PUBLIC PROCUREMENT SEMINAR FINNISH EXPERIENCE VILNIUS 10.2.2005

27/04/2020 Tarja Aarla / Ministry of Trade and Industry

The Role of the Ministry of Trade and Industry

• overall responsibility for public procurement • responsibility for national legislation • EU –legislation (Advisory Committee on Public Procurement, Council working party on public procurement) • GPA – review and transparency –work in WTO, 133 – committee – WTO - World Trade Organisation – GPA - Government Procurement Agreement • powers to take measures if the legislation is not applied correctly (informal / right of action in the Market Court) • general guidance and training 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

PROPOSALS TO NEW PP LAWS

• • • at the moment “ under the construction” proposals:

The Act on Public Procurement

– classical sector – apply both under and above the EU threshold pp

The Act on the Procurement Procedures of entities operating in the water, energy, transport and postal services sectors

– only pp above the threshold value • Will enter into force probably in the beginning of 2006 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

Other important organizations

The Ministry of Finance

• Economic guidance on public procurement • The Procurement Advisory Board is working up a governmental procurement strategy. The main issues will be: – Government-level management of procurements – Purchasing of services – Actions necessary for introduction of electronic tools • eProcurement priorities

Hansel Ltd - Central Purchasing Body The Public Procurement Advisory Unit

• Has started in the beginning of the year 2004 • Main tasks are giving general advice and spreading information

The Market Court – review body; special court

27/04/2020 Tarja Aarla / Ministry of Trade and Industry

BRIEF HISTORY OF FINNISH PP-RULES

• FIN has been member state of EU from the beginning of 1995 and before that part of EEA since 1992 • PP-directives and the Act on PP has been applied appr. 10 years • Before pp-directives there were o

Statute of state procurement

(at least from the 1960’s) • for supply procurement, when the contracting authority is the state authority o o

Statute of state works procurement Municipals confirmed their own rules

• Basically concerned supplies and works o Rules reminded very much of those of directives; not so detailed • Remedies were normal public sector remedies Tarja Aarla / Ministry of Trade and Industry

The basic principles

• If the contracting entities don’t produce service as their own work, they are obliged to organize competition to buy service outside • Public procurements shall be maiden as advantageous as possible • the award of public contract should base either to the tender most economically advantageous for the contracting authorities or to the lowest price • the existing possibilities of competition shall be taken to advantage in contract procedures • the candidates and tenderers shall be treated an equal and impartial basis • collisions between principles cannot always avoid 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

Stage by stage approach hasn’t been easy

1. Planning 2. Invitation to tender

(defining the subject matter of the contract) and advertising 3. Procurement procedures 4. Receiving and opening the tenders

5. Qualification of tenderers

6. Checking the comparability to the invitation to tender

7. Evaluation of tenders 8. Decision-making

and informing the tenderers 9. Contract award notice 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

Planning helps to make good invitation to tender

• Planning part of PP procedure has not been regulated in PP directives • However the most important part • makes CA to thought i.e. how to produce certain service in future and what it is going to buy – which are necessary parts of service and which are not – is some service better to buy outside – or would it become cheaper to produce it by itself • Helps to formulate good invitations to tender • In Finland court praxis has shown that many of appeal procedures would have been avoided by good planning and drafting good invitation to tender 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

Buying services – a challenge

• Service directive in force not until 1992 • No national legislation either before membership in EC • In Finland lots of services are produced by municipals • Lots of services have began to buy outside • Difficulties to define the subject matter of the contract • Planning and evaluation of own production is important • A good example - Finnish Road Administration – lots of own produce before – started to buy road maintenance services from private enterprises – Remarkable savings by competition 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

Uncertainty - fields which need clarification

• Applicable rules to pp below the EU threshold (C-195/04) • Applicable rules to annex II B secondary services (C-507/03) • Good practice for procurement of services • When direct procurement/ acquisition without competition is possible • Procurements from other contracting authorities and in-house rules • Co-operation between CA:s and private sector 27/04/2020 Tarja Aarla / Ministry of Trade and Industry

EC TREATY AND PUBLIC PROCUREMENT NON DISCRMINATION FREE MOVEMENT OF GOODS PP DIRECTIVES

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goods, services, works

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utility sector

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EC-wide advertisement compulsory

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detailed rules concerning procedures EXCEPTIONS BASIS ON THE TREATY: secret - req. spec. security measures

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defence sector - international rules WORKS CONCESSIONS - EC- wide advertisement compulsory - flexible procedures ANNEX B SECUNDARY SERVICES - technical specifications, contract award notice - no rules concerning procedures PP BELOW THE THRESHOLD THE NATURE OF PP:

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formal pp procedure is not suitable i.e.:

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real estate and buildings - financial services - employment contracts

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very low value

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etc.

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SERVICE CONCESSIONS

Tarja Aarla / Ministry of Trade and Industry

FREE MOVEMENT OF SERVICES FREEDOM OF ESTABLISHMENT KTM Tarja Aarla