Is it time for some EU flexibility?

Jun 23 2009 by Karen Dent, The Journal

THE process of public procurement is a hot topic at the moment. Throughout the region there are task groups looking at whether large contracts can be split into smaller contracts to favour SMEs or whether SMEs can bid for contracts in consortia.

It is worth considering the origins of public procurement regulations and different legal interpretations.

The main public procurement regulations were introduced in Europe in the late 1980s and early 1990s. At the time it was possible for certain public or statutory bodies to advertise larger scale contracts on a pan-European basis through the “C” series of the Official Journal of Europe. These became known as OJEC notices. It was also possible to voluntarily advertise notices if you were a private body. At the time it was possible to manually read the OJEC notices of all 15 member states in about 90 minutes.

Now known as the Official Journal of the European Union (OJEU) the system has numerous search engine products which electronically scan for notices produced by all 27 member states.

Originally the regulations were billed as another strand of fair competition in the wider Common Market.

Criticism of the system stems from a basic and yet fundamental difference in how the UK and Europe interpret law. The EU system would describe fair competition as “good competition should be encouraged and unfair competition should be prohibited”. It would then be at the discretion of regulators to interpret the rules. The UK system is a strict interpretation which would state “unfair competition is prohibited”. Case law then develops to precisely interpret the law and systems develop which lead to a more bureaucratic approach.

Essentially the UK system is not ideal for implementing the EU legislation as it is not suited to discretion. Equally, a UK style analysis of how the system can be improved will not be ideal. What may be needed are discussions about how the UK can introduce an EU-style of flexibility which was what was originally envisaged.

For more information on how Dickinson Dees can help assist SMEs in the region, contact Neil Warwick, partner on (0191) 279-9375.