Report: 'Contracting authorities must take exit costs into account'
Public administrations that are procuring IT services and software must add to the budget plan the exit costs needed to move to alternative IT solutions after the end of the contract period. That is one of the recommendations by Open Forum Europe, an organisation advocating the use of open standards in ICT, in a report on procurement published this Monday.
By not taking into account these exit costs, public administrations "allow inefficient suppliers to remain in the market", the lobby group writes in its 'Monitoring Report on the European IT procurement market.
OFE: "It may persuade contracting authorities to apply exceptional awarding procedures to extend existing contracts, instead of inviting other economic operators to bid. As derogations of the principles of competition, these procedures should only be applicable under exceptional circumstances."
The group also recommends that European procurement rules take into account discriminatory practices that happen in the procurement market. "The EU decision-makers have to take a series of measures to open up public procurement to all economic operators, including small and medium-sized enterprises, by removing artificial obstacles and improving procedures and encouraging the widest possible participation. By ensuring that procurement policies and processes do not discriminate against certain types of business models or suppliers, the existing barriers to entry will be reduced."
Procuring lock-in
OFE has looked in detail at a sample of six hundred of the many thousands of public procurement notices that were posted on the EU's Tenders Electronic Daily website (TED) between 1 October and 31 December 2011. It concludes that 16 percent of the tenders published in that period made specific reference to a supplier's trademark, and by doing so break the procurement rules.
The advocacy group says this is a worrying number. "This report clearly shows that there is a EU-wide level practice of contracting authorities making reference to specific trademarks when seeking to purchase IT supplies, this is merely the 'tip of the iceberg'."
Public procurement accounts for nearly 20 percent of the EU's gross domestic product – around 2.2 trillion euro, OFE cites Eurostat figures from 2009. The group calls on the public sector to procure applications and services that interoperate and that do not lock-in customers to single-vendor technologies.
"Our monitoring exercises suggest that, although EU public procurement rules demand that contracting authorities treat their vendors equally and non-discriminatory; act transparently; not draw up technical specifications in such a way as to exclude products that meet their requirements; and refrain from referring to a specific make, source, or process; explicit references to brands are still made."
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