Procurement Pulse - July 2016

Procurement Pulse Series

Procurement Update

By:

At a time when uncertainty prevails as a result of the BREXIT vote, we thought it would be useful to provide clarity on the status of procurement law, not only in the UK, but across the European Union. It is important to note that at this point in time, nothing has changed in terms of the UK's EU membership. It is "business as usual" in terms of structuring and managing procurement procedures; the Public Contracts Regulations, 2015, the Utilities Contracts Regulations, 2016 and the Concessions Contracts Regulations, 2016 will all remain in place until the UK Government has concluded any new relationship with the EU.  Working with DLA Piper colleagues in our offices across the EU, we have put together an implementation tracker table which we will include in all future editions of Procurement Pulse - until such time as the 2014 procurement directives have been implemented in all EU member states.

The last date for each EU Member State to implement the public sector directive (2014/24/EU), the utilities directive (2014/25/EU) and the concessions directive (2014/23/EU) was 18 April 2016.

The Treaty on the Functioning of the European Union gives the European Commission the power to take legal action against a Member State that fails to respect its obligations under EU law.  In the specific case of Member States that have failed to implement directives within the prescribed deadline, the Commission may request  the Court to impose a financial penalty on the Member State concerned. The infringement procedure begins with a request for information (a Letter of Formal Notice) to the Member State concerned, which must be answered within a specified period, usually two months.

On 26 May 2016 (for failing to notify transposition of the 2014 EU Procurement Directives fully into national law by 18 April 2016) the European Commission issued formal notices to:

Austria; Luxembourg
Belgium Malta
Bulgaria the Netherlands
Croatia Poland
the Czech Republic Portugal
Cyprus Romania
Estonia Slovenia
Ireland Finland
Greece Spain
Latvia Sweden
Lithuania  

Some of the formal notices will go no further.  We know for example that Ireland implemented all three of the new directives on 1 May 2016, but this has yet to be reflected in the Commission's statistics. Equally implementing legislation was passed in the Netherlands on 21 June, and new laws covering all three directives came into force in Romania on 26 May 2016.

So where does that leave contracting authorities wishing to start new procurements (and indeed bidders who would like to participate), where implementing legislation is not in place post 18 April?

An EU Member State must not be able to take advantage of its own failure to comply with EU law. Therefore, certain provisions in directives may be relied on by private individuals (for example companies which submit tenders in a procurement procedure) against public authorities where the state has failed to implement the directive into domestic law by the end of the prescribed period or where it has failed to implement the directive correctly. Only those provisions which have "direct effect" can be relied on in this way. A provision in a directive will have direct effect if it :

  • is clear and unconditional, and
  • does not give Member States substantial discretion as to how it should be implemented.

Ultimately, whether or not any provision of an unimplemented directive can be relied upon must be determined on a case-by-case basis , potentially by reference to the European Court of Justice, but in the interim, some Member States have issued guidance on which provisions they consider would be construed as having direct effect.

We are aware that for example the Spanish Government, knowing that it would not be in a position to implement the 2014 EU Procurement Directives until after government elections in June 2016, has issued a Recommendation to procuring authorities providing an indication of which provisions in directive 2014/24/EU and directive 2014/23/EU should be treated as having direct effect. The guidance considers that provisions such as those setting out - the new financial thresholds, the methods for calculating the estimated value of a procurement, the codification of Teckal and related case law excluding "in-house" contracts from the procurement rules, use of life cycle costing as an award criterion and the approach to using the new European Single Procurement Document (ESPD) - would all have direct effect.

Similar guidance has been issued by the Polish Government.

In short therefore, with effect from 18 April 2016, the old procurement directives (2004/17/EC (utilities) and  2004/18/EC (public sector)) were repealed, and any new procurement will be based on directives 2014/23/EU, 2014/24/EU, 2014/25/EU. To the extent that any of the 2014 directives remain unimplemented in a particular Member State, and a contracting authority does not comply with provisions which have "direct effect", a bidder who wishes to benefit from those provisions will have grounds to commence proceedings against the offending authority.  Contracting authorities should therefore ensure complete familiarity with the provisions of the 2014 directives, and the extent to which they differ from their existing local procurement law.  Contracting authorities should also be aware of procurement law which has effect in each Member State as a result of an EU regulation.  For example the de minimis financial thresholds are set by way of EU regulation, as are the formats for standard forms (contract notices, contract award notices, the new contract "modification" notice etc).   The standard form for the ESPD is also set out in an EU regulation.  EU regulations are immediately binding across all EU Member States, and do not require any further implementing measures.

The table below shows those Member States where the 2014 directives are not yet implemented, and those where as a result of implementing the 2014 directives, bidders and contracting authorities can be sure of their rights and obligations in any procurement process.


Member State

Public Contracts

Utilities Contracts

Concessions

Austria

Not implemented (as at 6 June 2016)

Not implemented (as at 6 June 2016)

Not implemented (as at 6 June 2016)

Belgium

Not implemented (as at 20 June 2016)

Not implemented (as at 20 June 2016)

Not implemented (as at 20 June 2016)

Bulgaria

Not implemented (as at 6 June 2016)

Croatia

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Cyprus

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Czech Republic

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Denmark

Implemented 1 January 2016

Implemented date unknown

Implemented date unknown

Estonia

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Finland

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

France

Germany

Greece

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Hungary

Ireland

Italy

Latvia

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Lithuania

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Luxembourg

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Malta

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Netherlands

Poland

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Portugal

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Romania

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Slovakia

Slovenia

Not implemented (as at 24 May 2016)

Spain

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Sweden

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

Not implemented (as at 24 May 2016)

United Kingdom

 

 

 


Code

 

Implemented by 18/04/16

 

Implemented after 18/04/16

Not yet implemented


DLA Piper will track developments in relation to implementing legislation and in the infringement proceedings referred to above.

If there are specific EU Member States in relation to which you would like more information as to the status of their implementing legislation, do not hesitate to contact us, and we will put you in touch with a local DLA Piper contact.