Public procurement procedures, fundamental rights and accountability to citizens

Public procurement procedures, fundamental rights and accountability to citizens

European Union (EU) public procurement law aims to achieve the Internal Market in the public sphere. Public procurement procedures apply both for the EU Institutions (by means of the Financial regulations and rules of application 2013), as well as for the rest of the 28 EU Member States (by means of the Directives 2004/17/EC and 2004/18/EC). In this case, all contracts signed by a public authority of a Member State, as well as all public contracts agreed by the EU institutions, should respect and apply EU public procurement law. Ultimately, even private companies may apply EU public procurement law in their subcontracting procedures.

Indeed, if a private company is going to carry out one activity that has the award of a public grant of more that 50% of the total cost of the project, the subcontracting procedures with other private companies have to be done by the use of public procurements given that, eventually, public money is going to be expended.

The principles of public procurement aim to:

         Remove legal and administrative barriers to participation in cross-border tenders;

         Ensure equal treatment, fair competition, and to remove scope for discriminatory purchasing through non-discriminatory technical specifications in the different procedures;

         Ensure transparency via the publication of notices in the Official Journal, apply pre-announced criteria, and award the contract on the basis of objective criteria.

Indeed, the management of public procurement is a matter of primary importance for public policy. Total public expenditure in the EU area on goods, works and services accounts for a large part of economic activity amounting to over 2 trillion.

Now, discounting the benefits of an efficient procurement procedure, it seems important to establish limits to the excessive use of private contracts to deal with core responsibilities of the Member States, such as the administration of justice or the management of prisons by private entities in cases where there is a monopolistic situation (making all the procurement principles inapplicable), or in situations where the correct application of fundamental rights is paramount, both being a good reason to think twice. It is true that public money should be spent in the most efficient manner, but it is also true that the entity that is receiving this public money should be accountable to the public. Now, to which extent are private companies accountable to citizens? One may argue that the contract clauses and other legal obligations have to ensure the due fulfillment of their task, but procedures take a long time and individuals suffering the consequences of a potential bad administration of a given contract are in a more vulnerable position with a private company than with a public authority.

This element should not be excluded when it is up to us to assess whether or not the government should apply these policies, as is the current case with the administration of prisons and G4S.

Miguel Angel Zaragoza Gimeno     Sept 2013