Public procurement and Infrastructure implementation risk management 8 July 2019, Villa Mondragone Katharina Knapton-Vierlich, Head of Unit (acting) Public procurement strategy Directorate - General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission

Facts and Figures 50% of the ESIF 2014-2020 120 billion EUR is spent via PP 14 % of EU GDP 2014-2020 120 billion EUR PP is a strategic area for policy makers. not just an administrative process, but an opportunity to deliver value for public money (14% of GDP!). A partnership to improve the PP in practice. Beyond 2014 legal reform, improvement needs smart implementation of the new rules. The Commission is ready to play its part. We will develop a range of support tools, (guidelines, best practices) for authorities. 6 PRIORITIES : 1. Wider uptake of strategic procurement 55% of tenders use lowest price only Boost green, social and innovative procurement through guidance and best practices Support for strategic sectors (IT, health, construction)   2. Professionalising public buyers Encourage Member States to develop professionalisation strategies Ensure buyers have the needed skills and competences Provide necessary tools and support 3. Increase access to procurement markets SMEs win only 45% of contracts Make PP more atttractive for companies, also Xborder Open international procurement markets (IPI!) 4. Improving transparency, integrity, data Enable reporting of corruption protecting whistleblowers against retaliation More and better data, setting-up contract registers 5. Boosting the digital transformation of PP Legal obligation in October 2018, but real benefits if all steps of PP process are digitalised Roll-out of eProcurement is slow Continue to provide technical & financial support to MS 6. Cooperating to procure together Only 11% of procedures through cooperative PP More cooperation leads to better outcomes Joint procurement by multiple MS facilitated

Facts and Figures • many large-scale infrastructure projects not executed according to the plan; • budgets are frequently not respected and overspent; • planning and implementation often take considerably longer than initially foreseen.

Facts and Figures In our view, most overruns are foreseeable and avoidable. Many of the problems appear due to a lack of forward-looking risk management in all stages of the value chain and throughout the life cycle of a project.

General challenges in project preparation Member States’ capacity and staff constraints Ensure and retain financing Complexity of preparing the projects Feasibility studies, ex-ante evaluation, impact assessment, socio-economic analysis, cost-benefit analysis Obtaining permits, environmental, building etc. Stakeholders engagement and transparency of the process

Specific procurement risks Coordination with other planning stages Choice of procurement procedure Administrative capacity Review of procedures

A partnership with Member States European Commission initiatives Professionalisation of public procurement Advisory hub for large infrastructure projects Guidance on public procurement to help administrations and beneficiaries make the most out of EU investments More use of existing EU-level support: EPEC, TAIEX Peer2Peer, specific training on PP for ESIF authorities

A dedicated advisory hub: The voluntary ex ante assessment mechanism for large infrastructure projects What? A helpdesk, to clarify issues before the project is mature enough to be notifiable under the mechanism. A VOLUNTARY ex ante notification mechanism intended to give comfort to the promoters, once the project is mature enough, that their procurement procedures are in line with the EU rules. an information exchange mechanism to learn from each other's experience with large infrastructure projects. Projects with high importance for a Member State or the internal market: 250 million for the helpdesk, and 500 million for the notification. Sectors: mainly in transport, energy, non-residential constructions and ICT.

infrastructure advisory hub

• the importance of having a strong project management team with experienced procurement experts and advisors in place cannot be overstated; • the project management team and its advisors should take great care in developing a detailed procurement plan, selecting the appropriate tender procedure(s), and drafting proper tender documents and draft contract(s) prior to the formal start of the procurement procedures; Any unresolved issues before launching public procurement procedures generate subsequent delays, due to requests for clarifications by the tenderers, the need to publish amendments, difficulties in the evaluation of the tenders, potential complaints, problematic contract management, etc.

Q&A