Volume 16, Number 4, Winter 2016

REGULAR ARTICLES

Antifragilizing Public Procurement Systems: A Paradigm Shift ….................................   419
Y. G. Saad
 
                                                                                           SYMPOSIUM
Symposium on European Union Public Procurement ….….….….….................................   454
K. V. Thai, R. A. Suryo and T. Mai
 
Symposium Introduction ….….….….….…….….….….….…….….….….….................................  455
K. V. Thai, R. A. Suryo and T. Mai
 
From Whence the Knowledge Came: Heterogeneity of Innovation Procurement
across Europe ….….….….….…….….….….….…….….…….....................................................   463
A. Rainville
 
Dealing with Legal Loopholes and Uncertainties within EU Public Procurement Law
Regarding Framework Agreements .….…….….…............................................................   505
M. Andrecka
 
Disclosure Rules in EU Public Procurement: Balancing between Competition and
Transparency ….….….…….….….….….…….….….….….........................................................   528
K.-M. Halonen
 
The Role of Firms’ Qualification in Public Contracts Execution: An Empirical
Assessment ….….….…….….….….….…….….….….….……....................................................   554
A. Ancarani, C. Guccio and I. Rizzo
 

Taints of corruption in public procurement (PP) exist in both developed and developing countries alike- though in different scales and with different characteristics and impacts. Attempts to achieve a taint-free procurement regulation have failed even in the most robust and mature jurisdictions due to an inherent complexity and difficulty given the paradigms used. PP systems today remain fragile to various shocks2 coming mainly from markets and corruption. This paper proposes a paradigm shift in the way in which a PP System (PPS) should be designed and practiced rendering it as “antifragile”3 as possible to benefit from shocks, stresses and disorder. Antifragile PPS design revolutionizes not only the regulations but also the frameworks and institutional setups and the whole practice of the public procurement profession in a manner that permits growth and evolution at times of stress or distress. This paradigm shift is based on a design of the PPS as a complex system.

Provision on framework agreements has been introduced into European Union (EU) Law in 2004. Since then framework agreements have gained popularity and importance on the European Union (EU) public tender market. Nevertheless, the use of frameworks poses significant legal challenges necessitating the clarification of the governing rules and the introduction of further guidelines. Unfortunately, clarifications were not fully provided in the new Directive 2014/24/EU. This article is a study of legal loopholes and uncertainties that occur during public procurement of framework agreements as a result of current EU rules and national practices in Denmark and the United Kingdom. The article highlights the need for clarification of the existing rules and introduction of transparency to the subsequent call-off stage of framework agreements. To achieve study aims, three methods were applied: a doctrinal analysis, a small scale comparative law research and field research based on qualitative research by the means of semi-structured interviews.

The EU was created in the aftermath of the Second World War. To foster economic cooperation, an idea being that countries that trade with one another become economically interdependent and so more likely to avoid conflict, the European Economic Community (EEC), created in 1958, and initially to increase economic cooperation between six countries: Belgium, Germany, France, Italy, Luxembourg and the Netherlands. Gradually, more countries joined EEC. In 1993, EU was formed, and became a unique economic and political union between 28 European countries that together cover much of the continent. Since then, a huge single market has been created and continued to develop towards its full potential. Indeed, the economy of the European Union generates a GDP of about €14.3 trillion (US$18.5 trillion in 2014), according to the International Monetary Fund.  The theme of this symposium is on public procurement in Europe, with three papers covering the EU’s procurement innovation, and regulations; and one paper on Italian procurement.

The paper examines the disclosure of information within public contract awards under EU law. EU Public Procurement rules have several objectives that may at some times be conflicting with each other. A certain level of transparency of public procurement procedure is necessary in order to fight corruption, enhance trade opportunities and ensure effective legal remedies. On the other hand, too much transparency may have certain anti-competitive effects. The national laws regarding disclosure of information vary in different EU member states. In Finland the EU law principle of effective remedies has been interpreted as requiring full transparency among the bidders. The transparency rules under EU law and certain Member States’ national laws are analysed. As a conclusion, it is suggested that the rules on disclosure should not be left solely to the discretion of member states as the over-transparent approach taken by certain member states may negatively affect the markets both on a national and EU level.

To induce innovation in the public sector, Directive 2014/24/EU encourages internal and external consultation during the procurement process. However, little is known regarding the prominence of these practices. Determining the extent of knowledge sourcing in innovation procurement across 28 European countries, this paper presents an institutional cluster analysis, examining heterogeneity across knowledge sourcing activities, procurement areas, and tender innovation outcomes for 1,505 public procurers from 2008-2010. Building upon existing taxonomies, three types of procuring agencies are identified: Large collaborative agencies practicing public procurement of innovation (31%); supplier-focused pre-commercial procurers (20%); and direct procurers at the municipal level (49%). Validation supports this heterogeneity, using innovation outcomes and policy drivers. At the country level, Spain, the United Kingdom, Italy, Germany and Poland are most represented in respective clusters. Findings enable predictions regarding impacts on agencies and innovation from the new public procurement directive’s translation into national law by Member States.

According to the Italian regulation firms must qualify to bid in auctions for public work contracts worth more than 150,000 euros. In this paper, we investigate the link between the efficiency of infrastructure provision, and the Italian regulation concerning the firm’s entry and qualification system, employing a large dataset on Italian public works contracts for roads and highways. First, firm’s efficiency in public contracts’ execution is estimated using a smoothed data envelopment analysis (DEA) bootstrap procedure. Then, the effects of the qualification system on firm’s efficiency is evaluated using a semi-parametric technique that produces a robust inference for an unknown serial correlation between efficiency scores. Our analysis shows that fully qualified firms perform better than partially qualified firms.

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