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Working Group on Auction Design
and Competitive Issues
Rome, December 13th 2004
Matteo Zanza, Consip
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Rome, December 13th 2004
Agenda
Final Report already presented in Stockholm
31 Institutions 19 sent back the Questionnaire
Some deeper information and new points:
2
1.
Governance of Institutions
2.
Analysis of Purchased Value over Total Public Procurement
3.
Online Auctions
4.
Abnormally Low Offers
Rome, December 13th 2004
Institutions classified
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Governance
Organisation
Institutions
Large Administrations
ESPA (Romania)
French Ministry of Economy, Finance and Industry
Administration of State Material Reserves (Czech Republic)
Greek Ministry of Development
Central Purchasing Bodies
ABA (Belgium)
BBG (Austria)
BESCHA (Germany)
Consip (Italy)
Malta Department of Contract
SKI A/S (Denmark)
OGC (UK)
Statskontoret (Sweden)
Authorities
Hungarian Council for Public Procurement
Irish Department of Finance
Polish Public Procurement Office
Slovakian Office of Commissioner for Access to Public
Information
Slovenian Office for Public Procurement
MINHAC (Spain)
Public Procurement Directorate of Cyprus
Turkish Public Procurement Authority
Rome, December 13th 2004
Purchased Value as percentage of Total Public Procurement
To compare different Purchasing Bodies on the basis of their
activity
Purchased Value as Percentage of Total Public Procurement
1,83%
1,56%
1,27%
1,02%
0,85%
0,12%
0,04%
(Austria)
BBG
(Belgium)
ABA
SKI A/S
(Germany)
(Denmark)
SKI A/S (Denmark)
BESCHA
(Italy)
Consip
(Sweden)
Statskontoret
(UK)
OGCbuy.solution
Fonts:
GDP: Eurostat;
Total Public Procurement as % of GDP: EU Report 2004;
Purchased Value: Questionnaires
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Rome, December 13th 2004
Online Auctions
7 institutions applied this procedure
Three different formats have been applied
1.
2.
3.
Sealed Bid auction
Descending auction (reverse auction)
Multiple round descending auction
Below or above thresholds?
5 Institutions performed them both below or above the thresholds
Useful tool to improve the procurement performances
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Rome, December 13th 2004
Abnormally Low Tender
1/2
Article 51 of the 2004 EU Directive states that “If, for a given
contract, tenders appear to be abnormally low in relation to the
goods, works or services, the contracting authority shall, before
it may reject those tenders, request in writing details of the
constituent elements of the tender which it considers relevant”.
The Directive defines then which details should be taken into
account by the contracting authority.
When a tender presents an abnormally low price compared to
others tenders, market prices or institution own costs estimation.
The contracting authority shall be obliged to invite the tenderer
to explain his price quotation.
If the firm is not able to justify its offer the latter is considered
abnormally low and so rejected.
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Rome, December 13th 2004
Abnormally Low Tender
2/2
BESCHA, Consip and the Turkish Public Procurement Authority
follow three different additional criteria to identify those firms
that have to motivate their offer.
Consip
If the offer presents a discount lower than 20% of the
arithmetical mean of the all discounts considered valid.
BESCHA
If the offer presents more than 20% deviation from the
second best price.
Turkish
Public
Procurement
Authority
(work contracts)
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If the offer is below of a defined Boundary value
obtained multiplying a certain value “K” by the
“Estimated cost” of the contract.
To have the “K” value, the contracting authority has to
calculate the ratio between the arithmetical mean of the
tenders (tenders 120% above or 40% below of the
“estimated cost” are not taken into account) and the
“Estimated cost”. To any value of this ratio between 1.2
and 0.4 there is a correspondent “K” value.
Rome, December 13th 2004
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Rome, December 13th 2004
Turkish Formula
Tenders which are over 120% and under 40% of estimated cost are not
taken into concentration while calculating the means of the tenders.
1. By dividing the mean by estimated cost the value “C” is obtained
2. By using the table below, “K” is obtained
3. By multiplying the “K” by estimated value, we obtain the boundary value
AT = The arithmetic mean of valid tenders
EC = Estimated cost calculated by the contracting entity
C = AT /EC
Boundary Value = K*EC
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C=AT/EC
K
1,20
0,800
1,00
0,800
0,90
0,766
0,80
0,723
0,70
0,671
0,60
0,610
0,50
0,538
0,40
0,454
Rome, December 13th 2004
Domestic GDP
2003 GDP
2.500.000
Million of Euro
2.000.000
1.500.000
1.000.000
500.000
0
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BBG
ABA
SKI A/S (Denmark)
BESCHA
Min. of Dev.
(Greece)
Consip
Statskontoret
OGCbuy.solution
Austria
Belgium
Denmark
Germany
Grecia
Italy
Sw eden
UK
Rome, December 13th 2004
Total Public Procurement
I.e. Purchasing of goods, services and works by governments
2002 Total Public Procurement
400.000
350.000
300.000
250.000
200.000
150.000
100.000
50.000
0
Austria
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Belgium
Denmark
Germany
Grecia
Italy
Sweden
UK
Rome, December 13th 2004
Purchased Value
2003 Purchsed Value
3.000
Million of Euro
2.500
2.000
1.500
1.000
500
0
BBG
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ABA
SKI A/S
(Denmark)
BESCHA
Min. of Dev.
(Greece)
Consip
Statskontoret
OGCbuy.solution
Rome, December 13th 2004