E. Manunza

Social Services of General Interest and the EU Public Procurement Rules

Social services of general interest are typically services which are not simply ‘purchased’ by public authorities from third parties against remuneration. Public authorities always retain the prerogative to decide whether they wish to provide a service themselves, either by using their own resources, through an in-house construction or in cooperation with other public authorities. It is also possible to distribute licenses or (limited) authorisations to private parties, award a service concession or grant an exclusive right for the performance of social services. This means that public authorities have extensive possibilities to provide social services in such a way that the Public Procurement Directive 2004/18/EC is not applicable, although they might have to take into account certain competitive obligations formulated by the European Court of Justice. The result is a fragmented legal framework, which is not conducive to compliance. This chapter discusses this legal framework in the context of the renewed interest in the public procurement market caused by a number of changes contained in the Lisbon Treaty as well as by the economic and sovereign debt crisis. In addition, the latest Commission proposals for the revision of the current public procurement directives, which form part of the Commission’s initiative to relaunch the single market, will be discussed briefly. The proposals emphasise that Member States can specify that the choice of providers of social services may not be based on price considerations alone but should also include specific quality criteria. This is a good step in the direction of a public procurement regime which is not so much based on price competition but focuses more on competition based on quality. Finally, the authors argue that an objective test should be introduced to assess the decision of a public authority to perform an activity itself or to externalise it to a third party. Such a test would force public authorities to take this decision on objective, transparent, proportionate grounds resulting in enhanced predictability, which is in the interest of public authorities themselves, as well as in the interest of citizens and service providers.