1. DG for Internal Market, Industry, Entrepreneurship and SMEs
Procurement practices in the EU GPA : Opportunities for Chinese State Owned Enterprises
Jean-Yves Muylle
European Commission
DG for Internal Market, Industry, Entrepreneurship and SMEs
Beijing, 25 October 2016

2. Government procurement – the EU experience
Only 1 procurement market (28 Member States)
One set of rules - Harmonised legal framework (above thresholds procurement)
All inclusive (Central, sub central, utilities)
Core principles: transparency, non-discrimination, competition
Low Administrative burden (SMEs)
End-to-end Electronic Procurement

3. Structure of the EU PP markets (1) : goods and services
The EU markets combine goods and services (including construction services)
Goods :all types of goods ( defence –related goods being subject to a specific regime under directive 2009/81/EC)
Services : all services but with different award procedures depending on the cross-border interest (light regime or exclusion)
Overall, the services market is bigger than the goods market

4. Structure of the EU PP markets (2) : procuring entities
The EU PP markets are made of different layers of procuring entities
Central government entities of the EU / Member States ( Annex I under the GPA)
Regional and local public authorities plus bodies governed by public law such as universities, schools and hospitals ( Annex II under the GPA)
Public undertakings operating in the field of utilities (Annex III under GPA)

5. Breakdown by Procuring Entities (2012 €bn)
Central Government 75
Regional and Local 166
Utilities

6. Entities in the public sector
Contracting authorities: (2004/18/EC (2014/24/EU))
State, regional or local authorities
The concept of “state” to be interpreted widely.
Body governed by public law
(created for general interest, not commercial/industrial character, influence of public sphere)
Associations formed by one or several of such authorities or one or several of such bodies governed by public law.

7. Entities in the utilities sector
Contracting entities: (2004/17/EC (2014/25/EU))
Contracting entities: Contracting authorities within the meaning of the directive in the public sector;
Public undertakings and
Private entities enjoying special or exclusive rights
12/11/2018

8. Thresholds- General levels

9. The procedure - first step : Publication
Compulsory except for negotiated procedure without publication/limited tendering without prior publication
Contract notice published on the Official Journal of the EU
Uniform content : standard forms
All notices available on TED (Tender Electronic Daily
Notices are published in the original language: a summary in all the other official languages of the EU is made available on TED
At the national level, notices may not be published before the date on which they are sent to the COM.
In any case, they shall not contain info than the other information contained in the notice sent to COM
Notice shall be sent to COM/
- either by electronic means: published no later than five days after they are sent to COM
- by other means: will be published no later than 12 days after they are sent
See copy of a standardized contract notice as well as an example of a contract notice for a supplies contract

10. TED: online access to EU procurement – opportunities offered
All calls for tenders made available free of charge for registered users (over )
Around 1,500 public procurement notices published daily
24 official languages
All procurement opportunities above fixed thresholds, from all EU Member States (information and award notices)
Also opportunities below fixed thresholds
Notices are published in the original language: a summary in all the other official languages of the EU is made available on TED
At the national level, notices may not be published before the date on which they are sent to the COM.
In any case, they shall not contain info than the other information contained in the notice sent to COM
Notice shall be sent to COM/
- either by electronic means: published no later than five days after they are sent to COM
- by other means: will be published no later than 12 days after they are sent
See copy of a standardized contract notice as well as an example of a contract notice for a supplies contract

11. Publication facts

12. Statistic facts 180,000 contracts notices/year
400 billion EUR of contract opportunities/year
52,000 unique visitors per day
average of 1,5 million page views per day
7 minutes permanence per visitor
17 pages average per visitor
TED is the most visited website of the Publications Office

13. What has to be published
Notices from the Public Procurement Network* countries
Public works, supplies and services
Utilities contracts (water, energy, transport and telecommunications sectors)
Notices from the EU institutions, agencies and other bodies
Call for expression of interest
Annual list of contractors
Projects financed by
European Investment Bank
European Investment Fund
European Central Bank
European Bank for Reconstruction and Development
External Aid and European Development Fund (ACP countries)
________________
*EU member states, candidate countries, EEA countries, and Switzerland

14. Business Opportunities
Figures

15. Search criteria
Can search for documents with three different approaches for processing queries to return search results:
quick search
standard search
expert search.

16. 12/11/2018

17. 12/11/2018

18. The PP procedure - second step: selection of suppliers
What purpose ?
They are meant to assess the technical, economical
and financial standing of the supplier
How ?
All criteria must be non discriminatory, proportionate
and relate to the subject matter of the contract
Where ?
Open procedure: either in the contract notice or in the tender
documentation
Restricted procedure or competitive procedure with
negotiations: in the contract notice

19. Main award procedures:
Open procedure: any supplier can submit a tender
Negotiated procedure with or without prior publication: (GPA: Limited tendering) only under specific conditions
Restricted procedure: (GPA: Selective tendering)
two stages procedure whereby only qualified suppliers can submit a tender
Open tendering: any supplier can submit a tender
Selective tendering: two stage procedure
First stage: further to the publication of a notice, interested suppliers send a request to participate and only those who fulfill the conditions to participate will be invited to send a tender
Limited tendering: two cases
With publication of a notice: in the case of works contracts which are performed only for the purpose of research, testing and development and not with the aim of ensuring profitability or recovering R&D costs
Negotiation should be conducted ensuring equal treatment of the suppliers. No info given to only one supplier; compliance with the info given in the notice
Without publication: in the case of technical captivity; the contract can only be awarded to one specific supplier

20. Technical specifications: main principles
Transparency and openness of tenders to competition which requires that technical specifications be drafted so as to afford equal access for tenderers
Equal treatment of tenderers and non discrimination which means that technical specifications should not discriminate either directly or indirectly against tenderers

21. The EU procurement market – Opportunities for Chinese SOEs

22. Benefits for China Access to world biggest markets
Guaranteed access to world biggest procurement markets
Major business opportunities for Chinese companies – new sources of exports and growth
Legal certainty/procedural guarantees/remedies

23. EU coverage by GPA annexes (in billion EUR)

24. EU GPA coverage by type of purchase (in billion EUR)

25. Utility sectors covered by the EU GPA schedule (in million EUR)

26. EU procurement by product (in billion EUR)

27. EU procurement by product and Chinese exports (in billion EUR)

28. Railways - Average Contract Value

29. Overview of EU Railway Equipment Market

30. SOEs/Utilities coverage in GPA EU Annex 3-- Examples
Société wallonne des Eaux (SWDE) : the undertaking producing and distributing drinking water in Belgium :
procurement in connection with the activity of providing or operating its water network is covered
Électricité de France (EDF):
Procurement for electricity generation and distribution; power plant design, construction and dismantling
Deutsche Bahn AG , a German transport company:
activities of the bus and rail companies run by Arriva related to the provision or operation of bus or rail networks / the logistics arm of DB (provision or operation of networks for transport of rail freight)
SEA: entity managing airport Milan (Italy)
procurement which is in connection with the activity of operating airports

31. Benefits for China Economic benefits
Economic efficiency and savings for contracting authorities
More transparency
More competition
Simplified regulatory framework and reduction of the administrative burden
Greener and more innovative procurement

32. Benefits of Efficiency/Savings
Savings generated by the open and transparent procurement can amount to 5% of the total contracts value
EU: savings or higher public investment opportunities of over €20 billion EUR (RMB 136 billion)
EU: all public procurement, gains up to 0.5% GDP.

33. Criteria to define SOEs
GPA:
concept of control or influence over entity
Criteria common to GPA Parties
Indicative – not cumulative

34. Criteria to define SOEs
Ownership by government or public bodies
majority of the entity's capital held by government, more than 50% or
minority shareholding that gives control ( for ex. minority shareholding in case of dispersion of shares)

35. Criteria to define SOEs
Government appointment of members of boards by government:
members of the entity's board of directors
or entity's management (for ex. the appointment of general managers) or
the entity's board of supervisors
Participation in direct management (activities)
management of the company (main decisions relating to the entity business or activity)
or in its business decisions or operations (example: setting of the price of goods/services to be sold by the entity)

36. Criteria to define SOEs
Dependence on government
Financial contribution
Financial dependence: (for example continuous subsidies or preferential access to land, or to raw material).
Commercial dependence: (the government purchases the whole of the entity's goods or services).

37. Conclusion
Major opportunities offered by GPA accession (win-win)
But access will be on reciprocal basis
In line with China going global.
Thank you