Why reserved contracts in public procurement are important
Last March we wrote an open letter to the European institutions, together with ENSIE and other European networks, highlighting the importance of keeping the possibility to restrict tendering procedures (reserved contracts) to economic operators that pursue the aim of the social and professional integration of persons with disabilities and disadvantaged persons (art. 17.1 of the Commissionâ€™s proposal for a directive on public procurement). We decided to write this letter because in December the Council adopted a new provision (art. 17.2) that puts in jeopardy the opportunities that art. 17.1 provides. This new paragraph extends the possibility to restrict tendering procedures to organisations whose main aim is the integration of former employees of public authorities into the private sector.
We often hear that the provision added by the Council does not affect reserved contracts for the social and professional integration of persons with disabilities and disadvantaged persons. This is why last week, together with ENSIE and other European networks we decided to write again to the EU institutions providing additional information on how the paragraph added by the Council has a negative impact on art. 17.1 (the full letter).
As art. 17 is not mandatory for member states, while transposing the directive in their national laws member states might decide to transpose only art. 17.2.
The economic operators that benefit from reserved markets on the basis of art. 17.1, traditionally are non-profits, social economy organisations and social enterprises. So far, traditional businesses do not employ at least 30% of people with disabilities or disadvantaged people.
Based on current practice, several social enterprises that pursue the aim of the social and professional integration of people with disabilities and disadvantaged people, deliver public services, such as maintenance of green spaces, waste collection and disposal. As art. 17.2 allows the award of every type of public service contract, this could lead to examples of direct competition. In fact, in the procedures for the award of public service contracts, just one type of reserved contract could be introduced (17.1 or 17.2).
Furthermore, the new provision adopted by the Council has an indirect impact on the liberalization of public services and privatization of public entities. In fact it applies when former public officials leave their position within a public authority and are employed by an â€śorganisationâ€ť with the characteristics specified in art. 17.2.
We consider that the liberalization of public services and privatization of public entities is a choice and a competence of member states: this is why the public procurement directive has to be neutral in this respect. It is also important to pay attention to the fact that, in the context of the current economic crisis, if our demand is not met and art.17.2 is not deleted, there are serious risks that this provision could be used by contracting authorities to cut the costs for the provision of public services: this might have a negative impact on the quality, affordability and accessibility of public services for citizens, as well on the working conditions of former public employees.
We are confident that these arguments will be taken under consideration in the ongoing negotiations.