In Sweden, all-new legislation on procurement in the public sector will take effect on 1 January. The fact that it is all new may seem daunting but we should instead see this as a shift forward creating greater opportunities in a complex area. Also, the changes aren’t perhaps as dramatic as they seem compared to existing legislation. That’s for better or for worse, and in some cases there was a desire for the legislator to be slightly more aggressive and bold.
WHAT IS NEW CAN BE SUMMARISED AS FOLLOWS:
- Increased scope for negotiation and dialogue with suppliers
- Procurement is to be conducted electronically
- Periods for advertising and tendering have been generally shortened
- Testing of suppliers, heightened legal requirements (offence under the law) for exclusion, and more responsibility placed on suppliers to conduct self-assessment (“preliminary self-declaration”) and option of “self-regulation”.
- The classification into A and B services is scrapped.
- A new procurement mode is introduced, “Innovation Procurement”.
CLARIFIED
What should we think of this? Well, people wanted the legislator to go a little further and abolish the main rule of an open and selective procedure. It would have been better to make modes of procurement above the thresholds more neutral, relative to each other. The desire for a nudge towards negotiation and dialogue could have been made clear earlier in the legislation. The fact that we are now retaining the main options as a main rule risks making permanent the lock-in effect that has prevailed. Practically no-one reads the preamble to a legal document or takes notice of political manoeuvring before accepted practice is established by legal precedence. Many procurement executives are still likely to be inclined to “play it safe” and avoid making mistakes. But the intention of the new legislation is very clear that negotiation and dialogue should always be considered during, for example, complex IT and ICT procurements.
ELECTRONIC PROCUREMENT IS THE RULE
It is not just a trend over time that procurement has to be conducted electronically and this has become part of legislation. It may also be said to be a step towards securing the principles of public procurement and moving away from paper and oral subjectivity. With electronic procurement, e-mail is still OK and clearly superior than relying on the postal service, for example, not just in Sweden but throughout the EU. However, there is no getting away from the fact that electronic media and digitised processing creates efficiencies and more equal treatment of suppliers. Telemanagement supports this change, as the procedure is predetermined, so to speak, and more focus can be trained on strategy, objectives and procurement procedure, rather than formalities.
REASONABLE TIME NEEDED
The fact that periods of time have generally been reduced is good. Public procurement exercises have generally been considered to be long-winded. However, as we at Telemanagement usually say, “it depends”. You cannot compare buying standardised staple goods with complex IT and ICT procurement, where a whole range of parameters have to be taken into account. By and large, shorter times are welcome, but to create “good business” you have to take into account that suppliers must be given reasonable time, enough time but not more than necessary, to reply to an invitation to tender. The aim should always be to strike a balance so that the procuring party gets good-quality – and sufficient numbers of – tenders but also so that suppliers feel that it is worthwhile to work on and have reasonable time to prepare an attractive tender that may land the deal.
New legislation includes more grounds for exclusion. What has now been added is provisions on giving aid to terrorism and human trafficking. This is in essence to be welcomed and makes the whole situation clearer and better defined. The only negative aspect may be that the procuring party is under a duty to check before awarding a contract. This, we feel may be a little reactive.
NEW CONCEPT – SOCIAL SERVICES
Concerning the old division into A and B services, there were problems in the way that A and B services were interpreted. In some cases, it was difficult to decide where to draw the line. A new concept – “social services” – has been introduced, in which such services are for practical reasons not suitable for procurement outside national borders, even if above the thresholds for contracts. The services concerned include, for example, health care and certain training services. Telemanagement supports the change, as more of an alignment with the view that soft services may also be delivered with the aid of technological developments from another country, promoting competition in the market. For example, simple diagnosis and prescription renewal may be performed by a qualified doctor using a “Doctor app” from any country whatsoever in the EU.
DIALOGUE AND NEGOTIATION
As part of a move to create greater opportunities for dialogue and negotiation, we now have a new procurement mode, “Innovation Procurement”. Simply described, this mode approximates to “competitive dialogue”, but takes a step further with an aspiration at both national and EU level to boost development and efficiency in the public sector. In simplified, general terms it may be said that competitive dialogue is more “boxed-in” – people know that a “system” is needed with certain functions that may need to be developed – whereas with innovation procurement there may be “problems” that have to be solved, without it being clear how.
Telemanagement supports the new procurement mode and the possibility of more openings for dialogue with suppliers, dispelling the notion “that it is dangerous to talk to suppliers”, and providing more support to forward-looking suppliers. This applies not least to the area of IT and ICT, where development and technology move fast and where there may be more than one way to solve a problem. However, what remains as always is to await the emergence of accepted practice in this procurement mode, but also to be a little more bold and to challenge.
THE NEW LAW – A STEP IN THE RIGHT DIRECTION
To summarise, we find that the new legislation is a step in the right direction, above all when it comes to the possibility of dialogue and negotiation. This will be beneficial in terms of the complexity in IT and ICT procurement. However, we agree with leading lawyers that the modes of procurement could have been made more neutral to prevent them becoming an obstacle – “a challenge” – for young procurement personnel despite high-level qualification in the sector. Also, there must be an understanding of the driving forces in and fundamental principles of legislation in public administration. To make progress you have to challenge a little and testing is a natural part of establishing new legislation. Formalities and adhering to formalities are quite important, but it is also important at times to test the limits to attain organisational goals. New legislation should therefore be seen as an opportunity and not a hindrance. The legislator is leaving quite a lot to the market and the legal system in terms of establishing accepted practice, and that’s how it should be in a democracy.
Mikael Roth, Procurement
Program Manager, IT Sourcing