Regulaton & Policy
Round-up of Sessions From the Early Career Procurement Researcher Event

We have featured a number of articles around the recent early career procurement researcher event in London, organised by Dr Pedro Telles (for example, see our overall report of the event here).

We have two more posts for you this week, where we will just briefly round-up the other sessions that we have not already covered. That does not mean these presentations or research topics were less interesting than the ones we have featured more fully. In some cases, the research is at an early stage so there is less to write about at the moment; in other cases, I may just have found my notes were not good enough to write 600 words! In addition, by the end of the day, I was wilting a little – it was quite intellectually intense, so if I am not doing justice to anyone’s work, I do apologise. And perhaps we will have the chance to cover the research again at a later date.

Franco Peirone: Competing anti-corruption strategies: Organisational and contractual models

Peirone is a post-doctoral researcher at the Department of Business and Enterprise at the University of Piemonte Orientale (Novara, Italy). He is looking at corruption in public procurement; for example, via collusion between buyer and seller. Wrongdoing, he says, will always occur in economic operators – what matters is how we handle it e.g. though compliance tools, such as exclusion from awards or competitions.

In general, there are two main strategies for fighting corruption – bonding and monitoring. “Bonding” includes criminal law provisions and procurement law integrity requirements.  Peirone made some interesting points about the difference between US and European approaches. In Europe, we can exclude operators for corruption but even then they may escape if the organisation has adopted self-cleaning. This is an after-the -event approach, whereas in the US, often firms have to show they have anti-corruption measures in place before they can even bid for the contract.

 

Aris Chirstidis: Ineffective contracts under the Pub Contracts Regs 2015

Christidis is working towards his PhD in Law at the University of Nottingham in the heart of England. His presentation focused on the issue of contracts that are “ineffective” and may be terminated. He explained that generally, the assumption has been in most cases that even if there was a breach of the procurement regulations that would not lead to termination of existing contracts.

However, more recently, unilateral termination has become possible – member states can empower contracting authorities to terminate if certain violations take place. There are now detailed procedural rules around “ineffectiveness”; the main reason for the Commission tightening up in this area is to have the ability to terminate illegal direct awards and restore competition. So awarding a disadvantaged bidder damages would not be enough in such cases.

Christidis asked whether it Is it possible for the contractor to claim legal damages if the contract is terminated – that would seem to be precluded by the concept of the ineffectiveness remedy. It would not be right for damages to be paid to the contractor given it was an “illegal” award is the first place! In the UK, if contracts are rendered void, they are unenforceable so damages could not apply. That is true regardless of who was at fault, and whether the contractor was aware of the violation or not. But the court could order damages for financial loss for instance if the behaviour of the buyer caused civil liability – and the contractor could be compensated where work has already been done. As you can see, there are some pretty deep and complicated legal issues here!

 

Jussi Pyykkonen: Analysing social networks of public procurement processes

Pyykkonen works for the Finnish government central procurement unit, and is also a researcher and Masters student. He is applying network theory to look at some of the oldest questions in the procurement book – how do we organise procurement, how centralised should it be, and how does the function work with internal stakeholders. He has examined a case study – a procurement programme relating to the purchase of an important software system. How did the various players interact? And who should lead? Is it procurement or other business users and stakeholders? Interesting questions and we look forward to seeing more of his work.

 

Maria Fuentes: European limits to the modification of concluded contracts focusing on review clauses

Fuentes, who has recently submitted her PhD thesis at Copenhagen University, argued that modification of contracts for reasons of corruption is prevalent in many countries. An anti-corruption report from Austria in 2014 for example gave many example of corruption based on amending existing contracts. So the 2014 EU directives attempt to make it much clearer under which situations and how you can make modifications. Fuentes is focusing on issues including the use of contractual review clauses and options, and understanding the conditions under which modifications are possible. Contracting authorities have a clearer definition now of what is acceptable but will have to proceed with caution was her message.

More tomorrow when we will summarise the remaining presentations from the event.