Frequency of contract values

PwC, London Economics, Ecorys

Evaluation: main findings

Effectiveness Relevance Efficiency Consistency with other policies EU added value

Effectiveness

Transparency Competition Savings Cross border Differences in implementation

Relevance

Value for money CPB’s and Frameworks Equal treatment Non discrimination

Efficiency

Positive cost benefit analysis Compliance costs Difference across MS Unintended consequences

Consistency with other Policies

Green public procurement Socially responsible Innovation Lack of monitoring Different requirements, standards, labels…

EU Added Value

Single Market Coordination Still large differences in implementation

Evaluation: overall conclusion

Savings outweigh costs Scope for improving balance of costs and

benefits particularly for small contracts Potential for more cross border procurement