Public contracts within the EU usually are not enticing sufficient to companies — and competitors for these tenders is shrinking in consequence, in keeping with a damning new report by the European Court docket of Auditors (ECA) printed on Monday (4 December).
Between 2011 and 2021, the variety of corporations competing to supply works, items, and companies to public our bodies fell from an EU common of 5.7 bidders to three.2, per process.
”Over the previous 10 years, the EU and its member states failed to extend competitors for public contracts, and we should now regrettably speak about a misplaced decade,” stated Helga Berger, the ECA member answerable for the audit.
As well as, the vast majority of contracts have been awarded to the lowest bidder, highlighting the truth that value is an important facet when awarding a contract and that environmental, social and innovation standards are hardly ever taken under consideration.
Eight EU international locations, together with Slovakia, Romania and Lithuania, awarded the contract to the bottom bidder in additional than 80 p.c of instances in 2021, ECA experiences.
In 2014, the EU Fee reformed the EU’s procurement directives to make bids extra enticing (and thus extra aggressive), however the reform had extra misses than hits, the EU’s auditors concluded.
In observe, procedures have grow to be 50 p.c longer in over a decade, transparency is just not up-to-date, and the variety of direct awards and single bidding has elevated over the previous 10 years.
For the Luxembourg-based auditors, although the Brussels reform was ”formidable”, the basis causes behind the drop in competitors weren’t addressed as a result of there was no in-depth evaluation of the issue.
”Within the fee and the member states, there is just too a lot deal with complying with the foundations and upward authorized challenges,” Berger informed reporters on Monday. ”They don’t draw sufficient consideration to making sure worth for cash”.
The lower in competitors over the previous decade was pushed by the executive burden of those procedures, the overly-restrictive standards of the bids, and the market focus, the audit reveals.
”The fee ought to put ahead an motion plan to beat key obstacles to competitors and make public contracts extra enticing to corporations,” Berger stated.
From 2011 to 2021, greater than one-in-four public contracts within the EU have been awarded underneath single bidding procedures — a share that has almost doubled from 23.5 p.c to 41.8 p.c in solely 10 years.
Vital will increase in single bidding have been recorded in all sectors, however notably in well being, transport, and gear companies.
The observe additionally differed throughout EU member states, with Slovenia (73 p.c), Cyprus (60 p.c) and Poland (53.5 p.c) recording the very best single-bidding charges in 2021.
What’s worse, nearly 16 p.c of all procurement procedures within the single market did not contain a name for tenders in 2021, that means that direct awards, that are speculated to be an exception within the public procurement directives, are the truth is frequent in nearly all member states.
Lack of information
Nationwide, regional and native authorities spend €2 trillion a 12 months on public procurement, equal to 14 p.c of the gross home product (GDP) of the 27 member states.
Regardless of the dimensions of this public funding, the costs of works, items and companies underneath these contracts are not monitored.
”Within the absence of such info, the impression of modifications in competitors on costs and the price of an absence of competitors can’t be assessed,” says the report, which recommends that the EU government enhance its monitoring of public procurement.