Explanatory Memorandum to COM(2011)895 - Procurement by entities operating in the water, energy, transport and postal services sectors - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2011)895 - Procurement by entities operating in the water, energy, transport and postal services sectors. |
|---|---|
| source | COM(2011)895  |
| date | 20-12-2011 |
· Grounds for and objectives of the proposal
The Europe 2020 strategy for smart, sustainable and inclusive growth [COM(2010) 2020] is based on three interlocking and mutually reinforcing priorities: developing an economy based on knowledge and innovation; promoting a low-carbon, resource-efficient and competitive economy; and fostering a high-employment economy delivering social and territorial cohesion.
Public procurement plays a key role in the Europe 2020 strategy as one of the market-based instruments to be used to achieve those objectives by improving the business environment and conditions for business to innovate and by encouraging wider use of green procurement supporting the shift towards a resource efficient and low-carbon economy. At the same time, the Europe 2020 strategy stresses that public procurement policy must ensure the most efficient use of funds and that procurement markets must be kept open Union-wide.
In the face of those challenges, the existing public procurement legislation needs to be revised and modernised in order to make it better suited to deal with the evolving political, social and economic context. This concerns not only procurement by the State and public authorities, but also contract awards by utilities operators which have their own specific procurement regime.
In its communication of 13 April 2011 on “The Single Market Act: Twelve levers to boost growth and confidence”, the European Commission included among its twelve key priority actions to be adopted by the EU institutions before the end of 2012, a revised and modernised public procurement legislative framework to make the award of contracts more flexible and enable public contracts to be put to better use in support of other policies.
This proposal has two complementary objectives:
· Increase the efficiency of spending to ensure the best possible procurement outcomes in terms of value for money. This implies in particular a simplification and flexibilisation of the existing public procurement rules. Streamlined, more efficient procedures will benefit all economic operators and facilitate the participation of SMEs and cross-border bidders.
· Allow procurers to make better use of procurement in support of common societal goals such as protection of the environment, higher resource and energy efficiency, combating climate change, promoting innovation, employment and social inclusion and ensuring the best possible conditions for the provision of high quality social services.
· General context
Public procurement plays an important role in the overall economic performance of the European Union. In Europe, public purchasers spend around 18% of GDP on supplies, works and services. Given the volume of purchases, public procurement can be used as a powerful lever for achieving a Single Market fostering smart, sustainable and inclusive growth.
The current generation of public procurement Directives – Directives 2004/17/EC i and 2004/18/EC – are the product of a long evolution that started in 1971 with the adoption of Directive 71/305/EEC. By guaranteeing transparent and non-discriminatory procedures, those Directives principally aim to ensure that economic operators from across the Single Market benefit fully from the basic freedoms in competing for public contracts.
A comprehensive economic evaluation has shown that the procurement Directives have achieved their objectives to a considerable extent. They have resulted in greater transparency and higher levels of competition while achieving measurable savings through lower prices.
Stakeholders have nevertheless voiced demand for a review of the public procurement directives to simplify the rules, increase their efficiency and effectiveness and make them better suited to deal with the evolving political, social and economic context. Streamlined, more efficient procedures will increase flexibility for contracting authorities, benefit all economic operators and facilitate the participation of SMEs and cross-border bidders. Improved procurement rules will also allow contracting entities to make better use of procurement in support of common societal goals, such as the protection of the environment, higher resource and energy efficiency and combating climate change, promoting innovation and social inclusion, and ensuring the best possible conditions for the provision of high quality social services. Those orientations were confirmed by the results of a consultation of stakeholders conducted by the European Commission in spring 2011, where a very large majority of stakeholders supported the proposal to review the procurement Directives in order to adapt them better to the new challenges faced by procurers and economic operators alike.
· Existing provisions in the area of the proposal
Together with the proposed new Directive on procurement by public authorities, the proposal will replace Directives 2004/17/EC and 2004/18/EC as the core elements of the European Union public procurement legislative framework.
The Directive will be complemented by the further elements of that legislative framework:
· Directive 2009/81/EC i sets specific rules for defence and sensitive security procurement,
· Directive 92/13/EEC i establishes common standards for national review procedures to ensure that rapid and effective means of redress is available in all EU countries in cases where bidders consider that contracts have been awarded unfairly.
· Consistency with the other policies and objectives of the Union
This initiative implements the Europe 2020 strategy for smart, sustainable and inclusive growth [COM(2010) 2020] and the Europe 2020 Flagship Initiatives on a Digital Agenda for Europe [COM(2010) 245], the Innovation Union [COM(2010) 546], an Integrated Industrial Policy for the Globalisation Era [COM(2010) 614], Energy 2020 [COM(2010) 639] and a Resource Efficient Europe [COM(2011) 21]. It also implements the Single Market Act [COM(2011) 206], in particular its twelfth key action “Revised and Modernised Public Procurement Legislative Framework”. It is a CWP 2011 strategic initiative.
· Consultation of interested parties
The European Commission published on 27 January 2011 a Green Paper on the modernisation of EU public procurement policy – Towards a more efficient European Procurement Market i launching a broad public consultation on options for legislative changes to make the award of contracts easier and more flexible and enable public contracts to be put to better use in support of other policies. The purpose of the Green Paper was to identify a number of key areas for reform and ask for stakeholders’ views on concrete options for legislative change. Among the issues covered were the needs for simplifying and flexibilising procedures, strategic use of public procurement to promote other policy objectives, improving access for SMEs to public contracts and combating favouritism, corruption and conflicts of interest.
The public consultation closed on 18 April 2011 and met with a high response. In total, 623 replies were received, coming from a wide variety of stakeholder groups including central Member State authorities, local and regional public purchasers and their associations, undertakings, industry associations, academics, civil society organisations (including trade unions) and individual citizens. The majority of replies originated from the United Kingdom, Germany, France and, to a lesser degree, Belgium, Italy, the Netherlands, Austria, Sweden, Spain and Denmark.
The results of the consultation were summarised in a synthesis paper[6] and presented and discussed at a public conference on 30 June 2011[7].
A very large majority of stakeholders appreciated the initiative of the European Commission to review the current procurement policy. Amongst the different subjects discussed in the Green Paper, stakeholders put a particularly strong emphasis on the need to simplify procedures and make them more flexible. There was also consensus among all stakeholder groups that the rules on procurement by utilities were still relevant. A clear majority of respondents agreed that there was still a need for a specific set of rules to be applied to public utilities operators and that the different rules applying to utilities operators adequately reflect the specific character of utilities procurement.
In the same vein, a clear majority of respondents agree that the criteria used for defining the entities subject to the utilities rules (activities carried out by the entities concerned, their legal statute and, where they are private, the existence of special or exclusive rights) are still appropriate and should be maintained. Most respondents are also in agreement that the profit-seeking or commercial ethos of private companies cannot be regarded as sufficient to guarantee objective and fair procurement, if those companies are operating on the basis of special or exclusive rights.
On the strategic use of public procurement to achieve the societal goals of the Europe 2020 strategy, stakeholders’ opinions were mixed. Many stakeholders, especially businesses, showed a general reluctance to the idea of using public procurement in support of other policy objectives. Other stakeholders, notably civil society organisations, were strongly in favour of such strategic use and advocated far-reaching changes to the very principles of the European Union public procurement policy.
· Collection and use of expertise
In addition to the Green Paper consultation, the European Commission conducted in 2010/2011 a comprehensive evaluation of the impact and effectiveness of EU procurement legislation drawing on an extensive body of evidence and new independent research. The studies assessed mainly the cost and effectiveness of procurement procedures, issues of cross border procurement, SMEs’ access to procurement markets and the strategic use of procurement in Europe. With regard to utilities procurement, the evaluation examined whether the utilities sectors are now more exposed to competition than they were at the time of adoption of the procurement regime.
The findings of the evaluation showed that legislative activity to liberalise access to utility sectors has not yet translated into sustained or effective competitive pressure on incumbent operators. In many utility sectors, high levels of market concentration or anaemic competition continue to be observed. The evaluations concluded that conditions have not evolved to the extent that competition can be deemed to be sufficiently strong on a sector wide basis to permit the exclusion of sectors from the scope of the utilities procurement Directive. The rationale of the Directive continues to apply in general while specific exemptions from the application of the procurement rules may be justified on the basis of an in-depth, case by case analysis.
· Impact assessment
The impact assessment and its executive summary give an overview of the different options for each of the five groups of basic problems (administrative organisation, scope, procedures, strategic procurement and access to procurement markets). Based on an analysis of the advantages and disadvantages of the different options, a package of preferred options was identified that should optimise the synergies between the different solutions allowing savings due to one type of action to neutralise related costs caused by another (e.g. possible increased procedural requirements caused by strategic procurement actions could partially be neutralised by savings related to the improved design of procurement procedures). Those preferred options form the basis of the present proposal.
The draft Impact Assessment report was scrutinised by the Impact Assessment Board, who asked for amendments concerning in particular the identification of the specific elements of the legislative framework to be addressed, the description of the options under discussion, a more in-depth cost-benefit analysis of the selected headline actions and the systematic integration of stakeholder views, both in the problem definition and to complement the analysis of impacts. Those recommendations for improvement were integrated in the final report. The opinion of the Impact Assessment Board on the report is published together with this proposal, as well as the final Impact Assessment report and its executive summary.
Contents
- Legal elements of the proposal
- Budgetary implication
- 2. Consultation of interested parties and impact assessment
- Consultation methods, main sectors targeted and general profile of respondents
- Summary of responses and how they have been taken into account
- 5. Additional information
- 1) Simplification and flexibilisation of procurement procedures
- 2) Strategic use of public procurement in response to new challenges
- 3) Better access to the market for SMEs and Start-ups
- 4) Sound procedures
- 5) Governance
· Legal basis
The proposal is based on Articles 53 i, 62 and 114 of the Treaty on the Functioning of the European Union (TFEU).
· Subsidiarity principle
The subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the EU.
The objectives of the proposal cannot be sufficiently achieved by the Member States for the following reason:
The coordination of procurement procedures above certain thresholds has proven an important tool for the achievement of the Internal Market in the field of purchasing by utilities. It ensures effective and equal access to contracts for economic operators across the Internal Market. Experience with Directives 2004/17/EC and 2004/18/EC and the earlier generations of procurement Directives has shown that European-wide procurement procedures provide transparency and objectivity in procurement resulting in considerable savings and improved procurement outcomes that benefit utilities operators, their customers and, ultimately, the European taxpayer.
This objective could not be sufficiently achieved through action by Member States which would inevitably result in divergent requirements and possibly conflicting procedural regimes increasing regulatory complexity and causing unwarranted obstacles for cross-border activities.
The proposal therefore complies with the subsidiarity principle.
· Proportionality principle
The proposal complies with the proportionality principle since it does not go beyond what is necessary in order to achieve the objective of ensuring the proper functioning of the Internal Market through a set of European-wide coordinated procurement procedures. Moreover, the proposal is based on a “tool box” approach, allowing Member State a maximum of flexibility in adapting the procedures and tools to their specific situation.
Compared to the current procurement Directives, the proposal will reduce administrative burden related to the conduct of the procedure both for contracting entities and economic operators; where new requirements are foreseen (for instance, in the context of strategic procurement), those will be compensated by the removal of constraints in other areas.
· Choice of instruments
Since the proposal is based on Articles 53 i, 62 and 114 TFEU the use of a Regulation for the provisions applying both to the procurement of goods and services would not be permitted by the Treaty. The instrument proposed is therefore a Directive.
During the impact assessment process, non-legislative options were discarded for reasons set out in detail in the impact assessment.
The proposal has no budgetary implications.
· Repeal of existing legislation
The adoption of the proposal will lead to the repeal of existing legislation (Directive 2004/17/EEC).
· Review/revision/sunset clause
The proposal contains a review clause concerning the economic effects of the threshold amounts.
· Transposition measures and explanatory documents
The proposal concerns an area where Union legislation has a coordination purpose, with a significant impact on a wide range of national legal sectors. Nothwithstanding the coordination purpose, many provisions constitute full harmonisation and the proposal includes a large number of legal obligations. Member States supplement Union rules with national additional provisions so as the whole system becomes operational.
In this context, the Commission has identified a number of factors which render explanations by Member States necessary both for the correct understanding of transposing measures and for the functioning of the whole picture of procurement rules at national level:
– transposing and implementing measures are adopted at different institutional levels (national / federal, regional, local);
– in addition to the different regulatory layers, in many Member States rules are also established according to the sector involved or the type of procurement concerned;
– administrative measures of general or specific nature complement and in some cases overlap the main legal framework.
Only Member States can explain how the different measures transpose the Union directives in the public procurement sector and how the same measures interact each with the others.
For those reasons, the communication of documents explaining the relationship between the various parts of this directive and the corresponding parts of national transposition measures should be communicated together with the transposing measures, in particular concordance tables, which constitute an operational tool for the analysis of the national measures.
· European Economic Area
The proposed act concerns an EEA matter and should therefore extend to the European Economic Area.
· Detailed explanation of the proposal
The proposed Directive provides for a simplification and flexibilisation of the procedural regime set by the current public procurement Directives. For this purpose, it contains the following measures:
Clarification of scope: The basic concept of “procurement” which appears also in the title of the proposed Directive has been newly introduced in order to better determine the scope and purpose of procurement law and to facilitate the application of the thresholds. The definitions of certain key notions determining the scope of the Directive (such as body governed by public law, public works and service contracts, mixed contracts) have been revised in the light of the case-law of the Court of Justice. At the same time, the proposal endeavours to keep continuity in the use of notions and concepts that have been developed over the years through the Court’s case-law and are well known to practitioners. In this context, it should be noted that minor deviations from the wording or presentation known from the previous Directives do not necessarily imply a change of substance, but may be due to simplification of texts.
The notion of special or exclusive rights is central to the definition of the scope of this Directive, since entities which are neither contracting authorities not public undertakings within the meaning of this Directive are subject to this Directive only to the extent that they exercise one of the activities covered on the basis of such rights. It is therefore appropriate to clarify that rights which have been granted by means of a procedure in which adequate publicity has been ensured and where the granting of those rights was based on objective criteria, notably pursuant to Union legislation, do not constitute special or exclusive rights for the purposes of this Directive.
The traditional distinction between so-called priority and non-priority services (“A” and “B” services) will be abolished. The results of the evaluation have shown that it is no longer justified to restrict the full application of procurement law to a limited group of services. However, it became also clear that the regular procurement regime is not adapted to social services which need a specific set of rules (see below).
Following the results of the evaluation, the scope in terms of sectors covered remains largely unchanged. However, procurement made for the purpose of exploring oil and gas has been withdrawn from the scope as that sector has been found to be subject to such competitive pressure that the procurement discipline brought about by the Directive is no longer needed. The competitive situation in this sector of activity has been examined in the context of four different requests for exemption under the current Article 30[8]. In all four cases, the relevant geographical market was consistently found to be worldwide, which is furthermore in accordance with well-established practice in merger cases[9]. The conclusions have consistently been that the exploration market is not highly concentrated. Apart from state owned companies, the market is characterised by the presence of three international vertically integrated private players named the super majors (BP, ExxonMobil and Shell) as well as a certain number of so-called ‘majors’ and the individual market share of even super majors is well below one percent. All of this has consistently been found to constitute indications of direct exposure to competition and access to the market is furthermore liberalised through the provisions of the Hydrocarbon Licensing Directive[10]. It therefore appropriate to simplify the legal situation and to lessen the administrative burden on all concerned (contracting entities, Member States, the European Commission, the European Parliament and Council) by avoiding the need to adopt individual Article 30 Decisions in respect of each of the remaining 23 Member States.
Toolbox approach: Member State systems will provide the three basic forms of procedure which already exist under current Directives: open and restricted procedures as well as negotiated procedures with prior call for competition. They may, in addition, foresee either as standard procedure or subject to certain conditions the innovation partnership, a new form of procedure for innovative procurement (see below).
Contracting entities will furthermore have at their disposal a set of six specific procurement techniques and tools intended for aggregated and electronic procurement: framework agreements, dynamic purchasing systems, electronic auctions, electronic catalogues, central purchasing bodies and joint procurement. Compared to the existing Directive, those tools have been improved and clarified with a view to facilitating e-procurement.
Promotion of e-procurement: The use of electronic communications and transaction processing by purchasers can deliver significant savings and improved procurement outcomes while reducing waste and error. The proposal aims at helping Member States to achieve the switchover to e-procurement enabling suppliers to take part in online procurement procedures across the Internal Market. For this purpose, the proposed Directive provides for the mandatory transmission of notices in electronic form, the mandatory electronic availability of the procurement documents and imposes the switch to fully electronic communication, in particular e-submission, in all procurement procedures within a transition period of two years. It streamlines and improves Dynamic Purchasing Systems and electronic catalogues, fully electronic procurement tools that are particularly adapted to highly aggregated procurement done by Central Purchasing Bodies. The e-procurement instrument would also enable contracting authorities to prevent, detect and correct errors generally due to wrong understanding or interpretation of public procurement rules.
Modernisation of procedures: The proposal provides a more flexible and user-friendly approach for certain important features of procurement procedures. Time-limits for participations and submission of offers have been shortened, allowing for quicker and more streamlined procurement. The distinction between selection of tenderers and award of the contract which is often a source of errors and misunderstandings has been made more flexible, allowing contracting entities to decide on the most practical sequencing by examining award criteria before selection criteria and to take into account the organisation and quality of the staff assigned to performing the contract as an award criterion.
The procedure for exemption of contracts awarded in sufficiently competitive markets (the current “Article 30 decisions”) has been simplified and streamlined. A number of exemptions, in particular the intra-group and joint venture exemptions which are important in practice have also been reviewed and clarified.
The modification of contracts during their term has become an increasingly relevant and problematic issue for practitioners. A specific provision on modification of contracts takes up the basic solutions developed by case-law and provides a pragmatic solution for dealing with unforeseen circumstances requiring an adaption of a public contract during its term.
The proposed Directive is based on enabling approach providing contracting entities with the instruments needed to contribute to the achievement of the Europe 2020 strategic goals by using their purchasing power to procure goods and services that foster innovation, respect the environment and combat climate change while improving employment, public health and social conditions.
Life-cycle costing: The proposal gives purchasers the possibility to base their award decisions on life-cycle costs of the products, services or works to be purchased. The life cycle covers all stages of the existence of a product or works or provision of a service, from raw material acquisition or generation of resources until disposal, clearance and finalisation. The costs to be taken into account do not only include direct monetary expenses, but also external environmental costs if they can be monetised and verified. Where a common European Union methodology for the calculation of life-cycle costs has been developed, contracting entities are obliged to make use of it.
Production process: Contracting entities may refer to all factors directly linked to the production process in the technical specifications and in the award criteria, as long as they refer to aspects of the production process which are closely related to the specific production or provision of the good or service purchased. This excludes requirements that are not related to the process of producing the products, works or services covered by the procurement, such as a general corporate social responsibility requirement covering the whole operation of the contractor.
Labels: Contracting entities may require that works, supplies or services bear specific labels certifying environmental, social or other characteristics, provided that they accept also equivalent labels. This applies for instance to European or (multi-)national eco-labels or labels certifying that a product is free of child-labour. The certification schemes in question must concern characteristics linked to the subject-matter of the contract and be drawn up on the basis of scientific information, established in an open and transparent procedure and accessible to all interested parties.
Sanctioning violations of mandatory social, labour or environmental law: Under the proposed Directive, a contracting entity can exclude economic operators from the procedure, if it identifies infringements of obligations established by Union legislation in the field of social, labour or environmental law or of international labour law provisions. Moreover, contracting entities will be obliged to reject tenders if they have established that they are abnormally low because of violations of Union legislation in the field of social, labour or environmental law.
Social services: The evaluation on the impact and effectiveness of EU public procurement legislation has shown that social, health and education services have specific characteristics which make them inappropriate for the application of the regular procedures for the award of public service contracts. Those services are typically provided within a specific context that varies widely between Member States due to different administrative, organisational and cultural circumstances. The services have, by their very nature, only a very limited cross-border dimension. Member States should therefore have large discretion to organise the choice of service providers. The proposal takes account of this by providing a specific regime for contracts for those services, with a higher threshold of EUR 1 000 000 and imposing only the respect of basic principles of transparency and equal treatment. A quantitative analysis of the values of contracts for the relevant services awarded to economic operators from abroad has shown that contracts below this value have typically no cross-border interest in the particular context of procurement in the utilities' sectors.
Innovation: Research and innovation play a central role in the Europe 2020 strategy for smart, sustainable and inclusive growth. Purchasers should be enabled to buy innovative products and services promoting future growth and improving efficiency and quality of public services. The proposal provides for this purpose the innovation partnership, a new special procedure for the development and subsequent purchase of new, innovative products, works and services, provided they can be delivered to agreed performance levels and costs. In addition, the proposal improves and simplifies the competitive dialogue procedure and facilitates cross-border joint procurement which is an important instrument for innovative purchasing.
Small and medium-sized enterprises (SMEs) have a huge potential for job creation, growth and innovation. Easy access to procurement markets can help them unlock this potential while allowing contracting entities to broaden their supplier base, with positive effects of higher competition for public contracts. In order to make public contracts as accessible as possible to SMEs, the European Commission published in 2008 the “European Code of Best Practices facilitating access by SMEs to public procurement contracts”[11]. The proposal builds on this work and provides concrete measures to remove barriers for market access by SMEs.
Simplification of information obligations: It is therefore foreseen that contracting entities may apply the selection criteria provided for in the proposed Directive on public procurement and that, where they do, they are then obliged to apply the provisions concerning notably the ceiling to requirements on minimum turnover as well as the provisions on in particular self-certification.
Better access to framework agreements: Under the current Directives, there is no limitation to the duration of framework agreements concluded in the utilities sectors. This can lead to market foreclosure. The proposal limits the duration to four years (except in duly justified circumstances), improving access to business opportunities and enhancing competition, also to the benefit of SMEs.
Direct payment of subcontractors: In addition, Member State can provide that subcontractors may request for direct payment by the contracting entity of supplies, works and services provided to the main contractor in the context of the contract performance. This offers subcontractors which are often SMEs an efficient way of protecting their interest in being paid.
The financial interests at stake and the interaction between the public and the private sector make procurement a risk area for unsound business practices such as conflict of interest, favouritism and corruption. The proposal improves the existing safeguards against such risks and provides for additional protection.
Conflicts of interest: The proposal contains a specific provision on conflicts of interest covering actual, potential or perceived conflict of interest situations affecting staff members of the contracting authority or of procurement service providers intervening in the procedure and members of the contracting authority's management who may influence the outcome of a procurement procedure even if they are not formally involved in it. Given the differences in the decision-making processes of respectively contracting authorities and undertakings, it is appropriate to limit such provisions to procurement carried out by the former.
Illicit conduct: The proposal contains a specific provision against illicit behaviour by candidates and tenderers, such as attempts to improperly influence the decision-making process or entering into agreements with other participants to manipulate the outcome of the procedure have to be excluded from the procedure. Such illicit activities violate basic principles of European Union law and can result in serious distortions of competition.
Unfair advantages: Market consultations are a useful instrument for contracting entities to obtain information on the structure, capability and capacity of a market while at the same time informing market actors on purchasers’ procurement projects and requirements. However, preliminary contacts with market participants must not result in unfair advantages and distortions of competitions. The proposal contains therefore a specific provision on safeguards against undue preference in favour of participants who have advised the contracting entity or have been involved in the preparation of the procedure.
National oversight bodies: The evaluation has shown that not all Member States are consistently and systematically monitoring the implementation and functioning of the procurement rules. This compromises the efficient and uniform application of European Union law. The proposal provides therefore that Member States designate a single national authority in charge of monitoring, implementation and control of procurement law. Only a single body with overarching tasks will ensure an overview of main implementation difficulties and will be able to suggest appropriate remedies to more structural problems. It will be in the position to provide immediate feedback on the functioning of the policy and the potential weaknesses in national legislation and practice, thus contributing to the quick identification of solutions and the improvement of the procurement procedures.
Knowledge centres: In many cases, contracting entities do not have the internal expertise to deal with complex procurement projects. Appropriate and independent professional support by administrative structures could considerably improve procurement outcomes by expanding the knowledge base and the professionalism of public procurers and delivering assistance to businesses, notably SMEs. The proposal obliges therefore Member States to provide support structures offering legal and economic advice, guidance, training and assistance in preparing and conducting procurement procedures. Support structures or mechanisms exist already at national level, although organised in very different manners and covering different areas of interest for contracting authorities and contracting entities. Member states will therefore be able to use those mechanisms, build on their expertise and promote their services as an appropriate and modern tool capable to provide appropriate support to contracting authorities, contracting entities and economic operators. To reinforce the fight against corruption and favouritism, contracting authorities will be obliged to transmit the text of concluded contracts to the oversight body, which will thus be able to scrutinize these contracts for suspicious patterns, and give access to these documents to interested persons to the extent that legitimate public or private interests are not jeopardized. Because of the evident problems of protecting legitimate commercial interests and avoid distoriton of competition, this obligation should not be extended to undertakings (public or private) operating in these sectors. Furthermore, the creation of disproportionate administrative burden must be avoided; the obligation to transmit the full text of concluded contracts should therefore remain limited to relatively high value contracts. The thresholds proposed would strike the right balance between increasing administrative burden and ensuring greater transparency: with a threshold of 1 000 000 EUR for supplies and services, and of 10 000 000 EUR, this obligation would apply to 10 - 20 % of all procurement published in the Official Journal.
It is not foreseen that requirements concerning oversight bodies and knowledge centres will generate overall an additional financial burden for Member States. If some costs are expected to re-organise or fine tune the activities of existing mechanisms and structures, they will be neutralised by a reduction of litigation costs (both for contracting entities and business), costs related to delays in the attribution of contracts, due to misapplication of public procurement rules or to the bad preparation of the procurement procedures, as well as costs related to the fact that advice to contracting entities is currently provided in a fragmented and inefficient manner.
Administrative cooperation: The proposal provides also for effective cooperation allowing national oversight bodies to share information and best practices and to cooperate through the Internal Market Information System (IMI).