Centralising Public Procurement and Competitiveness in Directive 2014/24

New Publication by BECCLE’s Ignacio Herrera Anchustegui. The article analyses how centralization of public procurement practices has been incorporated in the Public Procurement Directive of 2014, its impact on the competitiveness of procurement markets and some procurement-best practices.

The full version of the article is available on the issue 4/2015 of the European Law Reporter.

Centralised purchasing benefits contracting authorities and society in general as it may reduce purchasing prices and transaction costs, lead to administrative economies of scale, and help to create specialised procurement officers across Member States. Centralisation techniques are also used to pursue broader economic goals, such as fostering innovation, create competitive markets and sustain development. Directive 2014/24 reinforces the impulse given to central purchasing bodies due its popularity and establishes two different types: agents or wholesalers. However, the competitive benefits that may be generated by centralisation can also be eroded by its abuse and inadequate implementation, particularly when dynamic efficiency is jeopardised by focusing on pure cost-saving and short term results. This article addresses the benefits and concerns derived from centralised purchasing from a microeconomic and legal perspective and proposes that centralisation should be carried out in a pro-competitive manner with an emphasis on long term efficiency, benefiting all stakeholders, and not purely tender cost saving. To do so, central purchasing bodies and their purchasing power should be regulated by adopting conducts in line with competitive standards and public procurement «best-practices» guaranteeing that buyer power is not abused and the competitive playing field is preserved.