Procurement News – Europe

Estonian island ferry procurement could fail

September 11 in Daily News by eisc No Comments

The public procurement for finding a ferry operator for the ferry routes between Estonia’s mainland and bigger islands is likely to fail since the state-owned port operator Tallinna Sadam (Port of Tallinn) and Saaremaa Laevakompanii (Saaremaa Shipping Company) are not likely to participate, LETA\/Postimees writes.


The deadline of the procurement that was organised by the Ministry of Economic Affairs is Monday and till that date arrives, Minister of EconomyUrve Palo does not wish to call the procurement a failure yet. “I cannot, I am not allowed to speculate and give any indications to the market,” she said.


The public procurement for finding an operator for ten years, starting October 2016, for the Kuivastu-Virtsu (mainland-Saaremaa island) and Rohuküla-Heltermaa (mainland-Hiiumaa island) ferry routes was announced in spring. The Ministry sent an invitation to participate to a dozen ship operators.


Two days ago, Saaremaa Laevakompanii (SLK), parent firm of Väinamere Liinid OÜ, that operates the ferry routes at the moment, sent a letter to the Minister, asking the conditions of the procurement to be changed. The letter hinted that if conditions are not changed, they will not take part in the contest. The letter, signed by SLK manager Tõnis Rihvk stated that while SLK wants to participate at the procurement, it is made very difficult due to unrealistic deadlines and other disproportional conditions set to the bidders. For example, the bidder should have 4 ferries that correspond to requirements of the procurement by October 1, 2016, which is two years away. SLKcurrently has 3 such ships and Rihvk said that building even one ship corresponding to the procurement requirements in such a short time is unrealistic.


Estonian state-owned company Tallinna Sadam, who has received from the owner a clear guideline to participate in the procurement, had to admit at the beginning of the week that its tender for the purchase or construction of four suitable ferries was a failure.


The company’s council, that met two days ago, authorised the company’s board to continue the search for ships. The company’s board member Allan Kiil said they now seek to find the ships via direct negotiations with manufacturers and ship owners. They even plan to negotiate with owners of the ships that SLK now uses. SLK belongs to Vyacheslav Leedo, but not the ships – they are owned by real estate businessman Olav Miil-related holding companies.


Minister Urve Palo said that no compromises are made with SLK since the letter to change the conditions came so late.


If the procurement fails, the state has two options: either to announce the next procurement or launch direct negotiations with ship operators. “There is still two years of time. I believe that we will find a solution, I will work to in the name of that to the end,” Palo said.


Just like Rihvk, Palo notes that two years is too short a time in the shipbuilding industry. The state should have had to start looking for the operator of Saaremaa and Hiiumaa lines several years earlier.


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Government must lead by example on green procurement

September 10 in Daily News by eisc No Comments

Finance Minister Edward Scicluna has complained that government buildings had been constructed with no respect for energy-saving measures, and announced that “an enormous capital project” for renewable energy was being planned by the Labour government.

Scicluna was addressing attendees of a conference organised in tandem by the Institute for Research and Improvement in Social Sciences (IRISS) and the ambitiously acronymned GReen procurement And Smart city suPport (GRASP) Consortium.

The GRASP project, part-financed by the European Union, is intended to promote the use of renewable energy and improve energy efficiency. 

“For 27 years the race for economic growth was carried out without respect for the environment, then in 1972 Stockholm conference. 20 years later, the world realised that nobody can stop development,” Scicluna said, explaining that the 1992 Rio summit changed the world’s environmental philosophy to one of  ”sustainable development”.

He also said that the EU has been one of the regional blocs that rose to the challenge of tackling climate change at source, issuing a number of directives paving the way for a “decarbonised economy”.

“The question is always, is there a better way?” Scicluna asked, pointing out that people were more environmentally concerned and acting on these concerns by purchasing solar panels and separating household waste at source.

“Government should lead like a responsible citizen by making the best choices. Unfortunately we are a bit late… Government buildings have been built without any respect for passive energy efficiency, but this government has an enormous capital project planned.

“This Green Procurement system will hopefully usher in a new market system – it is likely that we will see the EU adopting an E-procurement system. Malta already has an E-Procurement system in place,” Scicluna said.


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The Trouble with Procurement « URBACT The blog

September 10 in Daily News by eisc No Comments

Hey, lets talk about procurement.……

You still there? Yes, procurement has a bit of a problem doesn’t it. But if I kick off with – “Hey, lets talk about how cities use their resources to get better results”, then it’s probably a different matter.
So what is it about the P word? Surely, we’re only talking about the way in which public authorities package and commission work. We’d all agree that this is important, so why do so many of us switch off as soon as the word is mentioned?

Ever played word association? Try it with ‘Procurement’. I just did and came up with ‘red tape’ ‘bureaucracy’ ‘files’ ‘accountants’ (it gets worse) and  ‘people who like to say NO.” So I think it’s fair to say that Procurement has an image problem.

But as a process it’s not going to go away.  For those of us who like to say yes, and who have a change agenda for cities, this is a shared problem.

So, what’s to be done?

Well, its seems like quite a lot actually. Look around and the picture is not as gloomy as you might think.  Driven by the need for fresh ideas, better value for money and service innovation, procurement officers are being dragged into the 21st Century in cities across Europe and beyond.

A catalyst in this transition is the impact of open innovation processes, including the growing acknowledgment of the power of the crowd. In the context of business organisations, it was Henry Chesbrough, open innovation guru, who challenged the old, closed innovation model.  He ridiculed the prevailing assumption that all of the best ideas could reside in any single organisation, no matter how smart it was.

The limitations of the standard municipal procurement model

His mantra of open innovation applies equally to cities. Given the myriad of players out there – including other cities full of enterprising agencies – doesn’t it make sense for cities to cast their net as widely as possible when looking for solutions, tapping into the power of the crowd.  This can be a challenge to traditional public sector procurement models, which tend to be targeted at specific potential providers.

Another limitation in the typical procurement model is the assumption that the client knows the precise specification of the service they need. Even a basic awareness of creativity principles tells us that this drastically narrows down the options for an innovative solution. Surely it makes more sense to identify as clearly as possible the challenge you face and then put that out to the wider world to invite creative responses.

Happily, that is what we are seeing increasingly often across the world and closer to home.

How are cities approaching this differently?

At the European level, cities are interested in peer-to-peer solutions, which is one of the reasons that URBACT works so well. But there are also some technology-driven models that are attracting the attention of city decision makers. One of these is Living Labs Global Award (LLGA) operated by Citymart. This provides a platform for cities to bring their challenges to a community of their peers.  Barcelona, London, Paris and Moscow are amongst the European cities participating in this process, which operates on a commercial basis.

York, an URBACT Lead Partner city on the Genius Open  project, is also involved. Through LLGA it has transferred its innovation model to Capetown.  Other solutions sourced via the platform include smart streetlighting, parking sensors and city tagging smart phone apps for visitors. A major strength of the platform is that participating cities can use it to develop their Small and Medium Enterprise (SME) base. 95% of the challenges are won by SMEs, who are often deterred by standard public sector commissioning procedures.

The LLGA model provides a peer framework and an off the shelf methodology that can be customised to each city’s needs. But many cities are exploring new ways to generate market solutions to the problems they face without entering these kind of formal structures. They often find that open challenge approaches are particularly effective when trying to engage ‘non-traditional’ service providers, who might be more likely to produce innovative and new solutions to long-standing problems.

The New York City Innovation Zone (iZone) functions as an incubation lab for the city’s Education Department. The iZone has used open calls and hackathons to source fresh approaches to supporting young people’s educational development in one of the world’s most diverse cities. For example, their Gap App Challenge attracted software developers to provide solutions to the challenge of engaging pupils in mathematics. The call  received over 160 eligible submissions and the twelve winning entrants are now piloting their products in schools across the city.

The iZone was developed under former NYC Mayor Bloomberg, and of course the Bloomberg Foundation is currently hosting the Mayors Challenge.  This provides another forum for cities to identify their priority challenges and to seek new and innovative solutions. NESTA, which is also an active partner in the Mayors Challenge has recently completed some interesting research on effective innovation teams around the world (i-teams) which includes examples of new procurement approaches, including the New York experience.

Sharing and finding out more

Looking ahead, On October 9th The European Commission will host an event for cities focused on innovation and effective approaches to sustainable urban development. The Urban Development Network (UDN) event  will provide an opportunity to hear about some of the experiences described here at first hand, as LLGA, NESTA and the Bloomberg Foundation will all be involved. It will also be a chance to find out more about the Commission’s Innovative Actions programme for cities, launching in 2015.

Finally, the URBACT workstream on Social Innovation in cities has a particular interest in how they are adapting systems to encourage and promote change. The workstream is gathering evidence from cities across Europe and you can contribute and find out more on their website.

So, exciting times in the world of city procurement it would seem. Let’s share the word!


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PEPPOL recognised as the future of e-Procurement in Europe — PEPPOL | Pan-European Public Procurement Online

September 8 in Daily News by eisc No Comments

“A rising star” – this is how PEPPOL is described in a blog post from Neelie Kroes, Vice-President of the European Commission in charge of the Digital Agenda for Europe. e-Procurement savings are estimated at €50 billion per year in Europe and, with its common standards and infrastructure, PEPPOL has the power to unleash this opportunity for the entire region.

Since 2008 PEPPOL (Pan-European Public Procurement Online) has been developing and implementing technology standards to align business processes for electronic procurement across all governments within Europe. From 2012, the responsibilities for life cycle management and governance of the results of the PEPPOL project was handed over to OpenPEPPOL AISBL.

PEPPOL is indeed part of a wider EU strategy which has its foundation in the Digital Agenda for Europe and implemented in several policy documents, such as the EC communication, “A strategy for e-procurement”, including actions aimed at supporting the sustainability of the PEPPOL from mid-2012.

The recent announcement of the UK Department of Health which is mandating the use of PEPPOL and GS1 standards, confirms the value of PEPPOL standards for the NHS e-procurement strategy , through which NHS trusts are projected to cut £1.5bn of procurement efficiencies, by the end of 2015-16.

Norway, Sweden, Denmark and France have already established PEPPOL Authorities at national level to ensure public sector governance and a level playing field for service providers offering PEPPOL-based services, and other EU governments are planning to follow the same path.

In Norway, over 4.7 million electronic invoices were exchanged using PEPPOL within the first seven months of 2014, with 44 service providers offering access to the PEPPOL network, as PEPPOL Access Points.

Now that the strategic direction has been clearly defined, EU governments and businesses should look no further to implement e-Invoicing and e-Procurement, ensuring the benefits of interoperability and leveraging on these successful developments.


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Francis Maude: Be prepared for these procurement reforms

September 8 in Daily News by eisc No Comments

New government reforms based on Lord Young’s recommendations in his paper, Growing Your Business, are just months away. Local authorities have a pivotal role in their success.


We have already made progress and are now pushing even further to help small firms win more of the £230bn that the public sector spends every year on goods and services.

The reforms are good news – bringing more choice and competition, ensuring greater value and higher standards. Local authorities will need to prepare now so that they are ready when the legislation comes along.

We have been steadily addressing and removing barriers that historically have prevented small businesses from having a fair bite of the cherry. We are on track to deliver our aspiration of awarding 25% of central government procurement spend, by value, to small and medium-sized enterprises directly and through the supply chain, by 2015.

The government’s reforms include:

Removing pre-qualifying questionnaires (PQQs) for all low value contracts and standardising all others;Increasing the visibility of opportunities by advertising tender opportunities through the refreshed Contracts Finder web portal;Introducing prompt payment within 30 days all the way down a public sector contract supply chain. 

This will help level the playing field for all suppliers, provide more choice and ensure greater value and better services from heightened competition between suppliers.

Most of this legislation will come into effect within months and local authorities are encouraged to act quickly.

More legislation will follow next year, designed to make public sector procurement practice more streamlined and efficient, removing further barriers for small businesses.

A new and improved Contracts Finder

Since January 2011, Contracts Finder has proved to be a critical tool for suppliers, providing a single place for all public sector tenders to be advertised. 

We recognised the system needed updating to keep up with an ever-changing digital landscape. We listened to your feedback and made it easier to input your procurement opportunities. We also acted on supplier feedback by making the search tool more powerful and intuitive. The new version will launch in October and will also be accessible on mobiles and tablets.

The new solution will link to as many central government and local authority portals as technically possible and local authorities should check with their portal providers to find out how they will feed into this.

We encourage you all to act now. We can all play a role in supporting small businesses.

To keep updated, visit

Francis Maude, minister for the Cabinet Office


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