Ref. Ares(2022)1580770 - 03/03/2022
Background information
International Procurement Instrument (IPI)
The Commission adopted a revised legislative proposal for IPI on 29 January 2016, (initial
proposal from 2012). Its aim is to open third countries by creating leverage in negotiations
on procurement.
Why now?
In the context of spreading discriminatory practices (“Buy America(n)”, “Made in China
2025” or “Make in India”), it is necessary to promote reciprocity in global procurement. In
the EU-China Communication (Action 6), the Commission called for adoption of IPI (by end
2019). The European Council also called in March 2019 for “resuming discussions on IPI”.
What?
The IPI, according to the proposal, would be functioning in three steps:
1. Commission investigation on existing serious and recurrent discrimination in access
of EU companies to a third country procurement market;
2. Negotiation with this third country aiming at removing the discriminatory measures;
3. Only in case of failure of these negotiations, possible adoption of a "price adjustment
measure" (=price penalty) by EU, to be applied by contracting authorities to offers
whose origin is for more than 50% from targeted countries/sectors.
Who?
• Council: Under Finnish and Croatian presidencies, many meetings took place and
several adaptations have been discussed. The Croatian Presidency tabled draft text
proposals in February and June, in particular for core issues (the target and type of
IPI measures). Under German Presidency, progress was limited however (due to
internal discussions) and only a few meetings took place.
• The European Council in September called to “accelerate work on IPI”
• The EP was supportive of the proposal, but stopped working in 2017 when Council
did not progress.
(EPP-DE) was reconfirmed as
in the INTA
Committee. Currently, he is waiting for progress in Council, before deciding on the
next steps in EP.
How?
The fol owing changes are envisaged to build consensus on a credible, effective and simple
IPI:
•
Type of measure: There is wide support to add the possible exclusion of bids,
simpler to implement. Price-adjustment could remain as an alternative option.
•
Target of the measure: The proposal targets bids with a certain foreign content,
which is considered too complex. Instead, there is wide support for applying IPI
instead to companies established in the third country concerned.
link to page 2 link to page 2
•
Procedures: There is general support for shortening and simplifying the investigation
and consultations, and doing both phases in parallel.
•
Thresholds: the current 5M€ threshold is considered too low, in particular for works
and concession contracts. Higher thresholds would also exclude smal contracting
authorities.
What next?
• Early 2021, the PT Presidency has submitted a compromise legal text to MS. This is
discussed in detail in the meetings of the TQWP.
• Once the Council agrees on a way forward, discussions with EP should resume to
finalise the adoption. This could potential y happen in the first half of 2021.
• The Commission (TRADE and GROW) continues to proactively support consensus
building by elaborating meaningful improvements to the text.
Threshold for the application of the EU procurement regime
1. Thresholds
• The thresholds above which European legislation for public procurement applies are
set out in the Public procurement Directives 2013/24/EU, 2014/24/EU and
2014/25/EU (“PP Directives”).
• The main limits
1 are:
o EUR 139.000 for most types of services and supplies purchased by central
government authorities
o EUR 5.350.000 for construction contracts
• The thresholds are the result of the EU's commitments in the WTO Government
Procurement Agreement (GPA). Thresholds must be aligned to correspond to the
equivalents of the GPA thresholds every two years.
• Article 92 of Directive 2014/24/EU
2 foresees a review by the Commission of the
economic effects resulting from the thresholds. This review shal take into accounts
factors such as cross-border award of contracts and transaction costs.
• A Commission report on this review should have been provided by 18 April 2019. No
report has been published so far, due to delays in the transposition of the PP
Directives.
• Article 92 also requires the Commission to consider suggesting an increase of the
thresholds during the next round of GPA negotiations.
2. Calls for an increase of thresholds
1 For a more detailed overview of the different thresholds, see:
https://ec.europa.eu/growth/single-market/public-
procurement/rules-implementation/thresholds_en
2 Equally worded provisions are contained in Article 53 of Directive 2014/23/EU (“Concessions Directive”) and Article 108
of Directive 2014/25/EU
link to page 3 link to page 3
•
Redacted under exception of article 4(1)(a) third indent of Regulation 1049/2001
• In its Conclusions of 30 November 2020
3, the Council called on the Commission to
review the economic effects resulting from the application of the thresholds as
stated in Article 92.
• In the Council conclusions, the cal for review is based on the need to boost
investment in the aftermath of COVID-19, and SMEs’ access to procurement markets
in the EU recovery.
•
Redacted under exception of article 4(1)(a) third indent of Regulation 1049/2001
• The PP Directives provide for the necessary flexibility to public buyers to purchase
goods and services directly linked to the COVID-19 crisis as quickly as possible. The
Commission issued guidelines in this regard already in April 2020.
4
3. BDI position
• In recent public statements, the BDI has taken a critical view of the DE government’s
calls for increases of the thresholds, as exemplified in a BDI letter to German
Minister for Economic affairs
Altmaier dated 2 December 2020.
• The letter lays out the main reasons for the BDI’s rejection of a threshold increase:
- Thresholds are already very high.
- A threshold increase would lead to
o thwarting the essential goals of transparency, fair competition and
fighting corruption
o reducing effective legal protection for bidders in tender procedures
o harming SMEs competing for smaller contracts (for which there is less
legal protection)
- The existing legal regime allows for exemptions and flexibility to cope well the
COVID crisis.
- Whatever the result of the Art. 92 review, the Commission should not seek an
increase of the thresholds because it would mean:
o Unwelcome reduction of the scope of the GPA
o Less business opportunities for EU companies abroad
o Wrong signal in terms of international market opening.
3 Council Conclusions Public Investment through Public Procurement: Sustainable Recovery and Reboosting of a Resilient
EU Economy (2020/C 412 I/01)
, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020XG1130(03)
4 Guidance from the European Commission on using the public procurement framework in the emergency situation related
to the COVID-19 crisis (2020/C 108 I/01)
, https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52020XC0401(05)&from=EN
