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What is the matter with public procurement, horizontal award criteria and State aid?

Millqvist, Louise LU (2015) LAGM01 20151
Department of Law
Abstract (Swedish)
This thesis takes its starting point in the Green Paper on the Modernisation of EU Public Procurement Policy Towards a More Efficient European Procurement Market, in which the Commission made interesting remarks concerning the interlinks between the Union’s 2020 Strategy, public procurement and State aid. Assessing these interlinks have been an objective of this thesis. As for public procurement and State aid they are both stipulated in order to ensure the free movement of goods under normal conditions of competition. The 2020 Strategy aims at making the Union, yet again, a competitive Union, building on the Union’s foundations, such as the internal market. Thus, the Strategy, public procurement and State aid share commonalities.
Two of... (More)
This thesis takes its starting point in the Green Paper on the Modernisation of EU Public Procurement Policy Towards a More Efficient European Procurement Market, in which the Commission made interesting remarks concerning the interlinks between the Union’s 2020 Strategy, public procurement and State aid. Assessing these interlinks have been an objective of this thesis. As for public procurement and State aid they are both stipulated in order to ensure the free movement of goods under normal conditions of competition. The 2020 Strategy aims at making the Union, yet again, a competitive Union, building on the Union’s foundations, such as the internal market. Thus, the Strategy, public procurement and State aid share commonalities.
Two of three key priorities of the 2020 Strategy are about creating sustainable and inclusive growth. The Commission foresaw public procurement to be a suitable instrument in pursing those priorities. Sustainable and inclusive growth can be translated into the use of social and environmental considerations. Such considerations are allowed in public procurement, as long as they comply with the fundamental provisions of Union law and with the procedural rules of the applicable procurement Directive. If social and environmental considerations are used as award criteria (which this thesis focuses on) they may not confer an unrestricted freedom of choice on the contracting authority, they must be expressly mentioned in the contract documents or the contract notice, and they need also to be linked with the subject-matter of contract.
The requirement concerning the award criteria to be linked to the subject-matter of contract entail, as the law stands today, that they concern what is provided under the contract or the way the contract is carried out. The Commission stated in the Green Paper mentioned above that it was ready to loosen this requirement, as it could be a powerful instrument in achieving the goals of the 2020 Strategy. At the same time the Commission acknowledged that doing so could bring about State aid concerns; contracting authorities would not only be allowed to influence undertakings more generally, but this broader way of influencing them would possibly not render the best price of the public contract and thus confer an economic advantage within the meaning of the State aid rules.
A long line of mainly decisional practice has established a presumption stating that if a public tender is open, sufficiently well-published, transparent, non-discriminatory and unconditional, then the remuneration for the contract will be in line with market conditions. When the remuneration for the contract is in line with market conditions no advantage within the meaning of the State aid rules exist. That presumption applies also when a contracting authority uses social and environmental award criteria and, it is submitted, should also apply if the concept of the subject-matter of contract is to be extended since relaxing the requirement does not necessarily favour the winning contractor. If a sufficient level of competition is raised, all parties taking part in the tender will have made an assessment of the costs that taking part of the tender requires. As long as the participants have set the price independently from each other that must be said to be the market price. It will be a higher price than the price for commensurate goods, but it will nevertheless be the price that the market offered at the time. A price paid at one time which is higher than that for commensurate goods but at the same time creates important incentives, which, if pursued, creates long-term benefits, is that irresponsible public spending or wisely investing? (Less)
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author
Millqvist, Louise LU
supervisor
organization
course
LAGM01 20151
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
offentlig upphandling, statsstöd
language
English
id
7756677
date added to LUP
2015-10-29 14:39:37
date last changed
2015-10-29 14:39:37
@misc{7756677,
  abstract     = {This thesis takes its starting point in the Green Paper on the Modernisation of EU Public Procurement Policy Towards a More Efficient European Procurement Market, in which the Commission made interesting remarks concerning the interlinks between the Union’s 2020 Strategy, public procurement and State aid. Assessing these interlinks have been an objective of this thesis. As for public procurement and State aid they are both stipulated in order to ensure the free movement of goods under normal conditions of competition. The 2020 Strategy aims at making the Union, yet again, a competitive Union, building on the Union’s foundations, such as the internal market. Thus, the Strategy, public procurement and State aid share commonalities.
Two of three key priorities of the 2020 Strategy are about creating sustainable and inclusive growth. The Commission foresaw public procurement to be a suitable instrument in pursing those priorities. Sustainable and inclusive growth can be translated into the use of social and environmental considerations. Such considerations are allowed in public procurement, as long as they comply with the fundamental provisions of Union law and with the procedural rules of the applicable procurement Directive. If social and environmental considerations are used as award criteria (which this thesis focuses on) they may not confer an unrestricted freedom of choice on the contracting authority, they must be expressly mentioned in the contract documents or the contract notice, and they need also to be linked with the subject-matter of contract.
The requirement concerning the award criteria to be linked to the subject-matter of contract entail, as the law stands today, that they concern what is provided under the contract or the way the contract is carried out. The Commission stated in the Green Paper mentioned above that it was ready to loosen this requirement, as it could be a powerful instrument in achieving the goals of the 2020 Strategy. At the same time the Commission acknowledged that doing so could bring about State aid concerns; contracting authorities would not only be allowed to influence undertakings more generally, but this broader way of influencing them would possibly not render the best price of the public contract and thus confer an economic advantage within the meaning of the State aid rules.
A long line of mainly decisional practice has established a presumption stating that if a public tender is open, sufficiently well-published, transparent, non-discriminatory and unconditional, then the remuneration for the contract will be in line with market conditions. When the remuneration for the contract is in line with market conditions no advantage within the meaning of the State aid rules exist. That presumption applies also when a contracting authority uses social and environmental award criteria and, it is submitted, should also apply if the concept of the subject-matter of contract is to be extended since relaxing the requirement does not necessarily favour the winning contractor. If a sufficient level of competition is raised, all parties taking part in the tender will have made an assessment of the costs that taking part of the tender requires. As long as the participants have set the price independently from each other that must be said to be the market price. It will be a higher price than the price for commensurate goods, but it will nevertheless be the price that the market offered at the time. A price paid at one time which is higher than that for commensurate goods but at the same time creates important incentives, which, if pursued, creates long-term benefits, is that irresponsible public spending or wisely investing?},
  author       = {Millqvist, Louise},
  keyword      = {offentlig upphandling,statsstöd},
  language     = {eng},
  note         = {Student Paper},
  title        = {What is the matter with public procurement, horizontal award criteria and State aid?},
  year         = {2015},
}