Purchasing uncertain or indefinite requirements – guest post by Șerban Filipon

I am delighted to present to How to Crack a Nut readers an outline of my recently published book Framework Agreements, Supplier Lists and Other Public Procurement Tools: Purchasing Uncertain or Indefinite Requirements (Hart Publishing, 2023). It is the result of years of doctoral research in public procurement law and policy at the University of Nottingham, and it incorporates my practical experience as well. After the end of the PhD, I updated and further developed the research for publication as a monograph.

Framework agreements, supplier lists, ID/IQ contracts, dynamic purchasing systems, and other tools of this kind are very widely used throughout the world; and tend to be quite complex too in some respects. Paradoxically, the subject has so far received rather limited attention, particularly when it comes to analysing the phenomenon systematically, across a variety of (very) different public procurement systems and/or international instruments. The book covers this gap, mainly through legal contextual analysis with comparative perspectives.

If in your professional or academic activity you come across questions involving matters of the kind presented below, then you are very likely to benefit from reading and studying this book.

Topics covered in the book

Given the complexity and multiple dimensions of the subject, I have structured some examples of possible questions/matters into a few categories, for illustration purposes, but please take an open and flexible view when going through them (as there is much more covered in the book!).

(A) Regulation and policy

• aspects to consider when regulating (or seeking to improve the regulation of and policy regarding) tools for procurement of recurrent, uncertain, or indefinite requirements, in order to support the wider objectives of your relevant public procurement system, including (where applicable) how such regulation should be integrated with other existing regulation, for instance, with regulation mainly focused on ‘one-off’ purchases;

•  what can be learnt from various procurement systems or international instruments, and how can (certain) approaches or elements in those systems become relevant when regulating your system, including through adaptation and conceptual streamlining;

•  addressing legal review in relation to tools for procurement of recurrent, uncertain, or indefinite requirements.

(B) Regulatory interpretation and application

• how can existing regulation on framework agreements, supplier lists, etc, be interpreted/applied in relation to areas where such regulation is contradictory, inconsistent, or silent;

• to what extent is / should the general procurement regulation (usually relating to ‘one-off’ procurements) be applicable to framework agreements, supplier lists, etc, and addressing ‘grey’ or ambiguous areas in this interaction.

(C) Practice and operations

• designing and planning the type of procurement arrangement (tool) that could be appropriate for specific circumstances, i.e., framework agreement or supplier list, and downstream, the sub-type/configuration of framework or supplier list, and its relevant features (choosing between various possible options), thus supporting procurement portfolio planning and implementation at the purchaser’s level; considerations on operating the designed arrangement;

• what criteria and procedures could be used for awarding call-offs under a framework agreement without reopening competition at call-off stage (and using these in a balanced and appropriate way, depending on circumstances);

• to what extent could a call-off under, say a framework arrangement, consist in a (secondary) framework, the conditions that should be taken into consideration for this approach, and circumstances when it can be useful.

(D) Research, education, and training 

• conceptual realignment, redefining, and adjustment to facilitate understanding of the phenomenon across various public procurement systems that regulate, address and classify (very) differently the arrangements/tools for procurement of uncertain or indefinite requirements;

• taxonomies of potential arrangements, and identifying potential arrangements currently not expressly provided for in regulation;

• conceptual framework for analysing procurement of uncertain or indefinite requirements – across various procurement systems or international instruments, or using a 360-degree perspective concerning a specific system or tool, rather than a perspective confined to a specific procurement system.

Scope of the research

These types of questions give a flavour of what the book does and its approach; certainly the book covers much more and offers an in-depth appreciation of this vital topic across public procurement systems and legal instruments.

To achieve this, and to be of wide relevance throughout the world, this monograph analyses in-depth seven different public procurement systems, using the same structure of analysis. The choice of systems and/or international legal instruments was carefully made to support such relevance, by taking into account a mixture of: legal and administrative traditions; experience with public procurement and public procurement regulation; specific experience in regulating and using procurement tools for recurrent, uncertain, or indefinite requirements; and of objectives pursued through public procurement regulation.

The book thus looks specifically and in context at: the UNCITRAL Model Law on public procurement, the World Bank’s procurement rules and policy for investment project financing, the US federal procurement system, the EU public procurement law and policy, and its transposition in two current EU member states – France and Romania – and the UK pre- and post-Brexit.

Systematic approach

By using the same structure for analysis both vertically (into each relevant tool under each procurement system or legal instrument investigated), as well as transversally, across all tools, systems and legal instruments investigated, the book discovers and reveals a whole ‘universe’ of approaches (current and potential) towards procurement of recurrent, uncertain, or indefinite requirements. The book presents this ‘universe’ in a clear and orderly fashion that is meaningful for readers anywhere in the world, and, on this basis the book articulates a discipline (a conceptual framework) for analysing and addressing the regulation of and policy on procurement of recurrent, uncertain, or indefinite requirements.

The purpose of this newly articulated discipline is both to offer an understanding of the overall phenomenon investigated (within and across the systems and legal instruments analysed in the book), and to enable the design and development of bespoke solutions concerning the regulation, policy, and practice of procurement of recurrent, uncertain, or indefinite requirements. By bespoke solutions in this context, I mean solutions that are relevant to and respond to the specific features and objectives of the procurement system in question or of the specific procurement exercise in question. From this perspective, I consider the book is of interest both for readers working in the procurement systems specifically analysed by the monograph, as well as for readers in many, many other procurement systems worldwide.

Main arguments and findings

With the vast coverage, complexity and variety of systems analysed, the arguments of the book (as well as findings) are multi-dimensional. The main ones are outlined here.

Firstly, I argue that whilst significant developments have occurred in this area of procurement of recurrent, uncertain, or indefinite requirements during the last decades, regulation in all systems / legal instruments analysed continues to be, in various ways and to various degrees, work in progress. To unleash the potential that these arrangements have for enhanced efficiency and effectiveness in public procurement, more balanced regulation is needed, and more work is needed on regulatory, policy as well as implementation matters.

The systems and legal instruments researched by the monograph tend to leave aside various potential configurations of arrangements, either by way of prohibiting them or by not expressly providing for them. Thus, a second main argument I make is that wider categories/configurations (or ranges) of potential arrangements should be expressly permitted in regulation, but subject to further – specifically tailored – regulatory controls and conditions concerning their use. These include procedural and transparency measures (which can be facilitated nowadays thanks to electronic means), as well as legal review and oversight mechanisms designed (and provided for in the relevant legal instrument) to address the specific matters that may arise in preparing and operating arrangements for procurement of uncertain or indefinite requirements.

Certainly, any such expansion of coverage as well as the specific safeguards referred above would be different (and differently approached) from system to system, so as to fit and respond to the relevant procurement context.

With a couple of notable exceptions, a trend in many of the systems or international instruments investigated in the book has reflected reluctance toward recognising and permitting the general use of supplier lists type of arrangements (like qualification systems in the EU utilities sector). The third argument I make here is that this approach is unjustified, and in fact it precludes purchasers from using a tool that can be particularly useful in certain situations if it is subject to appropriate procedural, transparency, and legal review measures, as discussed above.

Conversely – with the notable exception of the UNCITRAL Model Law on public procurement that can be regarded as a benchmark in many respects concerning the regulation of framework arrangements – a rather lax approach seems to govern framework type of arrangements. Regulation in many of the systems investigated in the monograph tend to permit a rather liberal use of framework arrangements, with insufficient conditions and/or controls in various respects, which can affect their beneficial use and/or may foster abuse. However, in other respects, the regulation could be too rigid. So, in addition to the need for more balanced regulation, my fourth argument relates to encouraging the use of framework arrangements for security of supply, and for planning for and responding to crises (catastrophic events), rather than mainly (just) for aggregation of (recurrent) demand, economies of scale, and administrative convenience.

Finally, I argue that all the above can be significantly supported by developing a specific area of public procurement regulation, to address – expressly, systematically, and directly – the complexities and features of procuring uncertain or indefinite requirements. In contrast, so far, the procurement systems / legal instruments analysed tend to address many issues arising from procurement of recurrent, uncertain, or indefinite requirements, indirectly through the lenses of ‘one-off’ procurements, by way of exception – or by implication – from the rules on ‘one-off’ procurements.

In my view, fundamental changes in approaching regulation and policy of framework arrangements and supplier lists in public procurement are strongly needed, as explained above. The sooner they occur, the better the chances for improvement in efficiency and effectiveness in and through public procurement.

For those wishing to deepen their understanding of this area, I am very pleased to attach here a voucher that provides a 20% discount of the book price. The book can be ordered using this link (and inserting the relevant discount code shown in the voucher.

I wish you an enjoyable and, most importantly, useful reading!

Șerban Filipon

Șerban Filipon

With over 20 years of international experience in public procurement professional consulting services, including procurement reform, capacity building, and implementation, as well as in procurement management and research, Șerban Filipon (MCIPS) holds a PhD in public procurement law from the University of Nottingham, UK (2018), and an MSc in Procurement Management awarded with distinction by the University of Strathclyde, UK (2006).

Șerban Filipon is senior procurement consultant.

EU law-making in the shadow of the CJEU case law: looking at the “trilogue” black box

This blog first appeared in Elgar Blog on 7 December 2016 as part of our promotion of the recently published book Grith Skovgaard Ølykke and Albert Sanchez-Graells (eds), Reformation or Deformation of the EU Public Procurement Rules (Edward Elgar, 2016). You can now also read Chapter 1: The EU legislative process. An introduction from a political science perspective free on Elgaronline.

After six decades of economic and legal integration, when the European Union (EU) seeks to adopt new rules or to revise existing ones, it hardly ever operates on a clean slate. EU law-making is not only constrained by the political and economic realities of the time, but also by the pre-existing acquis communautaire of rules and general principles as interpreted by the Court of Justice of the European Union (CJEU). By any account, the CJEU has been a great force in the development of EU law, and its case law has pushed the policy-making agenda in rather clear, if controversial ways. EU law-makers thus operate in the shadow of the CJEU case law. This influences law-makers’ starting points and conditions the final solutions to be politically agreed, which will unavoidably be open to scrutiny (and quashing) by the CJEU.

In that space amongst the shadows of the CJEU case law, EU law-makers interact in an increasingly informal manner. They seek ways of flexibilising the legislative process so as to achieve easier and swifter compromises and overcome the criticism of immobilism, sometimes at the cost of renewed criticism of a democratic deficit that the Lisbon Treaty aimed to do away with. Indeed, even if the ordinary legislative procedure is heavily regulated by the EU Treaties and should channel most of the EU’s law-making, informal EU law-making is on the rise. As recently as July 2016, this led the European Ombudsman to call for more transparency of informal negotiations between the European Commission, European Parliament and the Council of the EU, also known as “trilogues” meetings.

It is no exaggeration to say that such “trilogues” are the black box of EU law-making. Under their current operation, it is possible to observe what comes in—legislative proposals are published by the Commission and initial reports by both Council and Parliament are also published—and what comes out of it—in the form of legislation eventually published in the Official Journal of the European Union. But, even after carrying out significant research efforts, it is impossible to crack what happens within the black box and to trace the origin and reasons behind important amendments to proposed legislation, as well as the way in which the final text is drafted.

This creates potential legal uncertainty in terms of the likely interpretation of the texts, which sometimes deviate from previous case law of the CJEU in unexplained ways. It also makes for difficult political assessments of the balance of interests that went into EU law-making and the weight that competing EU, national and group interests carried in shaping the new or revised rules. It can also significantly diminish the technical quality of the final rules, particularly where the trilogues are structured in sequence or address issues in a piece meal fashion, which prevents a final check for internal consistency and eventually leads to difficult systematic interpretation issues.

The case study of the reform of the EU public procurement rules in the period 2011-2014 clearly evidences these issues. The results of our two year research project, now published as Reformation or Deformation of the EU Public Procurement Rules, show both that the entirety of the legislative process was influenced by the CJEU case law, and that some of the most remarkable modifications of the pre-existing EU public procurement rules came about in an unexplained way at trilogue stage. As Dr Grith Skovgaard Ølykke and I stress in our conclusions,

The informal part of the procedure taking place between the 2011 Proposal and the first reading and adoption of the 2014 Directive prevented a repetition of the lengthy process of adopting the 2004 Directive (four years and a full-fledged ordinary legislative procedure, several amended proposals, conciliation and all). However, the early retreat to the trilogue and, hence, informality, significantly reduced transparency compared to that available in the legislative procedure leading to the adoption of the 2004 Directive, where e.g. the amended proposals contain the Commission’s argumentation for accepting proposed amendments or not.

… this still does not clarify the role and influence of the Commission in the post-Lisbon trilogue … Indeed, as stressed by the [European] Parliament itself, ‘given the Commission’s important and active role during Council working party (and even COREPER) discussions, its status as “honest broker” during trilogue negotiations is sometimes questioned in practice’.

A close analysis of the results of our research project helps gain a better understanding of the influence of the CJEU case law in EU law-making, both shaping it and as a benchmark from which policy-makers sometimes try very hard to deviate. However, the results of the research project also stress the limitations of an analysis of the travaux preparatoires and the negotiations throughout the legislative process when important changes and their reasons cannot be observed because they took place in the trilogue black box.

These insights will be interesting in guiding legal interpretive efforts, both in the area of EU public procurement law and more broadly. They will also be high quality and detailed evidence of the need to reform the way trilogues operate, both from a perspective of ensuring high standards of governance through accountability and transparency as stressed by the European Ombudsman, as well as from the perspective of preserving the value of interpretive aids in the context of an ever increasingly complex acquis communautaire.

Something to feel proud of

I just came back from my holidays and found my copy of V Kosta, N Skoutaris and V P Tzevelekos (eds), The EU Accession to the ECHR (Oxford: Hart Publishing, 2014). The book is the reworked compilation of some of the papers presented at a conference in Brussels in November 2012, plus other interesting contributions. I also contribute a chapter on corporate fair trial rights  and competition law enforcement that was already available through SSRN. In the words of the editors:

Article 6 of the Treaty on European Union (TEU) provides that the EU will accede to the system of human rights protection of the European Convention on Human Rights (ECHR). Protocol No 9 in the Treaty of Lisbon opens the way for accession. This represents a major change in the relationship between two organisations that have co-operated closely in the past, though the ECHR has hitherto exercised only an indirect constitutional control over the EU legal order through scrutiny of EU Member States. The accession of the EU to the ECHR is expected to put an end to the informal dialogue, and allegedly also competition between the two regimes in Europe and to establish formal (both normative and institutional) hierarchies.

In this new era, some old problems will be solved and new ones will appear. Questions of autonomy and independence, of attribution and allocation of responsibility, of co-operation, and legal pluralism will all arise, with consequences for the protection of human rights in Europe.

This book seeks to understand how relations between the two organisations are likely to evolve after accession, and whether this new model will bring more coherence in European human rights protection. The book analyses from several different, yet interconnected, points of view and relevant practice the draft Accession Agreement, shedding light on future developments in the ECHR and beyond. Contributions in the book span classic public international law, EU law and the law of the ECHR, and are written by a mix of legal and non-legal experts from academia and practice.

Looking at the contents of the book, I am truly impressed. And it seems that I am not the only one:

"This book will be essential reading for all those interested in the future judicial and legal organisation of Europe. The editors, the contributors and the publishers are all to be warmly congratulated on a splendid achievement in legal scholarship" From the foreword by Francis G Jacobs.

This is definitely something to be proud of. I hope other research projects will be similarly succesful.