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By | OUT-LAW.COM 2nd February 2011 08:00

EC consults on procurement law overhaul

More transparency, more smaller companies

The European Commission plans to change the way that public procurement in the EU works, aiming to reform rules so that the process becomes easier and more transparent. It aims to encourage more smaller companies to participate, it said.

EU rules govern the way that all public contracts above a certain amount are conducted in a bid to ensure fair competition, transparency and equality of access to public contracts.

The Commission said in a statement that it wanted to make procedures simpler and more flexible in a bid to ensure that small companies have more access to funds. It has launched a consultation on proposals to reform procurement laws.

It said that a procurement policy that worked well was particularly vital in a recession because public procurement spending represents 17 per cent of the EU's GDP.

"Putting this 17 per cent to the best possible use is essential for re-launching our economy and creating jobs, even more so in a period of crisis," said a Commission statement. "Stakeholders have voiced demands for a review of the EU public procurement system to streamline its procedures and better adapt them to new challenges."

"We need to clarify public procurement rules to make life easier for both public authorities and companies bidding for contracts in Europe," said Internal Market and Services Commissioner Michel Barnier.

"Access of smaller companies to procurement markets, reducing red tape, or promoting European cross-border procurement will be under the spotlight during the consultation. My ambition is also to make sure that public procurement can help job creation, innovation, and protection of the environment."

The consultation will examine how best to balance simplicity and flexibility for smaller regions with the need for accountability and transparency, as well as how red tape can be cut while cross-border activity is promoted.

It will also examine whether procurement laws needed to be stricter to battle corruption and favouritism.

The consultation process is open until 18 April.

See: The consultation

Copyright © 2011, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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