Procurement News – Europe

Report finds lack of of transparency and competition in Public Procurement

December 19 in Daily News by eisc No Comments

A report focusing specifically on the procurement of architectural services, Public Construction Procurement Trends 2009-14, has shown a lack of transparency and competition, and significant market skews. It reveals that a vast amount of architectural work is hidden because it is not declared within notices directed at architects, effectively laying open procurement to non professional routes. The pattern of notices clearly indicate that responsibility and the quality of the design of large sections of our built environment now falls to a small number of non professionals, contractors and those whose driving interests are other than design standards and quality. Around 12,000 OJEU have been captured and analysed for the reports publication which is available from 

Ian Ritchie CBE, Director Ian Ritchie Architects, commented: ’The original aim of the EU Directive was to create a larger and more open market with a reasonably level playing field in which small, medium and large practices could compete fairly. It is clear that there has been an increasing bias placed within the OJEU notices which has distorted equality of opportunity, which combined with an increasing lack of transparency is undermining confidence in them and making the procedure to participate ever more expensive. The result is unsustainable for the architectural profession. This report is most timely and welcome, and hopefully politicians and those who should be supporting the industry and the professionals working within it will take notice and act appropriately.’


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Audit criticises British train procurement

December 19 in Daily News by eisc No Comments

A report by Britain’s Public Accounts Committee (PAC) has criticised the Department for Transport’s (DfT) handling of two major rolling stock procurement projects, arguing that the government has taken on a disproportionate share of the risk because of the DfT’s failure to fully investigate other methods of financing new trains.

A total of 866 long-distance vehicles are being supplied by the Agility Trains consortium under the DfT’s Intercity Express Porgramme (IEP), while Cross London Trains is supplying 1140 suburban EMUs for the Thameslink Programme. The combined value of these two contracts is around £10.5bn.

Under both contracts, the winning bidder is responsible for financing, supplying and maintaining the rolling stock for 20 years in the case of Thameslink and 27.5 years for IEP.

Both contracts were awarded more than two-and-a-half years later than scheduled due to pauses in procurement and the difficulty in securing finance in the wake of the global economic crisis.

The report argues that the DfT’s failure to articulate its role in the rail industry has led to widespread confusion, and that its role in the procurement “appears to be at odds with its previous policy of transferring responsibility for procuring trains to the industry.”

The PAC says that the DfT does not appear to have considered alternative ways of achieving its objectives, such as providing train operators with appropriate incentives to finance new rolling stock.

The procurement of IEP is criticised as “poorly managed from the outset” and the PAC says the DfT started out with no clear idea of how many trains it would need, where they would operate, or what traction would be required. The decision to electrify the Great Western Main Line in 2009 led to the requirement for diesel trains being dropped.

The report highlights Agility’s decision to submit a revised bid with a 38% reduction in price following a value-for-money review of IEP in 2010, and argues that this demonstrates that the DfT’s oversight of the likely programme costs was weak. “The department would not have needed to cancel and rerun the procurement if Agility had not reduced its bid,” the report states.

Delays in the Thameslink procurement led to the acquisition of further new trains from Bombardier as a stopgap to ensure new services could be introduced on time. It has also had a knock-on effect on the planned redeployment of older trains from the London area to newly-electrified lines in northwest England.

“The DfT’s decision to buy the new trains for Intercity Express and Thameslink itself has left the taxpayer bearing all the risk,” says PAC chair Mrs Margaret Hodge. “The department has no previous experience of running a procurement of this kind, let alone two with a combined value of £10.5 billion. Yet it has chosen to break with its previous approach of leaving it to rolling stock companies and train operators to buy trains, transferring risk away from the rail industry back to government. This means that if passenger forecasts are wrong and fewer new trains are needed in future taxpayers will have to pick up the bill. The only way the DfT can limit this risk is by requiring train operating companies to use these new trains to run their services regardless of whether they best fit the services they would like to offer.

The PAC warns that the DfT still lacks the skills to manage complex procurements, with frequent changes in senior management and a reliance on consultants to manage these programmes. It notes that there have been seven changes of management on the DfT’s IEP team since November 2007, although proposals are “in-hand” to recruit more staff and develop commercial skills in graduate recruits.

The report recommends that the DfT should:

work with the industry through the Rail Delivery Group to clarify the respective roles and responsibilities of the government and the industry
put in place plans to mitigate the impact on operators if ridership falls below forecast, making it uneconomic for them to use the new trains as expected
develop a rolling stock strategy, setting out what will be replaced, when, and by whom to provide certainty in the industry
work more closely with Network Rail, operators and manufacturers to develop a long-term integrated strategy covering infrastructure, rolling stock and franchising, so that major decisions can be taken in a logical order, and
develop its knowledge of the supply market and underlying costs before launching any procurement to determine whether bidders’ prices are reasonable.
The report can be downloaded in full from the PAC website (PDF).


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New EU procurement rules to come into force by early 2015 | Supply Management

December 16 in Daily News by eisc No Comments

The UK government plans to transpose the new EU procurement directives in three stages, with the first in early 2015.

Ed Green, deputy director of EU and domestic procurement policy at the Crown Commercial Service, told a conference the directive covering public contracts was the priority. “We want the directive to be in force by early 2015,” he said.

Speaking at the Government Procurement Summit in London, Green said the directive covering utilities would be transposed in the summer of 2015 and the one covering concessions by April 2016, the deadline by which the directives must be incorporated into national law.

He said a key emphasis of the new rules was to encourage public sector buyers to focus more on market engagement and contract management.

“Procurement is a strategic priority to drive public service reform, support economic growth and tackle the deficit,” said Green.

“You can drive much more value by engaging with the market pre-procurement and in contract management. The new rules should help with that. That’s where we want to see a step change.”

The new rules include a cap on turnover requirements for bidders, set at double the value of the contract, but Green said for some contracts such requirements would not be necessary. “We have to be careful it doesn’t become a norm,” he said.

“We hope the procurement rules are in keeping with the messages from the Crown Commercial Service about the need to free ourselves from solely focusing on the legalistic bit in the middle, which is important to get right, but isn’t where the value is.”

Martin Reeves, national procurement champion for local government and chief executive at Coventry City Council, said of the directives: “We can either see them as an opportunity for transformation and innovation or we can be hamstrung as we were in the past.”


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Marine Information Hub

December 12 in Daily News by eisc No Comments

Rampion Meet the Buyer event, 29th January 2015, Sussex

Rampion Meet the Buyer event focusing on Onshore Cabling and Substation suppliers, 29th January 2015 at a venue to be confirmed but likely to be in the East Worthing/Lancing area.

Following the success of the Rampion Meet the Buyer event held in February at the Amex Stadium in Brighton, E.ON has committed to hold three further events with each focused on a particular aspect of the wind farm. The aim of this series of events is to highlight the potential opportunities arising from the Rampion construction and operation, that may benefit local suppliers based in East and West Sussex, Kent, Surrey and Hampshire.

The first event is aimed at suppliers of products and services that may be able to support the onshore cabling and substation construction. You will hear from E.ON’s contract managers and prospective lead suppliers and installers and there will be plenty of opportunity for networking.

We will announce details of the other two events in due course, which will focus on offshore balance of plant and operations & maintenance respectively.

Full details of the events will be circulated to the Marine South East and Sussex Wind Energy websites.

You can register your interest by clicking 


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Opposition proposes changes to draft amendment on public procurement – The Slovak Spectator

November 28 in Daily News by eisc No Comments

OPPOSITION MPs have introduced their plans to change the amendment to the law on public procurement passed by the government on November 27. The new rules should prevent shell companies with unclear ownership structure from obtaining public tenders.
If Robert Fico’s government really wants to fight the participation of shell companies in public competitions, it should incorporate into its bill a requirement to disclose the end beneficiary, independent MP Daniel Lipšic said at a joint press conference with MP Igor Matovič (Ordinary People and Independent Personalities – OĽaNO), independent MP Alojz Hlina and MEP Richard Sulík (Freedom and Solidarity – SaS) on November 24.
“The prime minister has called on the opposition to contribute towards revamping the bill on shell companies,” Lipšic said, as quoted by the TASR newswire. “His bill can be easily bypassed, however.”
He and his colleagues propose that the participants in a public tender should be obliged to present “a statutory declaration concerning who will be the end beneficiary, and in the case of success in the tender they would have to present confirmation from a bank relating to who has really received the benefits,” as reported by TASR.
At a separate press conference on the same day, Most-Híd MP Lucia Žitňanská announced that she is also preparing an amending proposal to the government’s bill along with Sieť vice-chairman Miroslav Beblavý in order to disclose the end beneficiaries whenever public money is involved, TASR wrote.
According to Fico, there are three categories of companies that should not be allowed to feature in public tenders. The first concerns firms registered in countries in which the country cannot learn about their real owners. Second concerns Slovak companies with shareholders based in the aforementioned countries, “with these companies unwilling to disclose who they are”. The third category involves Slovak firms that feature public officials as owners or co-owners.
“If they have more than 10 percent of the shares, such a company will be excluded from public tenders,” Fico claimed, as quoted by TASR
The draft amendment should allow only companies that are able to disclose their owners up to the level of private individuals to take part in public tenders. The only exception will be companies listed on stock exchanges in the European Union, the European Economic Area or the Organisation for Economic Cooperation and Development and their subsidiaries.
Bidders who provide false information regarding their ownership may be fined between €1,000-10,000.


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