Monti’s bid to shake up big contract regime

Date: 05/03/1998

THE European Commission will next week signal how far it is prepared to go to liberalise rules covering competition for big government orders when Internal Market Commissioner Mario Monti delivers his assessment of how the current regime is working.

Public procurement practices are widely perceived as one of the trouble spots of the single market.

Monti's communication is being eagerly awaited by businesses which want to protect their existing share or win a bigger stake of a market worth billions of ecu a year.

Both companies and the European Parliament have called for changes to the existing rules, introduced in 1992.

Industry has, however, been kept in the dark about how far Monti is willing to push governments to open up markets which have in the past been reserved for national champions.

The Commission has itself complained that many countries have dragged their feet in opening up protected markets to competition. Monti's officials and their counterparts from the Directorate-General for the environment (DGXI) have clashed on one aspect of the communication: how far environment goals can be written into contracts.

Early drafts of the report suggest environment officials have won their battle to make procurement policy 'greener'.

The communication is also expected to commit the Commission to promote greater use of information technology to make it easier for small and medium-sized businesses to find out what contracts they can bid for. Among the many suggestions for change, Europe's engineering consultants, represented by the European Federation of Engineering Consultancy Associations (EFCA), have called for quality provisions to be more clearly written into contract criteria so that authorities do not feel they automatically have to opt for the lowest tender.

They would also like the Commission to tackle the widespread practice of reserving contracts for in-house agencies of national, regional and local authorities. “This amounts to 40&percent; of the market,” said EFCA Manager Jan van der Putten.