The EU has introduced new public procurement rules which will simplify procedures for public administrations and companies, promote a more socially and environmentally responsible economy, and help to prevent corruption and increase transparency.

All EU member states were required to have legislation in place by April 18 to implement these rules – but it is not clear whether Malta is ready. In January, there were still three legal notices that were as yet to be published to bring Malta in line with the directive. Questions sent to the ministry as to what stage these legal notices have reached were not received at the time of going to print.

The new EU Procurement Directive for over 250,000 public contracting authorities is designed to open up the EU’s public procurement market to competition, prevent ‘buy national’ policies and promote the free movement of goods and services.

It will also recognise environmental and social considerations, as well as innovation aspects, to be taken into account when awarding public contracts, encouraging particular public policy objectives.

Malta has already enacted various changes to the procurement system to help SMEs, which mirror the ones in the new directive.

The new rules also take a more holistic view of value for money

For example, the new directive lays down that contracting authorities will be encouraged to divide large contracts into smaller parts, allowing smaller companies to participate in large tenders. Rules which excluded smaller companies from tenders on the basis of their annual turnover figures have also been relaxed and the new rules limit possible turnover requirements to just twice the contract value.

The European Single Procurement Document (ESPD) is expected to considerably reduce the administrative burden for businesses by enabling them to electronically self-declare that they fulfil the required conditions to participate in a public procurement procedure.

Only the successful tenderer will need to provide full documentary evidence but, in the future, even this obligation could be lifted once evidencecan be linked electronically to national databases.

The new rules also take a more holistic view of value for money.

“It is not just a question of minimising cost but looking at what else can be achieved through procurement,” the European Commission said.

“Public authorities can now provide incentives to companies to develop socially responsible products and services. The awarding of a contract will no longer depend on price alone.”

Public procurement spending acounts for around 14 per cent of EU GDP every year, so it is clearly a magnet for corruption, and the Commission believes that the new Directive will also help in this respect by introducing stronger guarantees for sound procedures.

“More efficiency will free up billions in public money – just a one per cent increase in efficiency will lead to savings of €20 billion,” the Commission said.

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