EU Procurement

1. EU Procurement Nicola Anson, DANTE TF-MSP Meeting, 1 March 2011

2. Introduction to speaker • Head of Finance & Commercial Operations at DANTE (Delivery of Advanced Network Technology to Europe ) from January 2010 • Responsible for procurement at DANTE • Background as Commercial Finance and Operations Director for last 15 years, purchase and sale of companies • Last role: Finance and Operations Director of technology transfer company, University of Cambridge • Currently on learning curve with EU procurement activity within DANTE, supported by Achilles and Matthew Scott

3. Current procurement activity within DANTE • DANTE World Service – Competitive Dialogue • Moscow/Copenhagen leased circuit – Open Procedure • GN3 Connectivity: Buc/Bud/Ath/Sof/Vie/Mil – Competitive Dialogue • CAREN Project leased circuit– Competitive Dialgoue • Transmission and Switching Equipment – Competitive Dialogue • Transatlantic Tender – Framework Agreement

4. What are the “EC rules”? • Principles and detailed procedures to be applied by “contracting authorities” and “utilities” to their procurement • Reflect the risk that such bodies might favour national/local suppliers in their procurement • Such preference breaches the EU Treaty obligations of free movement of goods, services, people and capital (“the four freedoms”) • Open public procurement markets are a key objective of the EU • EC directives set out the procedures. The European Commission and European Court of Justice interpret and apply them

5. Aims and principles • Aim: • To improve supplier opportunities and value for money by opening up the market • Principles: • Transparency • Objectivity • Non-discrimination • Competition

6. Implications of the EC rules • Non-compliance can lead to: • Legal action against purchasers by potential suppliers . . . • And investigation by the European Commission • This will impact on procurement throughout the organisation

7. The process outlined • Publish a call for competition in the Official Journal of the EU • Select suppliers from those responding • Establish non-discriminatory specification • Seek proposals (formal tenders/discussions on proposed solutions). For Competitive Dialogue, Invitation to Participate in Dialogue (ITPD) is issued prior to Invitation to Tender (ITT) • Assess proposals (based on lowest price or most economically advantageous tender) • Notify all interested suppliers of the outcome of the assessment (allowing 10 days for challenges) • Conclude contract • Debrief suppliers • Publish contract award notice in Official Journal of the EU Note: No obligation to award a contract – process can be cancelled at any time prior to contract conclusion

8. Contracts covered • Most contracts above certain thresholds • Thresholds (2010-2011): • Works • €4,845,000 • Supplies and services • Central government, including NHS: €193,000 • Local government, etc: €193,000 Note: Treaty obligation of non-discrimination applies even to low value contracts

9. Key points • Process quite lengthy (typically 6 months plus to award a contract) • Limits on the scope to exclude suppliers from tender lists • Negotiation deliberately constrained • Deliberately restricts the discretion of the purchaser, to limit the scope for “preferential procurement” (e.g. national or local suppliers) • Legal sanctions against purchasers recently strengthened • Caveat emptor!

10. Procurements on behalf of others Where one organisation is procuring on behalf of its community and other NRENs in different countries: • Notice must make clear who is doing the buying • Need clarity as to legal jurisdiction • Need to ensure that the value of the contract and physical scope is clear • Need to have single point of contact for documents Note: EU law does not set out any special rules for joint or cross-border projects

11. Looking ahead • As you may be aware, this year, for the first time, €14M of EC co-financing is available for consortia of public authorities from around Europe to undertake pre-commercial procurements (PCPs) together, through the FP7 ICT work programme 2011. Call 8 (July 2011 and January 2012) is an open call where PCP proposals in any area of public interest can be submitted. • PCP enables public procurers, by acting as technologically demanding first buyers, to drive the development of innovative solutions for public sector challenges from the demand side. In addition to improving the quality and effectiveness of public services, this can help create opportunities for companies to take international leadership in new markets. • High-level event on pre-commercial procurement – towards a smarter research and innovation procurement strategy for Europe (11-12 April 2011, Budapest).