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Weeklog Dennis de Jong: Putting public contracts out to tender

January 29th, 2012 • This week in the European Parliament we will be debating for the first time new European Commission proposals on the tendering of contracts. This might seem a bit of a dull subject, but in fact it will involve every member of a local or regional council. Think for a moment of the fact that the home helps service has been ‘put out to tender’. In practice this meant that organisations providing care of this kind tendered such low bids that home helps lost not only wages but their dignity, while at the same time the quality of care declined. Local authorities could make savings, but at the cost of human dignity. Even under the present European rules this fanatical commitment to this approach to tendering was not compulsory, but the new proposals will make it easier to prioritise decent working conditions and conditions of service for the employees and the quality of care provided, rather than the lowest price. This will give the SP’s local and regional councillors more opportunities to reject plans to base decisions on public services on the lowest price, with no thought for human dignity.

Dennis de JongThe tendering rules adopted in the past by Brussels were designed to give all suppliers a fair chance. They were a good means of combatting corruption and nepotism in the distribution of state, regional and local authority contracts. The situation in eastern and southern Europe shows that this was hardly a luxury, as such contracts are in those regions often handed to ‘best friends’ rather than the best suppliers. In the application of the European legislation, however, things sometimes tended to go awry: authorities generated too much paperwork and too many complaints from small businesses over both the bureaucracy involved and the bundling of contracts, which meant that smaller firms had little chance of winning a tender. The biggest criticism from the SP, however, was that the public authorities seemed to have little remaining power over policy. If a council, for example, made social or environmental demands on contractors, this was all too readily seen as a way of favouring certain firms.

In practice local, regional and national governments have exaggerated the problem, which is why former SP leader Agnes Kant proposed three parliamentary bills designed to ensure that home help services could be required to meet conditions related to social policy and the quality of care. These have already been accepted by the main legislative body within our national Parliament and will shortly be considered by the Senate. Under the existing rules, moreover, more is possible than the government says, and such conditions can in fact be imposed, while small contracts can be awarded without an enormous amount of paperwork. SP local and regional councillors should not, therefore, swallow the tale that overly bureaucratic procedures are imposed by Brussels.

Under the Commission’s new proposals the level at which social services must be put out to tender would be raised from €200,000 to €500,000. In addition, large contracts need not be subject to the the full, difficult tendering procedure. Instead, you can invite the different suppliers to a meeting and run through the authority’s demands with them, provided you simply make it clear that a contract is to be offered and after the event publish the name of the successful bidder. The European Commission will examine this procedure only for transparency and non-discrimination, but will not interfere with the quality-based conditions. It will be the end of the year before the European Parliament has dealt with the proposals, but it is clear that the misuse of the tendering procedure in order to impose Brussels’ neoliberal policies will no longer be obligatory, which will give the SP’s representatives something to work with.

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