(De)Centralization of Public Procurement at the Local Level in the EU

Abstract

The so-called decentralization of public procurement in EU Member States is accepted as the most suitable design of the public procurement system, often justifi ed by greater economic effi ciency and by the possibility of boosting the development of small and medium-sized enterprises, which act on the public procurement market as providers of goods, services and works. Despite the existence of highly decentralized public procurement systems which refl ect the decentralization of administrative systems, especially after the recession, there is a stronger tendency for centralization of public procurement in the EU. The so-called aggregation of demand by contracting authorities can be done in order to achieve economies of scale, including lower prices and transaction costs as well as to improve and professionalize the management of procurement procedures (as highlighted in the Directive 2014/24/EU by the European Parliament and the EU Council). However, even in the context of public procurement centralization, local contracting authorities (i.e., public administration authorities and organizations) in Member States should be provided with a suffi ciently wide range of possible (centralized) organizational structures and contractual (vertical and horizontal) public-public partnerships which will allow them to select the most suitable and most economically effective organizational structure for the execution of public procurement.