Public procurement in Europe: Cost and effectiveness

March 2011 | Ivar Strand, Paula Ramada and Erik Canton, PwC, London Economics and Ecorys

The economic significance of public procurement in Europe is considerable, with yearly purchasing valued at 3.5 percent of the region’s GDP. Public procurement is regulated by two separate EU Directives: the Public Sector Directive on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts; and the Utilities Directive, coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. The aim of this study is to improve the understanding of the impact and effectiveness of the EU public procurement directives. The analysis covers all 27 EU Member States and the 3 EEA countries. The study is prepared in the context of a comprehensive evaluation of the procurement directives currently being undertaken by the European Commission and to help inform decisions about future policy. The first part of the report identifies and discusses patterns of use of the different procedures and circumstances that may be associated with the choices made by the authorities when selecting the type of procedure for a particular contract. We identify patterns in the use of the various procedures and techniques (across countries, over time, and across sectors), and we investigate circumstances that may influence the use of the different procedures. The second part provides a detailed analysis of the costs and effectiveness of administering and participating in selected tender procedures/techniques foreseen by EU procurement legislation. The analysis looks at procurement under the Directives in comparison to procurement under national procurement regulations and to private procurement.

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