Recovery plan: how can companies access public procurement?

29/09/20
Recovery plan: how can companies access public procurement?

 

Recovery plan is a real boon for companies, even the smallest.

public procurement is going to be extremely significant and much more open than it was before!

 

One third of the recovery plan is reserved for major public works.

This is an unparalleled effort made by the public authorities. It represents 30 billion euros over 2 years, under a two-fold sign:

  • Boosting the employment rate. For the Building and Public Works sector is a strong creator of jobs.
  • The ecological transition, involving energy-efficient renovation of housing, major infrastructure and industrial facilities, etc. Objective: a 57-million-tonne reduction in CO2 emissions.

Public procurement is already playing a major role in France.

It represents 10% of GDP, or €200 billion per year of works. It is therefore a key tool within the recovery plan.

 

A public mandate may originate from the State, but also from local authorities, hospitals… It may concern a project to rebuild a railway line, a public building, etc. For example, when an administration decides to change 600 windows, this represents an order of more than 1 million euros for local SMEs and craftsmen.

 

Access to public procurement has recently been eased, with regulatory and financial adjustments.

Two recent examples are evidence of this.

The decree dated 22 July 2020 raised the threshold above which it is compulsory to tender for public works (from 40,000 to 70,000 euros). In concrete terms, this means that below 70,000 euros, the public player can place an order directly (and therefore more quickly) with a company, without launching a public procurement procedure.

The order dated 17 June 2020 goes in the same direction:

  • It eases companies’ access to public procurement for businesses undergoing recovery plans. These companies can apply for public procurement contracts, whereas before they were excluded.
  • It reserves at least 10% of the overall market for SMEs and craftsmen.
  • It makes the proportion of SMEs present in a candidate’s bid a mandatory selection criterion.
  • It states that companies cannot be selected based on the impact of the crisis on their turnover.

Moreover, treasury advance arrangements have been strengthened: as soon as a company becomes a contractor, it may be granted an advance from the public authorities.

 

Several players can help companies with their procedures:

  • Prefects remain attentive towards supporting companies. In each department, a unit is available to answer any questions companies may have.
  • Professional federations can provide companies with legal experts.
  • Recovery Commissioners have been appointed to implement the recovery plan and support businesses.
  • And other professionals, such as law firms, are obviously working alongside businesses.

 

Several questions still need to be answered.

How long these measures, facilitating access to public procurement, will be lasting? Are they going to be sustainable? The Asap Bill (acceleration and simplification of public action) contains relevant amendments, including the possibility of derogating from the public procurement code in the event of exceptional events (acceleration of State payments, neutralization of late payment penalties, etc.).

 

In addition, a reform of the CCAG (general administrative specifications) is currently under way. It should come into force on April 1, 2021. Will it be integrating social and environmental clauses? This is under discussion. But these clauses could have a cost: more expensive materials, more expensive processes…. The challenge is to reconcile efficiency, simplicity, with social and environmental revival.

 

Finally, the players are today wondering: should we go further and raise the threshold for exemption from public contracts to 100,000 euros?

 

 

To go further