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On 24 July 2019 the European Commission issued new guidelines geared towards access of third party nationals and corporations in the EU public procurement area, as part of a package of initiatives aiming to ensure fair competition, high quality and a level playing field in public procurement markets, regardless of origin of bidders.

What are the objectives of the new guidelines

The objective of the Commission’s new guidelines is to facilitate the understanding of some practical aspects of public procurement procedures in the EU, when dealing with third country participation in public tenders and to also promote the implementation of higher social, environmental and other quality standards that are required for EU public procurement procedures.

The Guidance helps Member States identify which third country bidders have secured access to the EU procurement market and aims to raise awareness among contracting authorities of the different instruments in the EU public procurement toolbox such as measures that may be taken in case of abnormally low-priced offers, as well as measures to ensure that third country bidders respect the same quality as EU bidders in areas such as security, labour and environmental standards. This will help public buyers ensure that all bidders, regardless of their origin, are treated equally and that the same rules apply for all.

What are the main provisions of the new guidelines

These guidelines focus on improving substantially the following areas of public procurement:

  • access by foreign bidders;
  • rejecting abnormally low-priced offers;
  • quality-based procurement; and
  • practical assistance from the Commission.

 

The EU public procurement framework is subject to the basic principles of transparency, equal treatment and non-discrimination. Accordingly, the new guidelines are also formulated around these principles, as they focus on improving the enforcement of the rules regarding the participation of foreign bidders and ensuring that high-quality standards are upheld during all stages of the process. While EU-wide publication of tenders promotes increased transparency and protection across the European Union, it is important to establish equality in tender procedures for both EU and non-EU participants. EU bidders may find themselves at a disadvantage, in cases where third country bidders do not adhere to equivalent environmental, social or labour standards or may not be subject to strict state aid rule as in EU. The new guidelines address the need to reformulate the application of the public procurement rules in order to ensure uniformity in the standards and requirements imposed on bot EU and third-country bidders, thereby eliminating any form of inconsistency in EU tender procedures. Furthermore, the new guidelines establish a new connection between amongst the Commission and the Member States, as they will work together to identify any shortcomings in the current legal framework, or distortions created by third country subsidies or other forms of state-backed financing.   

When will these guidelines be applicable in Cyprus

Τhe Commission has called on the European Parliament and Member States to adopt these new guidelines, as they formulate the new ‘International Procurement Instrument’, before the end of 2019, in order to promote reciprocity and open up procurement opportunities for EU companies in third countries.

Cyprus has yet to implement the Commission’s new guidelines on public procurements. The participation of third country bidders is regulated by Circular TR/CAPP 101, issued by the Treasury of the Republic. The Circular provides a list of countries, whose tenders are accepted in public procurements in Cyprus, which includes:

  • Countries who have signed the Agreement on Government Procurement (GPA);
  • Countries who are part of the European Economic Area (EEA);
  • Countries who have signed Bilateral Agreements with the EU or Cyprus; and
  • Counties who are prospective Member States in the EU.

 

How will business and individuals benefit from these new guidelines

The adoption of the new guidelines in Cyprus would have a number of benefits in the long-term, as it would ensure greater openness of its public procurement market to third country bidders, attracting more participation and increasing healthy competition in its public tenders. Additionally, the adoption of the new guidelines would provide clarification regarding the legal situation for foreign bidders and increased regulatory protection to all bidders, regardless of origin.

As the EU’s procurement market continues to expand, there is an increasing need for an improved legal framework providing important guidance for third country bidders. The new guidelines are good step towards ensuring that standards of higher quality and an equal playing field are applied for all bidders. As such it is imperative for all Member States, Cyprus included, to take all necessary measures and implement these guidelines.

The full text of the guidance on the participation of third country bidders and goods in the EU procurement market can be accessed here.

For more information please visit our website microsite on Competition, Procurement & Regulatory or contact Ms. Christina Christodoulou at This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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