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Brussels, 3rd February 2004

Public procurement: Commission welcomes adoption of modernising legislation

The European Commission has welcomed the definitive adoption by the EU's Council of Ministers and the European Parliament of the legislative package simplifying and modernising the public procurement Directives and adapting them to modern administrative needs. The Council has formally endorsed the text agreed in December 2003 in a conciliation procedure between its representatives and those of the Parliament (see IP/03/1649). The Parliament formally approved the conciliation text at its plenary session in Brussels on 29th January. The Directives, some of which were adopted in the 1970s and last updated in the early 1990s, impose EU-wide competitive tendering for public contracts above a certain value, transparency and equal treatment for all tenderers to ensure that the contract is awarded to the tender offering best value for money. The package of amendments was proposed by the Commission in May 2000 (see IP/00/461). It will reduce red tape, set out clearly, on the basis of European Court of Justice case-law, how social and environmental criteria can be applied in awarding contracts and ensure that contracting authorities and bidders can save time and money by using new technology to manage the tendering process. The amended Directives will shortly be published in the EU's Official Journal and will then need to be written into national law within 21 months of publication.

Internal Market Commissioner Frits Bolkestein said: "These reforms of public procurement rules are crucial for Europe's competitiveness. The modernisation introduced by the legislative package will help build on the already huge savings the existing Directives have delivered. The package brings in simplifications and changes that those at the sharp end contracting authorities and bidders - have asked for. Taxpayers will win twice. Electronic procurement and simpler procedures will bring administrative costs down. And more cross-border competition for contracts will cut prices."

Objectives of the legislative package

The legislative package, which was based on extensive consultations with contracting authorities and businesses, has two main objectives. The first is to simplify and clarify the existing Directives. The second is to adapt them to modern administrative needs, for example by facilitating electronic procurement and, for complex contracts, by introducing more scope for dialogue between contracting authorities and tenderers in order to determine contract conditions.

With the objective of enhancing transparency in the award process and of combating corruption and organised crime, the legislative package also includes measures designed to make for greater clarity in the criteria determining the award of the contract and the selection of tenderers.

A study published today by the Commission (see IP/04/149) shows that public procurement accounts for over 16% of the Union's GDP and that the existing public procurement Directives have increased cross-border competition and reduced by around 30% the prices paid by public authorities for goods and services. The study also provides evidence that the implementation of the measures in the new legislative package will deliver further gains.

The full texts of the legislative package as definitively adopted will be made available at:

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