Procurement News – Europe

Poland: the latest changes in Polish Public Procurement Law — the biggest amendment since 2004 | Briefings | The Lawyer

August 20 in Daily News by eisc No Comments

On 25 July 2014, the Polish Parliament passed on an amendment of the Public Procurement Law. The changes introduced by this legislation reflect suggestions put forward by the country’s entrepreneurs and representatives of its public administration. The amendments are designed to tackle the most serious problems encountered in the public procurement process in Poland, such as competition among economic operators based solely on price, social dumping and the impossibility of valorising already concluded contracts. The amendment will soon go to the Senate (the second chamber of the Polish Parliament) and will most likely come into force in the final quarter of 2014.

Currently, the outcome of public procurement tenders in Poland is usually determined only by the price criteria. This situation is unfavourable both for economic operators and contracting entities. Often, members of the first group, in their efforts to submit the ‘best’ (i.e. lowest-priced) offers, agree to carry out the contract at underestimated costs, which often confronts these entities with bankruptcy. The latter group, the contracting entities, have taken into consideration only one economic factor (i.e. price) and are likely to have received services or goods of low quality — or none at all, if the economic operator was declared bankrupt in the course of fulfilling the contract…


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Builder and drinks firm in battle for events venue as tender process collapses –

August 18 in Daily News by eisc No Comments

A bitter battle has erupted between property developer Owen O’Callaghan and BAM/Heineken Ireland over Cork’s €50m concert venue, its answer to Dublin’s O2 and Belfast’s Odyssey Arena.


Tensions deepened after Cork City Council was last week forced to abandon a public tender process for the giant events centre amid fears any winning bid would not be legally valid.

The council confirmed via a posting on the EU tenders website that it was suspending a lengthy tender process for the new 7,000-seater venue. It will instead opt for a “direct negotiating process” with the two main interested parties, Mr O’Callaghan and BAM/Heineken Ireland.

Both have tabled rival bids for €16m in promised city council and National Lottery funding.

The proposals were ready to proceed to immediate construction, but the new process will delay the project by several months.

The process collapsed amid concerns that the tender system was not legally valid after US events centre operator, Live Nation, which runs Dublin’s O2, withdrew from the two main bids.

Live Nation’s withdrawal came after it voiced concerns over conditions applied by City Hall. It was feared that these conditions could have an impact on the future commercial operations of the proposed venue. Only one tender was submitted to the city council by the July 4 deadline, from BAM/Heineken. Mr O’Callaghan, who is leading the rival project, opted not to submit a tender amid concerns it would not be legally valid without having an events operator fully on board.

“We are not surprised at this outcome,” Mr O’Callaghan told the Sunday Independent.

“The withdrawal of Live Nation, the proposed operator for both bidders, from the process some weeks ago ensured that the competitive process around public funding for the project could not be finalised.”

However, the developer insisted that his firm was still very interested in providing a modern events centre for Cork.

“We will look carefully at the new process that is being put in place by the city council and assess whether it can form a realistic basis for the delivery of this important project for Cork,” he said.

BAM/Heineken also said it remains committed to providing an events centre.

The drinks company’s bid is focussed on the old Beamish & Crawford brewery site on South Main Street in the city centre. It argues that locating the venue on its site will help transform one of Cork’s most ancient areas and enhance nearby attractions, including St Fin Barre’s Cathedral, the Medieval city walls and the 18th Century English Market. The O’Callaghan project involves a site at Albert Quay.

The outline project has secured a promise of €10m in National Lottery funding and €6m in city council grants. More than 200 jobs hinge on the venue going ahead.

Sunday Independent

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6 ways to add competition to a public sector procurement process (first 2 here)

August 18 in Daily News by eisc No Comments

The UK public sector procurement market is worth in the region of £150bn per year. Balancing quality and value is certainly a significant challenge.

Alongside supporting the process with appropriate technologyand guiding practitioners with effective best practice, maximising the level of effective competition in the market is perhaps the most crucial enabler to improving the value delivered by these budgets.

In public sector procurement, the guiding objective for authorities is to achieve value for money through fair and open competition. The Government defines value for money as “the optimum combination of whole life costs and quality”, but for fairness and competition, EU procurement law and principles (such as non-discrimination and transparency) also come into play.

Competition, then, is core to effective procurement and public bodies need to take steps to promote and encourage it. Below are 10 steps public sector procurers can take through the procurement process to help build and sustain a healthy level of competition.

Stage 1: Pre-procurement

The first stage in the standard procurement lifecycle is focused on strategy, planning and requirements definition. At this stage, authorities can also take action to nurture and drive competition.

1. Promote contract tender opportunities as widely as possible, using a variety of marketing channels to reach the largest potential marketplace.

2. Ensure engagement with the widest possible range of suppliers (especially where the marketplace is currently small) and consider innovative or alternative approaches to meeting contract requirements.

3. Where there isn’t a particularly competitive marketplace, take steps to encourage greater competition with the current supplier. And if there no (or minimal) competition, understand the capabilities of potential suppliers and consider adapting requirements accordingly or breaking the contract up into smaller requirements.

Stage 2: Tendering

From initial contact with bidders, through pre-qualification and selection, final tendering and the awarding of the contract authorities can address competition.

4. Make sure every bidder has access to exactly the same information about the contract with detailed requirements and accurate information. The more information they have the more accurate they will be able to make their pricing.

5. Manage bidders by including benchmarking within the terms of the contract, thereby encouraging tighter control of costs and performance.

6. Consider adjusting contract durations in order to achieve the maximum competitive outcome. Having shorter contracts with break clauses may deliver the potential for more competitive pricing as a result of the increased frequency of tendering.

A healthy competitive market benefits all participants in the public procurement process – and by following these basic tips, public authorities can help ensure that the spirit of competition is alive and well. Not only will the bidders be assured fairness and transparency in the tender process, but contracting authorities will reap commercial rewards – and value for money – as result of greater, more intense competition.


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Leaked CETA Treaty: Major Blow to Buy Local | The Tyee

August 15 in Daily News by eisc No Comments

If one country is negotiating a treaty with a union of 27 countries, you might think that those 27 countries would have by far the most people in the negotiations. Not true for CETA: In some negotiations of the free trade deal between Canada and the European Union, Canadians have greatly outnumbered Europeans, one participant told the Tyee.

The reason Canada sent so many people is that the provinces have a say in CETA, and they will be heavily affected by the deal. The treaty will open up public procurement not only at the national level, but also at the provincial and local level. CETA is going much further in this regard than any previous trade agreements signed by Canada.

The outcome isn’t what the provinces and municipalities had hoped for. CETA will likely severely crimp if not end “buy local” strategies at all levels of government in Canada.

Many local governments and municipalities have used public tenders to foster a stronger local economy, requiring, for example, that winning bidders employ people in the region. Or governments have tried to strengthen the local food movement, as the city of Toronto does with its local food procurement for public child care.

But with CETA in place, it won’t be possible to favour local suppliers when governments buy. Under the rules of free trade, European companies must not be discriminated against.

Thresholds vary

The final documents that leaked yesterday give the outlines of the procurement process, but the crucial details are in the appendix which hasn’t yet been published. But inside sources have revealed to the Tyee the precise thresholds, above which tenders will have to follow the CETA rules.

The thresholds above which CETA rules will apply vary depending on the business sector and on the level of government. And they are so low that the lion’s share of public contracts will be covered. In the final CETA text, the thresholds are written in the international currency SDR (Special Drawing Rights), a currency the International Monetary Fund uses. In construction, the threshold is set for all levels of government at 5 million SDR, which equals $8.3 million in Canadian dollars.

For other procurements, the threshold for national governments is $130,000 SDR ($217,000 CAD). For provinces and publicly-owned companies the thresholds vary. On average, they are at $200,000 SDR ($335,000 CAD). For local governments, the threshold is the highest at $355,000 SDR ($593,000 CAD).

The CETA deal does not allow splitting contracts into smaller amounts to circumvent the rules. The authors of the text have included a specific clause to prevent such behaviour.

Furthermore, Canada has to establish a common IT platform on which government, provinces and municipalities must list their offers. That might produce additional costs for Canadian governments, but will on the other hand foster transparency in the bidding process. This provision is meant to combat corruption.

The logic driving the opening up of local procurement to bidding by European firms is that it could result in lower costs to taxpayers.

Under the final wording of CETA just leaked, environmental or social considerations can be applied to procurement contracts by public institutions, which still could ask specifically for an environmentally-friendly produced product, as long as the requisition doesn’t state that the product has to be local.

The same is true for social considerations. It would be perfectly fine with CETA to require the supplier to include a certain percentage of women or minorities in their staff, though it won’t be possible to hire specifically “local” or “Canadian” people.

Water utilities exempted

Water resources are explicitly exempted from CETA, which states: “Each Party has the right to protect and preserve its natural water resources and nothing in this Agreement obliges a Party to permit the commercial use of water for any purpose, including its withdrawal, extraction or diversion for export in bulk.”

This may comfort those who worried CETA would force privatization of public water utilities. Consider, however, this further provision: “Where a Party permits the commercial use of a specific water source, it shall do so in a manner consistent with the Agreement.”

In other words, once a water utility has been privatized by a Canadian government body, it will be hard to make it public again, because then comes into play another highly controversial part of the CETA treaty, investor rights provisions that would drive up settlement costs.

There is also the question of what happens once water is bottled and used in a commercial context.

In this regard, CETA has fulfilled the fears of many opponents, said Garry Neil, executive director of the Council of Canadians. “Water isn’t really protected under CETA,” he told The Tyee. “Once a government allows water to be bottled, it’s no longer protected.


Very alarmist article and probably to be taken with caution as like in the EU, local cannot be favoured directly but plenty of dispositions will in effect favour local companies.

+ imagine the cost of European sending their products to Canada compared to a Canadian company supplying the same products…

A critical look through this article is needed…

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Strong jump in buyers searching for suppliers Ι Construction Enquirer

August 14 in Daily News by eisc No Comments

A surge in buyers using the Constructionline register of prequalified contractors points to a continuing recovery in the industry.

Constructionline reported a 12% year-on-year increase in construction buyers’ use of its online procurement portal at the end of Q2 2014.

The figures are calculated from the number of tender lists and supplier searches run on the database.

Buyers’ use of  Constructionline increased by over 2% between March and June 2014, while the number of construction clients using the service to assess suppliers reached 2,665 in the second quarter – an increase of 31.

Constructionline’s subcontractor membership base also grew by 8% in the second quarter of 2014 and now totals in excess of 23,000 firms.

Neil Thompson, a director at Constructionline, said: “Over the past 12 months we’ve seen a steady rise in construction buyers using the service to assess suppliers, which all points towards increased activity on the horizon.

“While it’s evident that construction is benefiting from the wider UK recovery, there are new challenges facing the sector as it grows.

“The supply and demand issue has reversed since the downturn and there’s now a worry of capacity shortage among construction suppliers.

“To help combat the shortage of available subcontractors we expect more buyers will grow the number of construction partners they work with to deliver schemes.

“We regularly engage with buying organisations to help them source new suppliers through our meet the buyer events, supplier engagement days and webinars as well as advertising upcoming work opportunities on our noticeboard.”


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