Transparency Notices in the EU Public Procurement Regime: An Empirical Study on the use of Transparency Notices in Denmark, Sweden and the United Kingdom

Presented by Professor Lisbeth La Cour and Associate professor Grith Skovgaard Ølykke, Department of Economics, Copenhagen Business School

International Public Procurement Conference 6, Dublin, 15. August 2014

2

Country Transp. notices (TN)

Number

Contract Awards (CA)

Number

TN/CA

%

Population (P)

Mill. 2010

TN/P

Number/mill

Austria 328 9650 3.4 8.4 39.2

Belgium 24 15032 0.2 10.8 2.2

Bulgaria 96 13061 0.7 7.4 12.9

Cypress 47 1590 3.0 0.8 57.4

Czech Rep. 95 18555 0.5 10.5 9.1

Germany 181 79144 0.2 81.8 2.2

Denmark 1429 8546 16.7 5.5 258.2

Estonia 18 4434 0.4 1.3 13.5

Spain 349 39151 0.9 46.5 7.5

Finland 843 10498 8.0 5.4 157.5

France 27305 155762 17.5 64.7 422.3

Greece 27 5403 0.5 11.2 2.4

Croatia 57 359 15.9 11.2 5.1

Hungary 3 9158 0.0 10.0 0.3

Ireland 31 3247 1.0 4.5 6.8

Italy 935 31940 2.9 59.2 15.8

Lithuania 198 8847 2.2 3.1 63.0

Luxemburg 3 2117 0.1 0.5 6.0

Latvia 102 4889 2.1 2.1 48.1

Malta 0 735 0.0 0.4 0.0

Netherlands 196 15104 1.3 16.6 11.8

Poland 3531 92602 3.8 38.2 92.5

Portugal 17 4947 0.3 10.6 1.6

Romania 1 15079 0.0 20.3 0.0

Sweden 291 15140 1.9 9.3 31.2

Slovenia 705 5557 12.7 2.0 344.4

Slovakia 559 4442 12.6 5.4 103.7

UK 1741 34408 5.1 62.5 27.9

3

Our data: TED – very time consuming to use. But also very rich! • Tenders Electronic Daily (TED) is for free – if you thank the EU for

making the TED data available.

• It consists of various types of text contracts notices – we focus here on a specific type: transparency notices

• You can extract data from 5 year back (on a running basis). It is a bit unclear right now whether it is possible to buy older data (from 2003 onwards).

• For a statistical analysis the main challenge is to extract useful information from the text documents.

• For the present study we focus a lot on the reasons for choosing to use a transparency notice (classification done by a member of our research group)

• Other info that can be extracted (when also other types of notices are studied): Award criterion, Value, International, Procedure, Type of contract, number of bids, identity of the winner, geografic info (NUTS codes), industry information (CPV codes)

4

Why bother about all these data if it is so difficult to work with TED?

We have in principle all EU data over the threshold level.

We can try to either confirm or reject myths about behaviour

in public procurement.

Changes over time.

Country comparisons.

Degree of internationalization.

Sub sample studies like the present for a specific type of

notice. But also possible for specific types of goods or

services.

5

Number of transparency notices over time in UK, S and DK

Denmark

Sweden UK

Monthly data

Timespan:

Jan 2010 – Dec 2013

(total: 1712) (total: 290)

(total: 1429)

6

Simple regression analysis

RQ 1: Is there a positive trend in the number of transparency notices?

Confirmed for UK and DK - but not for Sweden

RQ 2: Is there a seasonal pattern - more notices - around main holiday

periods (July/August and December)?

July/August: UK

December: DK, S

- May also be budgetary considerations involved when discussing number

of notices in December.

Caveat: Still a limited time span leading to low power of the tests.

7

Transparency notices – divided on Directives – pooled data

2004/18

2004/17

2009/81

82,20 % 4,54 %

13,26 %

8

Directive by country

9

Type of contract – pooled data

51.26 %

4.96 %

41.90 %

Supply/Services

Supply

Services

Other: 1.88 %

10

Type of contract – by country

11

Industry (CPV) – pooled data

35.00 % - other

5.12 % - business

services

4.79 % - construction

4.11 % - health/social

18.66 % - It services

5.14 % - software

4.71 % - security,

police

4.14 % maintenance

4.11 % - energy

9.09 % - medical

equipment

5.14 % - lab. equipment

12

Industry (CPV) by country

Forestry?

hardware

Tv/radio

Transport

equipment

R&D

13

Reasons for the use of transparency notices

• No formal need to publish transparency notice

Excluded

• No reason Best guess…

• Several reasons Reason 1 and reason 2

The most ”important” reason

Need for more than one reason?

14

Reasons - pooled data

Framework

agreement

Exclusive rights

Below

threshold Annex II B

Amendment of contracts

Additional supplies

Other

Urgency Technical

reasons

13.93 %

12.01 % 4.67 %

11.86 %

4.40 %

8.27 %

14.32 %

4.55 % 26.00 %

15

Reasons by country

DK: Sweden: UK:

Frameworkagreement Technical reasons Technical reasons

Technical reasons Urgency Annex II B

Exclusive rights

Additional works/

services

16

Peculiarities

Denmark Commodity market – electricity, Article 31(2)(c) + Article 16(d) of the Public Sector Directive (2011: 10; 2012: 24; 2013: 11)

Gifts/donations (2010: 2; 2011: 3; 2012: 1; 2013: 1)

Sweden Prolongation of contract due to complaint over new

procedure (2010: 5; 2011: 2; 2012: 1; 2013: 3)

Procurement of art (2011: 2; 2012: 3; 2013: 1)

United Kingdom Sale of land/property (2010: 1; 2011: 4; 2012: 1)

Land/works (2012: 5; 2013: 14)

DK: (2010: 1; 2011: 5; 2012: 4; 2013: 5)

17

Greatest challenge: technical reasons

Perceived as a broad exemption: • Product characteristics (one particular product

wanted)

• Interoperability (when Article 31(2)(b) does not apply?)

• Staff training

Case law: • Narrow interpretation – so far not granted, but old

case law on works

• Economic reasons would not be sufficient

18

Conclusions and perspectives

Great variety in use between the examined Member States

No certain statistical conclusions due to short period – but we are following up!

Great variety in the quality of transparency notices (legal basis, references to case law, several reasons provided – uncertainty?, some simply no information…)

Fastweb-judgment comming up – possible effects?

19

Thank you for your attention –

questions welcome!