Christopher H. Bovis’s says in his book EU Public Procurement Law‡ ’One of the most important principles of the Public Procurement Directives is the principle of transparency…it services two main objectives:
Quite, but I would add a third ensuring that transparency extends to
an obligation/social contract on buyers fully disclosing in the public
domain how our money is spent.
Somewhat belatedly following up on the last blog (remember?) I picked up on the zeitgeist of transparency and disclosure currently abroad throughout the EU and wider world. One of the reasons for the delay was a wish to extend the examination to the whole of 2013 (with the archives only becoming available in January) and to all member states.
Previously I said I’d examine in more detail the issue of publication
of the Referenced Document number or to give it its more prosaic
description, ‘Part IV.3.2 of the award: Previous publication(s)
concerning the same contract’. These should appear in each OJEU
disclosed Contract Award. I realise this all sounds highly esoteric and
the procurement geek’s equivalent to angels dancing on pinheads, but is
in fact, along with the disclosure of the contract award itself, a
bellwether on not only openness in who won a publicly funded contract
and at what price but also how it can be linked back to the original
offer through a simple audit trail. When framed within the context of
all OJEU transactions equating to roughly 22% of 20% of the EU’s
economic output/GDP equivalent to something like €570bn* of European
taxpayers’ money, there’s nothing esoteric about it at all.
In initial investigations for the first part of the blog, I was prompted by a PwC/Ecorys report commissioned by OLAF (the EU’s Anti-Fraud Office) examining losses incurred on public budgets in eight member states with €1.4-2.2bn/£1.2-1.9bn being lost based on TED data for 2010. In these initial investigations, whilst it was encouraging to see that overall, disclosure rates had considerably improved since the mid 1990s, it became apparent that the newer member states appeared to be the most compliant. Great you might think and given that with a neophytes’ enthusiasm comes a wish to make a positive impression, there’s nothing necessarily out of context. However, it has to be seen against the wider backdrop of transparency and corruption and this is where something of a paradox is created. The greater the level of perceived corruption in a member state, the greater the levels of contract award disclosure. Are you keeping up at the back there?
To explain this conundrum let’s start with how all the EU member states have performed, including the EU institutions, e.g. the Commission, Parliament Courts of Justice, European Investment Bank etc. in disclosing the number of contract awards to the number of contract notices. A rolling average has been calculated over the previous three year period 2011-2013, examining over 930K records. This generated unusual results on two levels.
Fig. 1 Average Disclosure Rates of Contract Awards 2011-2013
The second puzzle examines the disclosure of the link back to the original contract, i.e. a nice clear transparent audit trail. Over the examined period 2011-2013, 31% of contract awards failed to disclose details of the original contract notice, accounting for a staggering 141K contracts. Any guesses what the value of all this would be? The EU average is dragged down by France publishing 26% of all awards in this period with its poor disclosure rate of only 62%. Again, with the exception of the EU Institutions, 8 of the 18 states with above average Previous Publication disclosure rates are the former COMECON countries. The UK surprisingly languishes third from bottom but then seen within the prism of the rest of this study perhaps not so.
All this could be put down to buyers’ collective administrative laziness without easy access to the original tender or simply a failure to record or know what the OJEU reference was. This sounds more likely than any malign hidden agenda concealing and obfuscating possible potential attempts to link the award with the original contract. It may also be that despite the perceived corruption in many of the countries reporting high levels of disclosure that they also display correspondingly higher levels of enthusiasm for being in the EU, manifesting itself in more positive engagement in its byzantine administrative complexities although this doesn’t hold true for Slovenia, the Czech Republic or Cyprus.
Fig. 2 Average Disclosure rates of Previous Publications concerning the same contract 2011-2013
Despite the Commission’s recent self-damning report on the endemic levels of corruption permeating at various degrees through all levels of EU public life, seen from the perceptions of each member states’ citizens EU Anti-Corruption Report they couldn’t quite bring themselves to rank each member state, conveniently avoiding any discomfiting political issues and upsetting anyone.
Each member state has therefore been ranked according to their average corruption perception index score over the same period 2011-13, based on Transparency International’s figures, since they’re beholden to no one. This is an index in which they have ‘ranked 177 countries and territories around the world on their perceived levels of public sector corruption’. The scores rank from 0 Highly Corrupt through to 100 Very Clean. For details on this visit their excellent site cpi.transparency.org
Figure 3 transposes the average 2011-13 CPI rankings for each member state against the disclosure rates in Figures 1 & 2. The Scandinavians are ranked in the top 10 in what Transparency International calls ‘Very Clean’. In contrast the ‘less clean’ Balkan member states are ranked at the bottom. Any countries in the bottom 10 (thankfully not represented in the EU) are referred to as ‘Highly Corrupt’. Set against the back drop of this ranking the other graphs reveal something unusual, in that the lower a countries’ perceived corruption index, the higher generally the award disclosure rate. There is also a slight upward trend in the disclosure of a previous publication, i.e. the original tender. This is counterintuitive since the trend should show them all going roughly in the same direction.
Fig. 3 Comparison of 2011-2013 Average Corruption Index Rankings of EU states against Average RN & Award disclosure rates 2011-2013
Known Unknowns or No Honestly?
In an attempt to try to present this more simply and effectively, Fig. 4 aggregates the figures for each member state according to their CPI grouping by Transparency International. There is now clearly a discernible downward trend in the disclosure rates of countries’ contract award data against their decreasing levels of perceived corruption. There is also a marginal upward trend in the disclosure rate of countries’ previous documents as the levels of transparency increase as perhaps one might expect.
Fig. 4 Average Disclosure Rates against Corruption Perception Groupings for 2013
The below table aggregates the CPI averages for the period 2011-2013 collected from Transparency International with an attempted emulation of the same shading used by TI in their excellent infographic cpi.transparency.org/cpi2013/infographic/ for ease of visual representation. Apologies to TI if it isn’t exactly right.
To put some perspective on this, two further rungs down the league table and you hit rock bottom with the lowest Score group 0-9 or ‘Highly Corrupt’ occupied by Afghanistan, North Korea & Somalia.
So having dragged you through this minefield you might expect me to cut to the chase revealing some insightful conclusion. Is it a sort of zero sum game whereby the trade-off for less corruption is less transparency or are the figures skewed by the simple fact that the overly high (+100%) disclosure rates from the more corrupt countries (as perceived by Transparency International) in themselves reveal something not quite right?
Or, should we be guided by Prof. Nick Black who recently dismissed the most established method of measuring NHS hospital mortality as having no value and simply ignore these figures?
I don’t know, but it is something the Commission should commission (no pun intended) someone to look at more closely. Step forward Transparency International?
I’ll leave the last words to the peerless and existential Donald Rumsfeld, ex. US Secretary of State for Defense [sic]
‡ Edward Elgar Publishing ISBN 978-1-84720-947-4
*Based on 22% of 20% of the aggregated averages for the EU for 2011-2013 from Statista: www.statista.com/statistics/279447/gross-domestic-product-gdp-in-the-european-union-eu/ . According to a 2011 OECD report ‘On average, 22% of the total value of public procurement in OECD countries that are also members of the EU are published in the OJEU’
† COMECON or Council for Mutual Economic Assistance was the Soviet Union’s response to the OECD and consisted of the former communist Central and Eastern European states.
Scape Group has published details of its £2bn civil engineering and infrastructure framework.
A Prior Information Notice for the Scape National Framework, which will run for four years from October next year, has been published.
The framework will include a total lot value of £1.6bn in England,
Wales and Northern Ireland and a £400M lot specifically for the public
sector in Scotland.An OJEU Contract Notice will be published in January next year.
The European Commission will next month unveil a new tool for sharing of good practices to improve the compliance and quality of public procurement across the EU.
It hopes the e-Library will offer a number of tangible benefits from the sharing of good practices in the area of public procurement such as improved efficiency and effectiveness, and better value-for-money.http://central-government.governmentcomputing.com/news/eu-to-present-an-e-library-of-public-procurem...
More than half of the contracts awarded by the UK government in 2015 were worth at least €100m, despite Whitehall efforts to boost the involvement of small- and medium-sized businesses in public procurement, according to a report by the Taxpayers’ Alliance.
The low-tax campaign group found that Whitehall is vastly more dependent on large public contracts – which tend to be scooped up by outsourcing giants such as Serco, Capita and G4S – than any other EU country.http://publictechnology.net/articles/news/smes-still-being-shut-out-half-whitehall-spend-goes-mega-d...
The UK’s recent decision to leave the EU will not only have profound implications for it & EU but also for the wider world in terms of global trade.
To address this, the Centre of European Law King’s College London is hosting a series of evening seminars @ £20 each, examining these issues and the likely options resulting from the outcome of whatever legal settlement is negotiated between the UK the EU at some unspecified point in the future. These will include The Swiss Model*, WTO, State Aid and Public Procurement amongst others, over the next six months.
To quote the Centre for European Law ‘an outstanding array’ of King’s College’ expertise will conduct these seminars over this academic year ‘covering twelve different areas of law on which Brexit is likely to have an impact’.
The full details of these and registration links are available at: http://www.kcl.ac.uk/law/research/centres/european/Brexit-Seminar-Series-Schedule.pdf
Topics already covered by recent open lectures were ‘Opening Transatlantic Markets’ and ‘After Brexit: is the EEA an option for the UK?’ Details of some conference materials are available to download at: http://www.kcl.ac.uk/law/research/centres/european/index.aspx
Whether a legal professional or not, if you are interested in gaining a better insight on the implications these huge legal and constitutional changes will have on you and your company, inside or outside the single market, these seminars are to be recommended.
Will the UK use it’s membership of the World Trade Organization (WTO) and the European Economic Area (EEA) as potential platforms for negotiating the new UK-EU trade relationship?.
For the time being, the rules apply as they always have done. The key thing to consider now is whether any contracts are affected by European Commission grants and/or State aid and determine what effect Brexit will have on that funding. Another key consideration is whether long term government projects that are currently being procured will rely on free movement (of people or goods), and, if so, what contractual provisions could be inserted to provide for a scenario where there is no free movement.
A pre-commercial procurement tender covers R&D services relevant to the design, development and pilot use of a platform to support hybrid cloud environments. The HNSciCloud pre-commercial procurement project is funded by ten of Europe’s top research organisations and by the European Commission.
Read the full article by Antony Savvas at: http://www.channelbiz.co.uk/2016/07/25/e5-3-million-tender-support-european-cloud-initiative/