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In this episode, Marta and Willem discuss the rules related to centralised purchasing bodies, their role in public procurement, the national differences that exist in the EU, and their procurement techniques. For dessert, they delve into the question of how to stay up to date in public procurement.
TABLE OF CONTENTS
0:00 Entrée
0:00 Introduction
8:16 Main course
8:16 Centralised Purchasing Bodies
14:17 Example from the Netherlands and the PIANO research
19:04 Teckal exemption and Is the state one contracting authority?
23:59 Examples from the Member States
29:47 How are framework agreements used by CPBs?
35:25 Other procurement techniques
43:10 Dessert
43:10 How do we stay up to date in the field of public procurement law?
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Episode Transcript
Willem Janssen 0:00
Welcome to Bestek, the public procurement podcast. Today, Marta and I are talking about centralised purchasing bodies and how to stay up to date in public procurement law.
About Bestek 0:14
Welcome to Bestek, the public procurement podcast. In this podcast Dr. Willem Janssen and Dr. Marta Andhov discuss public procurement law issues, their love of food, and academic life. In each episode, Willem, Marta and their guests search for answers to intriguing public procurement questions. This is Bestek. Let’s dish up public procurement law.
Willem Janssen 0:39
Hola, Marta.
Marta Andhov 0:41
Hello, Hello.
Willem Janssen 0:42
I thought I’d change it up a little bit. I didn’t get the response I was hoping for, but good to talk to you again. today. Like I announced, we’re talking about centralised purchasing bodies. This is partially sparked because of a project research project, a book[1] project that we’re both involved in, which is an edited volume led by Carina Risvig Harmer, if I’m pronouncing that correctly, you’re the Danish expert in this and Mario Mario Comba. I don’t know, if we have an Italian expert, but anyways they are editing of volume about it, and you have written, or are still writing a chapter about procurement techniques in the particularities for centralised purchasing bodies. I contributed with a national report about the Netherlands and what’s been going on there in terms of aggregated centralised joint procurement. What are we going to do today is just I think, you know, maybe a bit of a teaser to the book, but also to get the discussions going on this topic, also in the remnants of Bestek. We’ll be talking a bit about the Netherlands as an example, add we’ll be looking at some of the procurement techniques of these bodies. How does that sound?
Marta Andhov 2:04
That sounds pretty good. Yeah, I think it’s just interesting to look into the central purchasing bodies also from perspective that they are very present in some member states. Right? It is very much connected, whether you have decentralised or centralised procurement system, in others not so much. So, maybe for some of our listeners that do not have much experience with central purchasing bodies that could be potentially quite interesting.
Willem Janssen 2:29
Yeah, as like a reference point or discussions it also influence the national national debate for sure. To get us going, there’s some articles in the directive that regulate the functioning, I suppose, or the the remit of centralised purchasing bodies. I’m looking at Article 37-39 here.
Marta Andhov 2:53
Yeah, absolutely. So that’s where we can find some information about: – Well, what are those central procurement purchasing bodies? What are the centralist purchasing activities? – Then we have 38 that talks about occasional joint procurements, so it’s something rather ad hoc, right? Did you decide to collaborate together? The third talks about procurement involving contracting authorities from different member states, which is also a little bit kind of Star Trek at this point, right? Because this sort of talks about you having a different if that is centralised purchasing bodies, let’s say in Netherlands and Denmark doing procurement together and procuring together, or more local based contracting authorities, again, collaborating through having this cross borders collaboration, and that of course, brings so much questions and also legal challenges along the way. There’s an interesting study done, I believe, for commission. There was the cross border… It was specifically I think, the Danish central purchasing body ski and the German one and I’m, unfortunately don’t remember the name, but they conducted this type of cross border procurement. I think maybe Austria also was involved. And there is a study, maybe we can see if we can find it, link it in the description. It’s a study that kind of describes how they did that, right? What were potential legal challenges,….
Willem Janssen 4:27
….but it also perhaps spured the development of cross border activity that is happening there.
Marta Andhov 4:33
It was quite strongly criticised, by some of our colleagues; Albert, sort of giving you a bit of a shout out here, I mean, as as someone who really dives into this topics and recognise a lot of the challenges along the way, but I think this is the most complex. I think, on another hand side the ocassional one is maybe more applicable to the decentralised procurement systems. When made more on ad hoc, a particular regional players decide to collaborate together. We can see a lot of regional purchasing collaboration done in the UK and Denmark. There are also some, I think, in other other member states too. Ultimately, what this central purchasing body in the central purchasing activities are? It’s a form of middle agents. I think that’s a way a good way to describe it. So, it is a body that is established and ultimately sets up the frame for procurements and conducts procurements in the name of others, in the name of others understood here as contracting authorities. So, we have the body being the central purchaser and the users of the usually procurement techniques, let’s say such as framework agreements will be then contracting authorities would utilise that. The logic behind it often is to also help out really, and somehow take away the burden of setting procurements and dealing with all those things. I think central purchasing bodies, and their activities also come quite handy in the discussion of real development within procurement and by that I mean, introduction of more and more innovation, technologies, sustainability, all this complex things, because central purchasing bodies, ultimately… it will be a team of people and experts, right? Some of the central purchasing buddies that I had a pleasure to collaborate with over the years will have a team of lawyers and economists and then they will get some engineers and other specialists to come in and help them out set up this huge procurements that then later on a local municipality or kommune or school can ultimately use. So, that’s the broad logic behind central purchasing body.
Willem Janssen 7:06
So, it’s really their core task, right? So, that’s what’s interesting. It is very often the idea is because of the tasks that you’re given under national law, you then turn out to be a contracting authority, and that means that in order to fulfil those tasks, you need to purchase stuff on the market simply said, and that means that you have to abide by the public procurement rules. But that obligation is then moved to the centralised purchasing body, and then just to finish off the the introduction, because this aggregation, like you said, has a lot of benefits, but there’s two types, right? Two types that generally occur, or at least that the directive refers to in terms of what the what the directive says, right? So, you can be an intermediary, or you can even take on a wholesaler role, that you actually purchase on behalf and you have stocks, right? So, that’s generally what the bigger role is. Instead of saying: – Hey, do you want to tag along for this procurement? We’re organising it, you can opt in or opt out perhaps and we set up the procurement, but you’re actually the one signing the contract in the end. –
Marta Andhov 8:16
Also, there’s also at some point, discussion or a certain lack of clarity that has been on the division of task responsibilities, particularly legal responsibilities between contracting authorities and those central purchasing bodies. This unit mainly… If something is done noncompliant who is responsible? Was it the central purchasing body or is the contracting authority? There was a little bit of uncertainty, before the directives that we have right now, because we have a clarification of that saying that ultimately, each of the units is of the organisation is responsible for their part. Right? So if we looked…. let’s use framework agreements, as an example. If we have central purchasing buddy establishing the framework agreements, so everything in context of legal compliance, that is done, the responsibility for that is with a central purchasing body, but let’s say later on a specific aspect of carrying out many competition, awarding the contract under such a framework agreement that will then stay with contracting authorities. In other words, everyone is responsible for what they actually do. Right?
Willem Janssen 9:28
So, that’s a bit of clarification that occurred. Now there’s still a lot of discussions going on about the exact remnants of this article. But in a way, what you see, I think, in much of the the implementation is that it’s very much a copy paste effort, right in terms of what has been implemented. So, if we move on to the Netherlands, right? I think that the Dutch situation of joint procurement is based on one fundamental principle, which M.A.J. Stuijts, a director of one of the most prominent, centralised purchasing bodies, in the Netherlands, co-author of the chapter that I wrote, which what we called is procurement autonomy, really, you get the tasks, and then you’re responsible for purchasing whatever you need to fulfil those tasks as a contracting authority, and whether you then cooperate or not for that need, because you think that’s smart to team up with, with another municipality that’s close in your region, has similar needs, as you do, the populations fairly similar, etc. The choice that you have is free, right? So with the, I would say, approximately 400 to 450 governments that we have or different types of governments. So, assignments, abilities, provinces, water boards, ministries, it’s all up to them to decide if they want to cooperate, and I think that’s one of the first differing aspects of what happens in Europe. In a lot of European countries, you see a difference, or at least between all of them, you see, like this decentralised approach that we have in the Netherlands, like autonomy, or this more of a forceful thing going on, where all contracting authorities have a certain type link up with one centralised body, and their purchases, say through framework agreements are all aggregated, right? So there’s a difference between how obligatory it is.
Marta Andhov 11:38
For sure, and I think that is also the very basis, the fundaments of let’s say, whether you have centralised or join procurements, et cetera, et cetera, whether they are mandatory or not, as you mentioned. The fundamental lies somewhere else, totally done procurement, is something to do with history, with a general structuring of the governance within member states. I also kind of think that maybe it also has something to do with size, I tend to see that there is much more centralization within smaller member states. So, there are different reasons, right, but that also ties us to this two ultimately characteristics on the one hand side defined as benefits in another as disadvantages of aggregator procurement. Ultimately, that is, the subject matter or the substance of the activity of Central purchasing bodies, and that is on the benefit, you get the aggregation you get the benefits of economies of scale, right. In other words, if you buy and bulk, you’re able to get really good deals, you hopefully are able to get bigger discounts, etc, etc. In context of establishing some complex procurements, you have accumulation of this professionalisation within procurement because those units have that, and those are all the beneficial elements on it. As a downside or the challenge, of course, we’re talking about issues of competition law broadly understood, right, closing the markets, excluding from the marketsm small and medium enterprises, the topic of division, then of this huge procurements into lots to accommodate participation of SMEs etc., it is wildly discussed, and the general aspects of competition law saying: – Well, how we ensure that there is good entry to the market for new commerce, etc, etc. – , and finally, the last downside or challenge rather, I should say, it’s also the fact that we are in this space where we all know well, that one size does not fit all and you may have specific different needs as a smaller contracting authority that somehow may be, let’s say, obliged to use some of frameworks or even taps into on voluntary basis to uses them. Then there was a bit of a challenge because all you can use something that is there, but it’s not entirely really fitted to your needs, or you can choose to run with it on your own and create your own procurement, right?
Willem Janssen 14:17
I think that’s also what’s interesting is a really nice research done by Fredo Schotanus, a colleague of mine at Utrecht University, Centre for Public Procurement and he, I think, has this great highway matrix as he calls it, like there’s different types of procurement and how intense they cooperate together. So, you would have a hitchhike model in which you, just every now and then you jump into someone’s car and you tag along and you work together? To carpooling ride, you do that on a regular basis and then you have what they call is the ultimate, and being a great fan of of drive to survive on Netflix about four Formula One, you have this Formula One team models, right? So really intense cooperation, like where you would always work together. What’s interesting is that that’s, like turned into quite a patchwork in the Netherlands of different types of cooperations what we see on the map. So, there’s the Dutch Centre for, or Dutch expertise Centre for Public Procurement PIANO counted 51 types of cooperations, but 51 that are currently there. Ranging from like, shared service centres to complete mergers of back offices. So, broader than just procurement to actually setting up a separate legal entity, right? That would then become responsible for purchasing for, say, a group of municipalities where we see most of it happening on the municipality level. What’s interesting, and that’s data that kind of struck me as well is that say its increased one, structural, local, collaborative procurement, but that data shows that almost 38% of all Dutch citizens were like affected by structural procurement or the outcomes of it, and that almost 64% of all local authorities are involved. So that’s, even though it’s not obligatory Dutch public authorities or at least muncipalities see significant benefits to it, because they’re doing it, right? Even though it’s not obligatory, they are really, really working on it, and then you see that it’s construed in legal personalities, by public law, but also by private law, say foundations. But also, depending on what the purposes are. So, if it’s only knowledge sharing, right, you wouldn’t set up a separate legal entity, if it’s really purchasing together, that becomes more interesting. So, it not being obligatory doesn’t mean that it doesn’t happen. I thought that was an interesting aspect to see. What isn’t happening in the Netherlands is the warehouse option at all. So, or at least I haven’t found any examples of it, and the Dutch legislator in the the the preparatory documents of when they implemented these provisions that you refer to actually seem to have, like, also deterred contracting authorities from it, right? So it’s not been, it’s still allowed, but it kind of refers to yarn, it doesn’t really happen.
Marta Andhov 17:33
It’s like: – If you have to. –
Willem Janssen 17:35
It does not really happen at the moment because there’s a stock risk, right? If you hold stock as a wholesaler, the value of the stock might fluctuate, which then means that, you could run the risk of owning going bankrupt or losing a lot of money, right? Whereas if you just purchased on behalf of others, that risk sticks to the individual contracting authority. So, I thought that was interesting also, because I know, some centralised purchasing bodies in the Netherlands are exploring that option because it could be useful, right? If you have hold stock on behalf of a lot of centralised, a lot of contracting authorities, there are benefits to it. Say if you would need it really quickly. Right? So think of mouthpieces or a ventilators right? It is a very extreme option. Yeah, if that would have been on stock, it could have been distributed a lot more quickly, and are taking the pandemic out, you could do that for pens or tarmac as well. Right. So I think that’s, you know, mixing my Dutch in English, that’s at least an interesting aspect from the Dutch area.
Marta Andhov 18:44
It also sounds, you know, a little bit starting to be connected with your beloved in-house right? So, I think that’s…
Willem Janssen 18:52
…speeding up. Stop interrupting me.
Marta Andhov 18:56
….because I’m like, that’s ultimately I think, where you really want to focus.
Willem Janssen 18:59
One other just now that you mentioned it Marta, only because you mentioned it.
Marta Andhov 19:04
Of course.
Willem Janssen 19:04
Most of these, and I do genuinely think this is interesting, not because I like in-house, is that they were mostly set up, if they were set up in a in a separate legal entity, they were compliant with the technical exemption at the time, and many Dutch authorities haven’t even seen the option of becoming an intermediary or warehouse right. So they still look at it as: – Okay, we can we’re compliant with the technical exemption. – , all the linked up municipalities say they have shares, they have control all the activities are done for for the the the controlling contracting authority. So, we fulfil that exemption instead of having to rely on 37-39 in the Directive 2014/24/EU. So, I think that’s interesting, and as a second in-house issue, because it’s that’s very linked in the Netherlands is the question: – If we aggregate procurement, right, is the state one contracting authority? – So is this the Dutch state as such? Is that actually one contracting authority that purchases on the market? Or actually, are we looking at separate units that are purchasing? And there’s been so much debate in the Netherlands, which has been completely absent in other member states. I know some stuff will happen in Denmark, but this has been a relatively, like, sheltered discussion that we’ve had. I don’t know if hat means that, you know, if we’re totally wrong in the Netherlands, or what else is missing? So yeah, without going too much into that, I think there’s so there’s two in-house angles to it, and I know that in houses also something that was important in Finland, right, they also relied on the tickle exemption quite extensively in this slide.
Marta Andhov 21:05
But this, this patchwork to try to…. I was very interesting to hear, as you mentioned, broadly, the Netherlands approach you could define as this patchwork of things popping up around and over different intensity. Do you think that there is an interest to somehow systematise it or actually there is a certain level of not hesitation, but actually the opposite of now wanting to do that one thing actually to keep it quite decentralised? What is your feeling of the of the market and legislation broadly and I guess, administration, broadly speaking? Are you anyhow, buying into the, you know, aggregation and economy of scale through this or you think that rather more important is the subsidiarity and the discretion left to the contracting authorities?
Willem Janssen 21:58
I understand why we have this system. But I think in a lot of ways, it’s limiting Dutch public procurement to develop on areas where it could be improved. Let’s put it this way. So, on the one hand, I see discussions of when we ask for sustainable solutions, or when we ask for innovation, we need to be more coherent on how we approach the market. So, when one municipality asks this and the other, then ask this market, parties can’t respond to all those different types, right. That hinders the development of sustainable society or same for innovation or social goals, right? So we’ve got this call for standardisation, but then we’ve got a decentralised system, which means that the individual decision making of each procurement is still rests with the contracting authorities, right? So that creates a problem. If you want to create standardisation, I think, more centralization, or more regionalization or level you would take it is actually beneficial if we want to become more uniform as purchasing bodies. So, in a way to answer your question, I don’t see that happening very quickly. I do see that wholesaler option perhaps materialising, but I think we need to broaden the debate and say, Look, if we want more standardisation, why aren’t we looking at centralization? That’s I think, where the Dutch debate is kind of like limited by how we’re structured constitutionaLly.
Marta Andhov 23:30
Can I just ask one more thing that I was wondering? I don’t remember, I read obviously, your chapter, but right now it doesn’t pop in my head. Do you have as the existing central purchasing bodies of a quite general nature, or you have sectoral specific ones? So let’s say specific central purchasing, body focusing, I don’t know on IT, or focusing on medicine or et cetera, et cetera, or they are quite general in nature?
Willem Janssen 23:59
Depending on what the cooperating parties envisioned at the first instance. So it can be quite specific, but most of them do everything. So they take over if say, we have the Formula One model, right. reference that. If we have that, then you would have a full broad scope from healthcare to infrastructure to ICT. So again, that’s a good point that you raise, because that differs as well in the member states. Right? There’s differences there as well. Right? So this is it’s such a economically, culturally, politically, constitutionally and I don’t know how many llys I can make up, like the topic it’s so ingrained in how we operate.
Marta Andhov 24:43
Absolutely. It’s something so much broader than then procurement. Yeah, because the reason why I asked you know, to conclude that is that, I need to say that there is a specific angle to central purchasing or this joint purchasing that I that I’m sort of tangibly being drawn to, and what I mean by that is that if it’s a specific sectoral collaboration, let’s say on IT, or let’s say, on infrastructure, as you mentioned, and medicine and so on, because I think that in context of innovation, or in context, again, of sustainability, if you want to do things on large scales, and if you want to create because I think often when we talk about sustainability, we talk about, well, there needs to be a certain level of demand to let’s say standardise particular green products, right. If there is not enough demand, then you will have, let’s say, organic or clean products. But ultimately, they will be quite expensive. So, I think that I’m quite fond that if you have a particular sectoral collaboration like that, and you can create, on the one hand side, this economy of scale, and on other hand side, you have enough of really professional team to carry out such a complex procurement. I think that the success of that can be quite great and then the outcomes, you know, of establish technical specification, award criteria, good practices, then that can be broadly disseminated to the market and then the smaller contracting authorities can learn from it, right? Then also, because you created this demand, you have, let’s say, now, this market for I don’t know, green cleaning products, or chemicals or whatever, then also the price point hopefully, is not that high, or at least we go in towards the situation when the price point is levelled with a traditional product. The thing is, there is a possibility, you know, of there obviously risks and challenges of such an approach, but I think there are some good opportunities of creating this, this market and doing this procurement in a good way.
Willem Janssen 26:51
So, like, in a nutshell, that links up really well with the recent initiative in the Netherlands, which is supported broadly by all these governments, about buyer groups. And the reason why I didn’t mention it before was because they don’t actually buy together. Right, but they’re cooperating right there. Multiple governments working together, mostly central governments, to in light of these sustainability goals, really think about how will we approach the market? What criteria…
Marta Andhov 27:23
but they do not buy themselves…
Willem Janssen 27:25
….but they don’t actually buy, right? It’s an initial step, right? So, I think that would be really interesting to see what happens there. So, I think what the Netherlands does really well, or at least, that’s maybe not how you phrase it, but starting from this procurement autonomy, it allows them to really procure the way they want to. I think then we’re kind of heading towards the what are the specific techniques? Or is there perhaps a difference in the techniques of centralised purchasing bodies and other other bodies? Perhaps you could add a bit about that?
Marta Andhov 28:02
Yeah, sure. So, while Willem has been with his co author writing the report on Netherlands, we’ve been asked with my dear colleague and friend, Dr. R. Vornicu, to write a chapter on procurement techniques, and specifically how procurement techniques are used by central purchasing bodies, and look into the practice the way how this works with this type of publication is that we ultimately use the national reports, the national chapters, so the one amongst others that Willem co-wrote as source of data, and then we read through all of them and we use them as sources of data to prepare our comparative chapter. In context of techniques, really what came through the chapters that are part of this upcoming publication is that still a very dominant procurement technique? That is there is our framework agreements and that is to say, of course, that some, as you Willem mentioned, in some member states, the central purchasing activities are not very developed or not super popular, but in those ones that there are they predominantly use technique are framework agreements and there are a lot of interesting aspects in that regard.
Willem Janssen 29:29
I saw your smile, by the way, when you said framework agreements. Sorry, but I’m gonna give it back to you.
Marta Andhov 29:35
You were waiting for that.
Willem Janssen 29:36
I was just waiting when you started giving me: mHmm about in-house. I saw you smile when you started talking about framework, but keep going talk about framework.
Marta Andhov 29:47
Yeah. So the way how framework agreements are used by central purchasing bodies difference slightly. There was quite a lot of interesting approaches, with More and more mandatory framework agreements, which is kind of interesting, because it goes back to what you said that within some of those central purchasing activities, you can have a situation in which you’re mandated as a contracting authority to use them, and then automatically, you becoming part, let’s say, oif framework agreement, and that may be mandated. So, across the different member states, what we can see is that there are certain framework agreements that are being established or mandatory, for particular, contracting authorities to use them. That can be for example, central government units, right? So, let’s say you have central purchasing bodies that conduct framework agreements, to which specific users group identify ministry, central central government units, and for those that can be, for example, mandatory, and there are types of such a framework agreements in a Danish system. On the other hand side, you have the type of framework agreements that are being established as mandatory, instead of a bit of hybrid of mandatory and discretionary because the first step is discretionary, which is you can choose to be part of them. You’re not obliged to, but when you choose to be part of them, it’s a type of bias. So, you actually may need to also pay to be part of framework agreement, and then when you decided to be part of them, you also then obliged to use them, and there are, you know, also different levels, I just wanted to highlight that we talking about different levels of obligation, because in my first example, the obligation is between contracting authorities and the central purchasing body, right? Now, in my second example, is that you bid in, so you have a type of obligation towards the central purchasing body, but as a consequence of you as a contracting authority later on, not using, let’s say, that framework agreementm, and the supplier who was a framework agreement, one day realised, let’s say light bulbs, let’s do something simple, and there was one specific supplier, it’s a single supplier framework agreement, they’re supposed to supply those light bulbs for all members of framework agreements that were mandatory when you buy into them. Then that supplier finds out that you actually bought your lightbulbs outside, you establish your own procurement. So, there is also a question here that the supplier on the framework can potentially sue you for not actually obliging within the framework and not buying from him when you committed to that. So, there are lots of interesting aspects of that type, and what is also in context of central purchasing body, which again, talking about, you know, moving to this totally kind of quirky, complex there was discussion of whether you can establish a framework agreement for a framework agreement.
Willem Janssen 33:04
Hmm, yeah. You are going very meta right now.
Marta Andhov 33:08
Yeah, yeah.
Willem Janssen 33:08
Half of the crowd is tuned out, but keep going.
Marta Andhov 33:12
Yeah, I’m not going to dive into it. Because I feel the same about him like, well, this just becomes a bit, you know, but that just to highlight that complexity. Absolutely. One other point there is, I think a bit specific also to framework agreements done by central purchasing buddies is also because we’re talking about this economies of scale, and huge aggregation is a specific question of how you deal with extremely large product groups. So, let’s say that your framework that you establishing is on supplies, and you got in 1000s, or even 10 000s of different product groups, let’s say, you know, office supplies, and God knows how many different types of pens and pencils and whatever else, right? The questions that are being asked and there is a certain level of on clarity there is whether you can have a type of more general descriptions of product groups, or whether you really need to enumerate in technical specification, also each individual product, and then what if you just don’t buy one of them? Like how much discretion you have up here? Because when we talking about such a huge product groups, right, that becomes a bit complex and how you assess it, can you assess it again, on more general terms, or very, very specifically? So, I think that those are the very specific things to framework agreements. Now you need to just somehow, because I can see your in camera unit indicating me at some point, how are we in time, so I need to know….
Willem Janssen 34:56
…keep going. I think framework agreements is by far the biggest chunk f I can also make a reference to one of our previous episodes about absolute maximums of framework agreements…
Marta Andhov 35:08
May I say the most successful episode of our podcast so far?
Willem Janssen 35:13
I would tend to say it’s actually the most….those are the ones about Stadt Koln or maybe some other things about in-house. But anyways the data speaks for itself, but let’s not dwell on that.
Marta Andhov 35:25
Absolutely, absolutely. I agree, but besides framework agreements, of course, we have other procurement techniques, dynamic purchasing system being another one. That one when it has been introduced in 2004, didn’t really gain much traction on the market mainly because it requires a full digitalization of the procurement process. So, for many countries, within which we didn’t have yet full digitalization, that was connected with a huge amount of investment required to run this type of technique. So there was not much traction, but with the new directives, and the type of requirements introduced in context of really pushing the digitalization agenda, and central purchasing bodies actually being the first group of addresses, I guess, of this, they were the first one timewise to actually go digital. The dynamic purchasing system seems to get a little bit of more traction. There has been over the last couple of years of discussion, that it will be interesting to see in upcoming years, whether this really will take over dynamic purchasing system will become predominant used technique in comparison with framework agreements, because the difference here really is that the nature of dynamic purchasing system is that it’s open. Right? So if you have a new suppliers coming in, you can add them to the dynamic purchasing system, and that’s being perceived as more competitive and more flexible market, more flexible. Absolutely. But it’s not for now, huge success, I would say the increased numbers of usage of this technique we can see mainly in Scandinavian countries, and on other hand side we heard comments, for example, from Spain, and the government in Spain does not really necessarily see the dynamic purchasing system as a technique that really proves its efficiency. There is a certain doubt. Similarly when it comes on other hand side to framework agreements Romanian government is quite sceptical and it’s not particularly fond of framework agreements, and it’s not particularly promoting insists even R. Vornicu contributed with some comments to that within the chapter, I think on Romania, but also in ours, on the comparative on saying that there is a certain doubt. Maybe it’s connected with the fact that it’s quite closed, and it can have a potentially anti competitive character too. Then the last one is, as a technique also that we look a little bit more into worthy generally understood e-procurement and e-auctions and up here, at least from the data that we that we worked with, there was not much to really report. It’s quite interesting, because obviously there are different versions of e-procurements used and different systems, but there doesn’t seem to be much knowledge shared or practices here specifically about using auctions as a specific tool for that. So, everyone is saying: – Well, there are some things but can we really define it as that there is not really maybe that really highlighted as such? – So that’s I would say again, my beloved frameworks. It’s true, that are predominantly dominating here.
Willem Janssen 39:13
So in a way that’s already interesting, I think. It is always when something is not there or lacking it, I think sparks an interest in every researcher. What do you think you want to explain it, or maybe it is there, but we know maybe we need to look in different places you never know, right? There’s all these questions that pop up. But one maybe one final question that I have for you is, question that’s always come up with me is and I think I refer to it already, when we moved on to this bit of the podcast episode is: – All of these things that this they’re really relevant techniques, but in what way are they different from centralised purchasing bodies as opposed to a single contracting authority also using framework agreements are also using? – So is it simply that it becomes more important because you have more volume? So the use of framework agreements is more important, and it becomes more complex with more multiple players involved, etc? Or is this really a distinguishing factor between that single entity and that aggregated purchasing through a bigger entity?
Marta Andhov 40:25
Well, I think that the the scale of it makes sense, on the one hand side, potentially having much bigger impact, right? If that is in context of saving, in context of delivering all these different outcomes, let’s say sustainability, innovation, etc. but also complexity, these, you know, undoubtfully, the aspect of it is, when you’re running, let’s say, your framework agreement for yourself, and you are the only buyer as a contracting authority. And let’s say it’s a framework agreement with five suppliers. Right? Now, you can see the scale of challenges here will be quite different when you have a type of, you know, two levels of central purchasing body establishing a framework agreement that is then used by contracting authorities that then let’s say run mini competition, right? So, you have this all different levels and then when you add to it from central purchasing, body, let’s say did the uses of your frameworks you have, I don’t know 25 or 50, let’s say there was one framework agreement in Finland, that has been challenge in a very interesting case that I know that our colleague Kirsi commented on and translated also, I think, in a blog post on Albert’s blog, that kind of listed all contracting authorities in Finland, as potential uses of that framework agreement. So you know, the scale of it is already huge and then now add, you know, let’s say 50, for example, of suppliers, that not only makes it that much more complicated in context of running it and administrating it, cost resources, but also, I think, quite complex, legally speaking, because how you really align that? I think a really interesting question here also, it’s a little bit like on steroids, right? Last time that we discussed framework agreements, we talked about this maximum values, and the challenge when you reaching them, the framework agreements is stuff being binding instead of the contracts later on, awarded can be ineffective? The question is: – If you have so many parallel running procurements, how you control it, that you really know, which is the moment that they are being reached? – So, I don’t think that there is something a very elaborate answer to your question. I don’t think there is very specific issue with central purchasing bodies using these techniques, but I think that they are just a type or on steroids, the metaphor that comes to my mind or through magnified mirror, because of the scale of the complexity of them.
Willem Janssen 43:10
Alright, I think it’s always nice to end with complexity, right leaves us more opportunities to make more podcast episodes. Just to recap, we’ve looked a bit at the Netherlands and I think it’s just a case that highlights the differences between the member states. We’ve talked a bit about autonomy versus obligatory participation. How these patchworks work, how intense cooperation can be. And clearly also what are some of the techniques that are used to actually make it happen in practice? So, if we can move on to dessert, right, we’ve got a couple of minutes left. I actually think it’s more about sharing, because the topic that we pick for today is how do you stay up to date in public procurement law? This can be different for everyone, but we thought it would be of interest to at least share how we do it, and then perhaps, this will spark some discussions, perhaps on LinkedIn or Twitter, if you’re following us about your way of staying up to date, but let’s pass the ball on. In a couple of brief sentences, how do you stay up to date?
Marta Andhov 44:23
I think that single handedly I would say that LinkedIn is a really good source for me. I do tend to stick to as much as I can one social media platform for professional reasons being LinkedIn and just you know, people really are sharing if that’s commission you cases or blog posts or podcasts. It is a variety of different sources from different people, and I think that I yeah, you get quite a lot, quite quickly. That is quite nice, but one of the things that we discuss often with with you Willem is also how really you get on top of following the newest case law, right? How you really make sure that you know what new case law is coming up, so if any, any of our listeners have some good strategy. Are you just visiting the courts website regularly? Are you googling what would you doing? Tell us because we for sure are up for a new, new form of thing updated with the European Court of Justice case law. What about yourself?
Willem Janssen 45:27
I think Well, I mean, I tend to use LinkedIn as well, I think blog posts e.g. howtocrackanut.com by Albert[2], Pedro’s blog tells.eu[3] if I’m correct, Michael Bowsher’s Mostly Procurement Bulletin blog[4]. I think there was a great ways of staying informed, right. But they do tend to focus a lot on the UK. Right?
Marta Andhov 45:50
For sure.
Willem Janssen 45:41
So there’s some Dutch websites by public authorities that I use myself, we tend to publish overviews of the of the case law, I think the answer to your question often will be: – Yeah, they use a paid service. – Right? So, the notification by a paid service, such as legal intelligence. But perhaps there’s better ways, right? Sometimes I feel like that curia.eu could use a little bit of IT improvement to make it more accessible, even though it’s… I mean, it works, right. It’s not the most user friendly interface, but it does tend to work.
Marta Andhov 46:25
Just putting it out there, you know, like creating a type of system in which you can subscribe, let’s say to any case that comes out that is from particular legal source, right? So, there is within the directive that we are mainly interested, anything that comes up, then there was a particular subscription list that you can… That would be so nice. So, whenever something comes up, it lands up in your inbox.
Willem Janssen 46:49
That’s I think I feel like you’re suggesting something to the courts. I hope they are listening.
Marta Andhov 46:52
Court IT particularly, not the judges.
Willem Janssen 47:00
I think part of that’s also caused by the fact that it’s listed under internal market law, right. So, as a category, if you search, right, most of it’s linked under that, and if you’re lucky, if you put in public procurement, or procurement as such that you end up with the right stuff, but perhaps a subcategory would be would be great as a suggestion, if we’re making a wish list right sent is not coming for a long time, but maybe this could already be on our list. So we’ve got blogs, perhaps our podcast for other people, I tend to stay up to date by talking to you, but maybe that could also be of interest.
Marta Andhov 47:33
That’s, that’s our ambition, right, ultimately, that some people are somehow updated, through our blog posts, sorry, through our podcast.
Willem Janssen 47:42
Perhaps, you got blog posts, we’ve got these notifications that could perhaps improve a bit. You could listen to this podcast, if that’s useful, but please share if you’ve got particular newsletters that you follow or things that you find really useful to stay up to date. We’d love to hear about it. I think we have to round up. Thanks so much Marta for discussing centralised purchasing bodies and how to stay up to date in public procurement law. This was Bestek, the public procurement podcast.
About Bestek 48:10
This was Bestek, the public procurement podcast. Do you want to contribute to today’s discussion? Then share your thoughts on LinkedIn or Twitter. Do you have an idea for a future episode? Write to us at www.bestekpodcast.com
You might also be interested in Marta’s and Willem’s (future) publication on this subject:
* W.A. Janssen & M.A.J. Stuijts, Centralised Procurement in the Netherlands: A mixture of procurement autonomy, decentralization & diversified collaborative purchasing (forthcoming 2021);
* M. Andhov, R. Vornicu, A comparative view of the use of procurement techniques and electronic instruments by central purchasing bodies (forthcoming 2021).
________________
[1] “Centralising Public Procurement – The Approach of EU Member States” – https://www.e-elgar.com/shop/gbp/centralising-public-procurement-9781800370401.html
[2] https://www.howtocrackanut.com/
[3] http://www.telles.eu/
[4] https://mostlyprocurement.typepad.com/my-blog/
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