Introduction to Centralising Public Procurement

Every year 250,000 public authorities in the EU spend around 14 per cent of GDP on the purchase of services, works and goods.1 Some of these authorities are central purchasing bodies (CPBs) who purchase goods and services for other contracting authorities, which have combined their purchasing (aggregated procurement). CPBs play a great role in some EU Member States such as, for example, Denmark, Portugal, Italy, Finland and Sweden and the tendency is gaining traction across different EU Member States. The increased use of CPBs is based on the theory that large procurement volumes generate better prices and increase competition in the market, thus affecting prices and other terms in ways that are favorable for the contracting authority and ultimately for the taxpayers.2 On top of this, the individual contracting authorities will save a significant amount of transaction costs as they do not need to conduct procurement procedures themselves as well as benefitting from the fact that CPBs are often more experienced with procurement procedures (professionalisation). Thus, particularly for contracting authorities, which do not have the capacity to conduct procurement procedures (nor the buying power) for all types of contracts, these agreements can be useful tools in purchasing. Taking the advantages of joint procurement into account, it is not surprising that the Commission also wishes to promote more joint cooperation among contracting authorities.3