[00:00:00] Marta: Welcome to Bestek, the public procurement podcast. Today, I will be talking about future of EU public procurement.

[00:00:07] Bestek Intro/Outro: 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.

[00:00:38] Marta: Hello, dear listeners. It’s me again, Marta Andhov, and I’m back with another aperitif. As you may remember, it will be just me and you, but funnily enough, our dear co-host Willem will make a guest appearance today. As he is on the panel I’m about to play, which is a first for this little series, and it’s made a recording, this one, a little bit strange in a good way, hearing him argue his case to a room, um, full of our participants at the conference instead of just talking to me as we usually would do so here at the podcast.

[00:01:22] Today, we’re tackling the question of progress. As you know, dear listeners, we are currently in the process of updating our regulatory framework on public procurement in Europe, and as a lot of questions surface, uh, what should we do different in this new updated version that is coming, whether it should be a directive or maybe a regulation.

[00:01:46] Um, so a lot of interesting topics to discuss. So here’s the setup. This recording comes from a panel called In Conversation With: What the Future Holds Towards the New EU Procurement Directive. This panel has been part of PurpLE Conference, um, held in June in Copenhagen, that was concluding this project that, um, myself and the team had a chance to work on a couple of years, and it was great fun.

[00:02:21] This panel actually also was probably one of my personal highlight. It has been chaired by brilliant Grith Skovgaard Ølykke, who is currently a partner at the law firm Poul Schmith in Denmark. But Grith also has been, over the years, a great and very acclaimed academic, legal academic in, uh, Copenhagen Business School with her work on state and public procurement.

[00:02:47] Um, she opened the panel with something close to a report card on 2014 procurement reform, and the verdict, uh, was really, well, we could have done better with it. Uh, the 2014 reform ultimately introduced more complex, more ambitious, more strategic importance and rules, and we could conclude that only partially it was equipped to deliver any of it. The panel covered a lot more than what you’re about to hear.

[00:03:18] It was a really great panel that managed to discuss a lot of substance, but in a very light-hearted, jokingly at times manner, uh, with a whole lightning round of quick questions and answers that made many of us in the room giggle a bit and really lean into the format. Today, I just want to focus on one of the threads.

[00:03:44] Not whether the EU should keep reforming procurement law. Everyone agrees it will. But whether any of it is making procurement better or simpler, or whether we just layering on more rules and more rules and calling it, uh, this layering exercise a progress. Two voices that you’re going to, uh, hear, and they’re going to carry this one.

[00:04:11] You’ll hear your, um, beloved co-host, Willem Janssen, first, uh, just as a matter of, um, formality. Currently a professor at Utrecht University and Groningen University in the Netherlands, and the co-host of Bestek public procurement podcast. And then you’re going to hear from Professor Roberto Caranta of the University of Turin.

[00:04:38] Their bulk work, uh, focused on preparatory work, uh, writing reports for the Commission on coherence and the state of public procurement, uh, directives and what they achieved and what they not. And they fed directly into the Commission’s own evaluation. I will let Grith set the scene first because she says it, uh, in about a minute what took a commission about 200 pages of evaluation to say, and I think that she does a great job doing so.

[00:05:10] So let’s hear from Grith.

[00:05:12] Grith: If nothing else, the evaluation demonstrates that the debates we had in 2011 have proved remarkably durable. We are still discussing clarity, flexibility, simplification, competition, strategic procurement, and cross-border trade. Now only with an additional layer of geopolitics, economic security, resilience, strategic autonomy, digitalisation, and sustainability requirements.

[00:05:40] Public procurement is no longer asked merely to deliver competition and value for money. In conclusion, the current framework appears to be functioning, just not in the way one might have hoped. It has successfully become more complex, more ambitious, more strategically important, while remaining only partially equipped to deliver on those ambitions.

[00:06:03] Marta: More complex, more ambitious, more strategically important, and only partially equipped to deliver. That’s Grith laying out the whole shape of the problem before either of her panellists gets a word in.

[00:06:18] So the obvious next question is what it looks like from inside of the system. Willem spent months mapping exactly that for a research study. Every regulation and directive that now touches procurement, not just the procurement directives themselves. Here’s what he found.

[00:06:39] Willem: So what surprised me in my study, so for a long time I felt very comfortable as a, as a procurement scholar, uh, procurement law scholar, to just be in the public procurement directives. And I think that goes for many of you probably. But if it hasn’t happened yet, uh, it might happen soon.

[00:06:56] We will start to feel more uncomfortable, um, because, um, what’s happened is that we’ve created patchwork of different regulations and directives, uh, that regulate procurement as well. And, um, what the study tried to do is to sort of see, to map that and to provide an understanding of it. Um, and I’m talking about over 62 regulations and directives.

[00:07:24] They say there’s 20 more in the pipeline, so the ball keeps rolling. Um, and, and what surprised me in that sense is that it’s, it’s all over the place, right? So it regulates above and below the thresholds that we hold dear. Um, and it seems that the EU legislator from different angles has simply chosen to use almost every single regulatory method out there, right?

[00:07:50] Marta: 62 regulations and directives with 20 more in a pipeline.

[00:07:57] It’s all over the place, in his words. And what’s easy to miss in that number is that it isn’t 62 competing versions of the same idea. It’s 62 different regulatory tools, objectives, technical specifications, entirely new principles, like energy efficiency first, all landing on the same contracting officer desk at once.

[00:08:25] So where does all that comes from? Roberto’s answer to that is blunter than you might expect from an academic. But on the other hand side, if you know Roberto, you’re not surprised.

[00:08:38] Roberto: The problem is, you know, the internal market was beautiful, and it was basically, uh, for free. You didn’t need to put public budget to achieve the internal market. Now we have other priorities: environmental, social, strategic, defence, resilience, industrial policy. And these are all priorities that need a lot of money.

[00:09:17] And the bad news is that is, uh, uh, the good news is priorities are at the EU level. Bad news is the EU budget is not that much money. It’s not the US government. So how do we achieve this? Okay. Uh, yesterday in the panel, uh, above, Sarah was saying rightly, “Oh yeah, we could– can do, uh, things with public procurement, but we could also do things with state aids.”

[00:09:48] Uh, well, that is one option. But again, the EU level is not that much money, so what are you using? You are using 15 per cent of the GDP, which is a lot of money, which is public procurement to try and to achieve. I had, uh, but it was a few years ago, a nice slide with two pigeons and one stone saying that public procurement can achieve buying but also environmental.

[00:10:16] These, uh, uh, these days, this is a stone that we use to kill 62 different pigeons in one go. It’s probably going to be complex, but honestly, do we have an alternative? I don’t see the alternative to using public procurement to achieve those general interests that we have at the EU level.

[00:10:44] Marta: One stone to kill 62 different pigeons. Roberto’s point underneath the joke is straightforward. Every one of those new priorities, environmental, social, strategic, defence, resilience, needs real public money behind it, and the EU budget was never built to fund all of them at once. So if you can’t do everything, what do you prioritise?

[00:11:10] Willem has an answer to that, and it’s more radical than you might expect from someone who spends his work life inside procurement law rather than outside criticising it.

[00:11:22] Willem: I would say what we need is prioritisation. So we’re trying to, I think, use procurement to solve, we talked about this yesterday, to solve a lot of societal issues. And then one of those factors is, is that there are other ways of solving those issues than just procurement.

[00:11:41] And I think that says something about the, the legislative objectives that we give to procurement. So going back in time, we’ve had, uh, well, something beautiful happened in the ’70s. We got procurement directives. Um, on the other hand, that’s 54 years ago that we got those, right? And as Grith rightly said, the objectives of interstate trade have, have never been achieved.

[00:12:04] I mean, the Commission attempts to sort of make it 20 per cent by including, uh, subsidiaries or, or holding ventures also in, in that, those statistics, but it, it goes around four to five per cent. So I think that, or that conclusion alone sort of merits rethinking of what objectives we put under procurement legislation.

[00:12:23] And then I think if we look at prioritisation, what’s the most imminent threat to society and the planet?

[00:12:29] Audience member: Climate change.

[00:12:33] Willem: Climate change, right? It’s sustainability. So I would say if we need to prioritise, let’s look at how existential the threat is and where we need to gear all of our effort to, efforts towards.

[00:12:43] And if we need… If something in procurement needs to fall off the wagon, let it be something that is of lesser importance. So this is where I would say let’s flip it up. Let’s change the mindset and move fr- away from more internal market thinking to a more su- sustainability thinking.

[00:12:58] Marta: Flip it up. Stop asking what procurement law happens to cover, and start asking what the most existential threat is.

[00:13:08] Then point everything at that. Is it a bold position for someone who’ll then have to go teach the other 61 objectives to a room full of students next term? But Willem’s sustainability-first pitch assumes you can simplify the rules enough to make room for it. Roberto isn’t convinced simplification’s even the right goal, and he opens with a philosopher and a joke about gold plates before he gets to why.

[00:13:40] Roberto: Well, let’s be honest. Uh, we had, um, a philosopher, the Italian, uh, Thomas More – Campanella – and his idea of utopia was the Città del Sole.

[00:13:51] And he had this idea that the laws must be clear. So the laws in the Città del Sole, they are, let’s say, engraved in gold plates around the central temple. And I’m fantasising about having public procurement legislation… on gold plates. It’s not going to happen. Uh, let’s grow up.

[00:14:19] There is only so much simplification you can achieve with a complex topic. Okay? As Steve was telling us yesterday, the FAR is more than 1,000 pages long, so how much gold would you need if you wanted… And, uh, so flexibility.

[00:14:40] But I think that we cannot always blame the European Union. It is the contracting authorities in many s- member states that are afraid of flexibility because they are afraid of court of auditors, because they are afraid of oversight bodies. So it’s not you change the legislation and suddenly they feel vindicated and free to act.

[00:15:06] Marta: Contracting authorities afraid of auditors, not Brussels. That’s the real reason simpler rules on paper don’t automatically translate into simpler behaviour on the ground. And it’s the point in this whole panel that gets the least attention because it puts the responsibility somewhere other than the legislation itself.

[00:15:29] So if simplification alone won’t fix that and prioritisation is the answer Willem has already given us, where does that leave the actual next directive? Grith’s closing question to both of them was simple: What should the next generation of procurement legislation achieve? Here’s Willem, uh, tying together everything we’ve heard so far, patchwork, prioritisation, simplification, into one prediction.

[00:16:07] Willem: I’m gonna say sort of a juxtaposition which doesn’t make sense, but hope- hopefully it’ll make sense after.

[00:16:11] M- m- more demanding rules but also less rigid rules. And, and I hope that that will be the outcome of the public procurement, uh, revision, is to say I, I think we desperately need long-term cooperation with, with contractors to achieve sustainability objectives but also to, to spend budget, uh, taxpayers’ money more efficiently.

[00:16:32] So that means we need to really think about more, less rigidity on, on, uh, on fixing mistakes in bids, but also modification of contracts. I think we need more leeway there. So less rigidity on the procedural side of things, but more strictness on the pursuit of societal objectives like green and social.

[00:16:50] So more mandatory requirements there. So in a way, m- more, less rigid but also more demanding, uh, rules. And I hope that will be sort of the outcome and we look back and say that that sort of mix actually worked.

[00:17:02] Marta: More demanding rules, but also less rigid rules. Strict on the outcome that matters, flexible on how you get there. Ultimately, I don’t think this is an either/or, even though I frame it that way at the start. Willem’s own research found 62 regulations touching procurement with 20 more coming, so no, it isn’t getting simpler by any account.

[00:17:32] But Roberto’s point is that simplification was never the right goal to chase in the first place in this context. You can’t legislate a complex problem into a simple one just by wanting to. And half the complexity isn’t coming from Brussels anyway. It’s contracting authorities protecting themselves from their own auditors.

[00:17:56] What you can do is get clear on which parts of the system need to be strict, the outcomes, the green and social objective that matters most, and which parts need room to breathe, the procedures, the discretion contracting authorities are given to use their judgement. That’s Willem’s prioritisation argument and Roberto’s point about where the real friction sits, landing on more or less the same place from two very different directions.

[00:18:29] That’s the point of pulling one thread out of a panel like this. Willem and Roberto have spent their career on exactly this question, and next time you’re starting down a new procurement reform wondering whether it’s actually going to simplify anything or just add another layer, you’ve got two very different well-informed answers to reach for.

[00:18:51] Before I say goodbye, a quick word on where all this comes from. This panel was one of many at our PurpLE conference this past June, Public Procurement and Contracts: Navigating Today, Designing Tomorrow, which grew out of the PurpLE Project, funded by Carlsberg Foundation. More than 40 expert speakers joined us across those two days from across the globe, and you hear a few more of them in the aperitifs still to come.

[00:19:24] If you want more on Willem, Roberto, or Grith, or the new book this whole conference fed into, Public Procurement and Contract Law: Exploring Intersections, Defining Boundaries, it’s all linked in the show notes. And the book is in open access, so you don’t even need to buy it. I’m Marta, this has been Bestek, and I’ll catch you at the next aperitif.

[00:19:47] Bestek Intro/Outro: 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.

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