Looking at the OJEU financial thresholds process

Financial thresholds - Integrated currencies and legislation

Like much of the legislation and directives around the European tendering sector, the rather dry language used in much of the documentation can render it rather difficult for alot of businesses to comprehend. Like all legal language however, it can be broken down into terminology that anyone can understand – its just that no-one really ever does it, therefore we thought we’d trawl through various websites and blogs give it a go.

What is a threshold?

Threshold, Definition: (from The Free Dictionary)

The place or point of beginning; the outset.

Of course, in terms of tendering for contracts, thresholds apply to the financial aspects of any particular tender. These thresholds define whether or not a contract opportunity must be published in the OJEU (Official Journal of the European Union).

Procurement directives from the European Union (guidance PDF) stipulate that public sector organisations, as well as private companies operating in the water, energy, transport and postal services (collectively referred to as Utilities), have to publish OJEU notices advertising that a competitive tendering process for a particular contract is underway.

However, due to the sheer number of tenders offered on a daily basis throughout Europe, forcing each of these to publish in the OJEU would be an administrative nightmare and impossible to keep track of. Therefore, legislators within the EU set a series of financial thresholds, above which it is required for a contract opportunity to be advertised.

Yet more acronyms become involved…….

Things get complicated when external bodies outwith the EU become involved. Essentially, the OJEU thresholds are updated every two years in line with World Trade Organisation legislation (the Government Procurement Agreement – GPA) – to which the European Union is a signatory. Confusingly, whilst European legislation sets out the thresholds in Euro currency, the GPA defines them in the form of something known as Special Drawing Rights (SDRs).

(Deep breath). SDRs are an asset established by the International Monetary Fund (IMF) – sorry yet another acronym.  SDR value fluctuates on a daily basis and is based on the relative values of the Euro, Sterling, Japanese yen, and the US dollar. The bi-annual updates to the EU thresholds factor in relative movement between the SDR and the Euro (see the document here). Obviously for those outwith the Eurozone (i.e. the UK) there has to be a further alteration to the figures in order to bring them into line with the new threshold levels – luckily some legal minds at the EU publish these for our benefit (PDF). (Breathe out).

What are the current OJEU thresholds?

Public contracts from January 2010

	SUPPLIES	SERVICES	WORKS
Schedule 1 entires	£101,323 (€125,000)	£101,3232 (€125,000)	£3,927,260 (€4,845,000)
Other public sector contracting authorities	£156,442 (€193,000)	£156,442 (€193,000)	£3,927,260 (€4,845,000)
Indicative Notices	£607,935 (€750,000)	£607,935 (€750,000)	£3,927,260 (€4,845,000)
Small lots	£64,846 (€80,000)	£64,846 (€80,000)	£810,580 (€1,000,000)

Utilities contract thresholds from January 2010

	SUPPLIES	SERVICES	WORKS
All sectors	£313,694 (€387,000)	£313,694 (€387,000)	£3,927,260 (€4,845,000)
Indicative Notices	£607,935 (€750,000)	£607,935 (€750,000)	£3,927,260 (€4,845,000)
Small lots	£64,846 (€80,000)	£64,846 (€80,000)	£810,580 (€1,000,000)

There are exceptions to these thresholds, each of the following have a threshold of £156,442 (€193,000).

• Part B (residual) services
• Research & Development Services
• Television and Radio Broadcast services
• Interconnection services
• Integrated telecommunications services

Thanks very much for persevering with this post, the threshold issue is rather complex – we hope that things are slightly clearer. If there are any other resources which you feel could be useful is helping us to understand this issue then please point us in the right direction.

Reaction to first EU president van Rompuy

Last week the EU elected its first president Herman van Rompuy, and needless to say in as complex a continent as Europe, the reaction to his ascencion has been mixed to say the least.

 

He was endorsed by most of the top leaders within the EU:

Gordon Brown, UK Prime Minister:

He has a reputation for integrity and resolve and… his qualities as a diplomat, as a statesman and as a negotiator will be qualities that he can bring to the European Council and to his new position as president.

Nicolas Sarkozy, French President

He is a man who is profoundly European and I believe it is a very wise decision to have chosen as the first stable president of the council a man who comes from a founding country of the European Union.

Jose Manuel Barroso, EC President

I think it will be impossible to have a better choice. It is also a tribute to Belgium. When selecting the current Belgian prime minister, a man of great qualities as Herman van Rompuy, I think the European [Union] also expressed its gratitude for the work of Belgium and the constant support that this country at the heart of Europe has been giving to our common project.

Fredrik Reinfeldt, Swedish Prime Minister

The idea is to have a leader of the (EU) council… who actually gives room for everyone, who listens to everyone, who creates winners not losers.

 

President who? – The media reaction

The Independent seemed to summarise effectively the typical reaction from the media/blogosphere – Herman who? The world greets new EU President

The EU Observer – Van Rompuy – Van Who?

The Wall Street Journal had an interesting US take on matters:

……..the appointments last week ……….. to those posts seem calculated to say as little as possible.

 

So there we go, essentially it seems that the election of van Rompuy was designed to be as uncontroversial as possible – whether or not this lack of profile will continue is another matter – the new president is already making some waves with his ‘Euro Tax’ proposal.

What is your reaction to the appointment of a President of the EU? Will it make any difference to the functioning of the European Union?, and will business development within the EU be affected in any way? We welcome your opinions…….

 

Should The OJEU Be Reformed? – Poll

The UK Conservative Party  has said that it is working on a proposal to overhaul the OJEU procurement process,  they wish to (in their words) make it more open.

See the original Architects Journal article for more information.

What do you, as business owners who have to work within the OJEU process think? Are the Conservatives correct to call for refrom of the OJEU processes? or is the system fine the way it is? Please vote in our poll……….

Hope As Eurozone Climbs Out Of Recession

There was some collective economic hope around the continent of Europe today as figures emerged detailing growth in the Eurozone economy between July and September. The 16 nations that operate under the euro grew 0.4%, after shrinking by 0.2% between April and June. The EU as a whole, including non-eurozone countries (including the UK and Sweden) – also grew 0.2% in the third quarter of 2009.

However, there are still questions as to whether this growth is sustainable as the French and German economies grew less than expected.

There is already a great deal of reaction to these figures available from many sources online:

Eurozone escapes recession – Financial Times

BBC News – Eurozone emerges from recession

Yahoo News – Eurozone emerges from recession in 3rd quarter

The Euro Zone grows again | The Big Picture

Eurozone Finally Growing Again (0.4%), But France And Germany …

Eurozone GDP Breaks Through Zero… Concerns Still There

Forex Traders » European Market Update: Euro-Zone moves out of Recession

 

What is your opinion of this news? Is this a sign of a long term sustained recovery throughout Europe in 2010?