14 June 2018


EU proposes to erase possibility to close the market

The proposal on an International Procurement Instrument (IPI) is the EU's response to the lack of level playing field in world procurement markets. While our public procurement market is open to foreign bidders, the procurement markets for foreign goods and services in third countries remain to a large extent closed de jure or de facto. The IPI aims at encouraging partners to engage in negotiations and opening participation for EU bidders and goods in third countries' tenders. 

However, contrary to the original proposal of the year 2012 (COM(2012) 124 final), the amended version proposes to delete the possibility to close the market and to limit possible restrictive measures to price penalties - now called "price adjustment measures". This means that foreign bidders, products and services which are subject to a price adjustment measure for evaluation purposes could still be awarded the contrat, if, despite the price adjustment, the offer remains competitive in terms of price and quality. 


EIC, FIEC and EuDA call upon INTA committee to reject the proposed regulation

EIC, FIEC and EuDA have come together and jointly formulated voting recommendations in which they call upon the INTA Commitee Members to reject the proposed amended Regulation. The European federations are highly concerned that the amended proposal erases via Article 1 para. 5 the possibility for the contracting authorities / entities in EU Member States to exclude from their tenders foreign bidders from third countries which have closed for their part the domestic government procurement market for European companies. 

By contrast, past experience arising e.g. out of the "Covec case" in Poland in 2009 and the unfolding "Pelješac case" in Croatia suggests that the planned limitation of possible restrictive measures to price penalties of up to 20% is not suitable to open third country procurement markets to EU companies nor can they prevent unfair competition by third country firms, in particular state-owned enterprises, in the EU Internal Market. 

Hence, the proposed draft Regulation, in particular in its amended version, will not help opening third-country procurement markets for European companies but will open the EU's internal procurement market - contrary to the spirit of the GPA - entirely for third country biders, with particularly severe implications for the - privately operating - European construction industry.