Plans to extend GPA rules meet with opposition

Date: 16/11/1995

By Fiona McHugh

PLANS to change the rules governing public procurement procedures in the European Union's water, energy, transport and telecoms sectors have been met with stiff opposition from utilities companies and a number of member states.

By bringing the EU's rules in line with world-wide regulations agreed during last year's GATT talks, thus ruling out discrimination against European companies, the Commission had hoped to win support from both member states and industry.

But its decision to go beyond the so-called Government Procurement Agreement (GPA) - making the new rules apply to all, instead of some, procurement contracts - has angered both.

The Commission has so far failed to muster any significant support for its proposal and is unlikely to do so before internal market ministers discuss the proposal at their meeting next week (23 November).

Member states remain divided over the scope of the new rules, with some saying they should be limited to contracts covered by the GPA and others arguing that that would create an unlevel playing field within the Union.

GPA regulations apply only to public authorities, but the Commission wants private sector utilities with exclusive rights to obey the same rules.

But Europe's private utilities companies argue they would be put at a competitive disadvantage because their counterparts in the US are not subject to government-imposed procurement rules.

“There needs to be some logic to the Commission's approach. This proposal will clearly put us on an unfair footing. The whole industry is strongly against it,” says Roger Gourves of CEEP, the European Centre of Enterprises with Public Participation.

Member states have also failed to agree on whether - and to what extent - governments may ask prospective bidders for technical advice before publishing tenders.

Under the draft revised directive, contracting authorities would not be allowed to discuss technical details with interested parties. This is necessary, the Commission argues, because such discussions could hamper competition.

But not all member states agree. “The more puritanical countries agree with the Commission and think it should be banned, but there are a number of others which say technical consultation should be allowed in certain circumstances,” explained one diplomat.

De-briefing requirements have also caused problems within the Council of Ministers. Under the Commission proposal, governments would be obliged to tell rejected companies why they did not get the job and explain why the successful company did.

“On this issue, there are three schools of thought. Those who think it is a good idea, those who think it is burdensome and that it should apply only to areas covered by GPA, and those who think it should apply to all areas.”

The stated aim of the current changes is to make sure that outside firms do not have more favourable access to European public procurement contracts than EU ones.

The new GPA will effectively oblige 11 non-EU countries, including the US, Japan, Canada, Korea and five EFTA countries, to open up their public procurement markets to EU firms from the beginning of next year, in return for access to European goverment contracts for their companies from the same date.