Legal Framework and Selected Problems of Public Procurement

University essay from Lunds universitet/Juridiska institutionen

Abstract: The aim of this paper is to investigate certain aspects of the legal relationship between the EC and Switzerland in the field of public procurement. Public procurement can be defined as the purchase of goods, services, works and supplies by public authorities and enterprises. It comes as no surprise that public procurement has major economic ramifications, accounting for around 14% of the EC's and Switzerland's GDP. During the last decade, an enormous increase in legal activity in the field of public procurement could be observed. It commenced with the implementation of six EC-directives, followed by an international agreement, the Government Procurement Act (GPA), based on the regime of the World Trade Union (WTO) and subsequently ratified by both the EC and Switzerland. To comply with the GPA, the former had to amend some of the provisions of its directives. The latter, on the other hand, was forced to enact several laws and decrees, on a Federal as much as on a Cantonal level. Last but not least, the EC and Switzerland ratified a bilateral agreement on certain aspects of public procurement, which entered into force in 2002. In the field of public procurement, the subject of this paper, a complicated legal framework exists. Different legal orders, different state levels, and different traditions are involved: plurinational agreements, based on WTO-law&semic primary and secondary EC-legislation&semic legislation in the Member States&semic Swiss legislation on both the Federal and Cantonal level&semic and bilateral agreements. The plurinational GPA aims at creating a global system of market economies and the liberalisation of international trade. The EC's four material directives strive to overcome trade barriers within its territory. Switzerland's relevant Federal and Cantonal laws primarily aim at transforming the GPA-rules into effective provisions and at the harmonisation of the home market. This picture is completed by the Agreement. Since its entry into force, the legal relationships between the EC and Switzerland are essentially the same as those between the EC and the other EFTA-states. The Agreement is supposed to have a considerable impact on the economy. So far, only 16% of public procurement works, services or supplies are provided transnationally. It contains rules about the extension of the GPA and about public procurement by telecommunications, railway operators along with certain other utilities. There are some additional important procedural provisions. Both the EC and Switzerland must provide non-discriminatory, timely, transparent and effective procedures enabling suppliers or service providers to challenge alleged breaches arising in the context of procurements in which they have, or have had, an interest. It is very likely that they will be considered to be directly invokable, both in the EC and in Switzerland. On the other hand, it is likely that only Switzerland confers on the GPA a direct effect. In the EC, in its Member States, and in Switzerland, there are remedies, which are similar to ordinary administrative proceedings. There is always a standing to sue for the potential contractor, whereas the procurer is capable to be sued. Interim measures are also foreseen, and the court has the power to set aside decisions of the procuring authority and to order the payment of damages. During the last years, there has been, especially in the EC, a remarkable discussion going on about the legality of social and environmental clauses in public procurement matters. Until now, it seems to be settled that they are legal, provided certain criteria are fulfilled. However, it is, more or less completely, obscure to what extent. In conclusion, the relevant case law has to be analysed. At first sight, the legality of social and environmental connotations appears to contradict to the public procurement's main principle of ''best value''. However, their justification might derive from the fact that they are able to create an over-all economic advantage for the contracting authority. A valid social or environmental criterion has, therefore, to be expressly mentioned in all relevant tender documents&semic the advantage has to be closely linked to the product or service which is the subject-matter of the contract&semic the criterion must not confer an unrestricted freedom of choice on the authority&semic the criterion shall comply with all fundamental principles of their respective legal order&semic and that the criteria must be applied objectively and non-discriminatorily. In conclusion, the relationships between the EC and Switzerland are very comprehensive. Each legal order provides an adequate legal protection for undertakings, which take part in any stage of public procurement proceedings. However, it is not always clear to what extent social and environmental clauses may be taken into consideration in public procurement matters.

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