Reform of EU Public Procurement Law: Intergovernmental or Supranational Policy-making? (original) (raw)

2018, SSRN Electronic Journal

In 2014 three new procurement directives were adopted at European level, replacing the previous generation of directives from 2004. These directives regulate how approximately €2 trillion of public and semi-public money is spent in the member states, aiming to ensure the free movement of goods and services and competition in the award of public contracts. Environmental and social provisions figure prominently in the 2014 directives, including a number of new rules which must be implemented at national level. The 2014 directives embody the concept of a social market economy as set out in the Lisbon Treaty, and represent an increase in EU integration in the public procurement field. This thesis analyses the role of the European Commission, Council, Parliament and Court of Justice during the reform process, as well as the policy preferences of France, Germany, the UK and civil society groups. It asks whether the EU institutions acted as supranational policy entrepreneurs or as agents of the member states in introducing the new social and environmental provisions, testing hypotheses derived from two competing theories of integration. It draws conclusions about the nature and causes of European integration in this field, and develops the concept of trusteeship in relation to the Court of Justice and European Parliament as a means of understanding democratic governance in the EU. Many debts were incurred in the course of researching this thesis. I would like to thank my interview subjects Malcolm Harbour, Marc Tarabella, Ronan O'Reilly, Panayotis Stamatopoulos and Olivier Moreau for providing first-hand insight into the gestation of the procurement directives and bringing their respective milieus to life. My research also benefitted from documents released under information requests facilitated by the AsktheEU and FragdenStaat websites, and I would like to thank the creators of these sites. Work on this thesis was undertaken over a period of five years amongst many other projects, and I am grateful for the patience and support of my clients, friends and family during this time. My greatest debts are to Dermot Hodson and Deborah Mabbett, my first and second thesis supervisors at the Birkbeck Politics Department. Deborah supported my research at an early stage and pointed me towards a rich literature on the social market economy which helped to situate my topic within broader political debates. Dermot guided me towards integration theory and provided valuable advice at each critical juncture as the project took shapefinding ways to help me sharpen my focus despite my sometimes stubborn desire to plough a particular barren furrow. Their help, and that of the other staff and students at the Politics Department is gratefully acknowledged. 1 Directive 2014/23/EU of the European Parliament and of the Council on the award of concession contracts (the Concessions Directive); Directive 2014/24/EU of the European Parliament and of the Council on public procurement and repealing Directive 2004/18/EC (the Public Sector Directive); and Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sector and repealing Directive 2004/17/EC (the Utilities Directive). 2 The terms 'neofunctionalism' and 'intergovernmentalism' denote the two main strands of theory regarding EU integration. Chapter one distinguishes the more recent incarnations of these theories in supranationalism and new intergovernmentalism from the classic versions put forward by Haas and Hoffmann. 3 European Commission (2016) Public Procurement Indicators 2015. Only around a quarter of the €2 trillion figure is fully covered by the EU directives-many contracts fall below the relevant thresholds or are excluded for other reasons. 8 European Commission, COM (89) 400 final Public procurement: Regional and social aspects. In Case C-228/98 Nord-Pas-de-Calais the Commission challenged the use of award criteria targeting unemployment in the French region (see discussion in Chapter 4). The Commission also issued a reasoned opinion against Austria in 1997 concerning the application of environmental criteria in a contract for the purchase of lorries. 9 Case C-513/99 Concordia Bus Finland v Helsingin kaupunki and HKL-Bussiliikenne (Concordia) 10 These policies were set out in COM (2008) 400 Public procurement for a better environment 11 This more restrictive position is evident in the Commission's 2010 Buying Social guidance. 12 The four cases comprising the Laval quartet (discussed in Chapter 4): Case C-341/05, Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet et al (Laval); Case C-438/05 International Transport Workers' Federation, Finnish Seamen's Union v Viking Line ABP et al (Viking); Case C-319/06, Commission v Luxembourg; and Case C-346/06 Dirk Rüffert v Land Niedersachsen (Rüffert). 13 This term incorporates both green public procurement (GPP) and socially responsible public procurement (SRPP). The European Commission's support policy is primarily limited to GPP, as discussed in Chapter 3. 14 It is important to note that the decision about whether to outsource a service remains outside of the scope of EU law. However, where a decision is taken to award a contract or concession, the directives will apply if the value exceeds the relevant monetary threshold and if there is no exemption based on the subject-matter. 15 The first utilities sector directive, covering the water, energy, transport and telecommunications sectors, was adopted in 1992 (Directive 92/13/EEC). Directive 2004/17/EC added postal services to the scope of the utilities regime but removed telecommunications, on the grounds that this sector was subject to adequate competition. 16 For example, requirements relating to training and apprenticeships on local works contracts have aimed to combat unemployment and skills shortages in the UK, France and Germany amongst other jurisdictions. 17 For an overview of the response, see Bücker and Warneck (2010). 18 For discussion of the reasons for and nature of non-compliance see Gelderman, Ghijsen and Schoonen (2010) 19 These cases are unfortunately not grouped under a single classification in the Court's database. The figure of 500 is based on the author's own compilation of cases concerning procurement (including by EU institutions). 20 Court of Justice of the European Union, Annual Report for 2017 and previous years. 21 Case C-324/98 Telaustria Verlags GmbH and Telefonadress GmbH v Telekom Austria and Herold Business Data AG. The Court's approach in this case was foreshadowed to some extent in Case C-3/88 Commission v Italy ('Re: Data Processing Contracts') and was further developed in C-231/03 Consorzio Aziende Metano (Coname) v Cingia de' Botti and C-458/03 Parking Brixen GmbH v Gemeinde Brixen and Stadtwerke Brixen AG. 22 Case 8/74 Procureur du Roi v Dassonville. 23 Joined Cases C-267 and C-268/91 Keck and Mithouard [1993] ECR I-6097. 24 In the recent case C-486/17 Olympus Italia, the Court did hold that cross-border interest could not be merely hypothetical, with the burden of proof to establish this resting on the complainant. 25 Case T-258/06 Germany v Commission. See discussion in Chapter 4 of this case. 77 Moravscik (1999) describes informal agenda-setting as a process in which "the entrepreneur launches a discussion by highlighting problems, advancing workable proposals, underscoring potential material benefits, or linking the outcome to symbolic values" (p 272) 78 The remainder arise from international agreements; amendments to existing legislation; responses to specific requests from other Community institutions, member states or private actors; or from areas in which the Commission enjoys no discretion in exercising its right of initiative. 79 The Right2Water initiative, discussed in Chapter 5, was the first ECI to meet the Lisbon Treaty requirements. 129 This policy is set out in European Commission (2010b) 130 European Commission (2011a) 131 European Commission (2011d), at p 3 132 Ibid, pg. 4.