Selling to the Government in Spain

A Hot Tip about Government Procurement in Spain

Posted on: 24 Feb 2010

Government procurement follows the principle of best value through competition. There is no official domestic preference policy, or discrimination against foreign suppliers, although the Spanish Government encourages “full and fair opportunity” for Spanish suppliers.

 

In Spain, all levels of administration -- central government, autonomous communities, municipalities and companies that have over 50 percent government ownership -- have to follow certain procurement practices as regulated by the new Law of Contracts of the Public Sector, Law 30/2007 of October 30.

 

The authorities allowed to contract or obligate funds on behalf of the Government are:

- Central Government: Ministers and State Secretaries.

- Autonomous Communities: Legal representatives as established by the local government (usually a member of the cabinet).

- Municipalities: the Mayor or any other formally designated official.

- State-owned companies: the Chief Executive Officer.

 

The procedure to bid for a specific tender is relatively straightforward. All proposals are kept confidential and must be accompanied by proper documentation. This information should include:

- Accreditation of the legal representation used by the company.

- Proof of economic and financial solvency and technical or professional competence plus a declaration that the company is not prohibited from contracting.

- Proof that a provisional guarantee, as required by the conditions of participation, has been deposited.

- For foreign companies, formal acceptance of the jurisdiction of the Spanish courts if necessary.

- Accreditation of having met all fiscal and social security obligations.

 

U.S. companies have to comply with the Spanish Public Sector Procurement Law (Ley de Contratos del Sector Público.

 

Although procurement decisions are made at the respective department or agency level, the Spanish Sub-Directorate of Purchasing has released a centralized bidding mechanism that incorporates an on-line register for bidders and open bids, valid for some categories of products (computers, vehicles, office equipment, heating).

 

EU Procurement

The EU public procurement market, including EU institutions and Member States, totals around EUR 1,600 billion (USD 2,340 billion). This market is regulated by two Directives:

• Directive 2004/18 on Coordination of procedures for the award of public works, services and supplies contracts, and

• Directive 2004/17 on Coordination of procedures of entities operating in the Utilities sector, which covers the following sectors: water, energy, transport and postal services.

 

Remedies directives cover legal means for companies who face discriminatory public procurement practices. These directives are implemented in the national procurement legislation of the 27 EU Member States.

 

The US and the EU are signatories of the World Trade Organization’s (WTO) Government Procurement Agreement (GPA), which grants access to most public supplies and some services and works contracts published by national procuring authorities of the countries that are parties to the Agreement. In practice, this means that U.S.-based companies are eligible to bid on supplies contracts from European public contracting authorities above the agreed thresholds.

 

However, there are restrictions for U.S. suppliers in the EU utilities sector both in the EU Utilities Directive and in the EU coverage of the Government Procurement Agreement (GPA). The Utilities Directive allows EU contracting authorities in these sectors to either reject non-EU bids where the proportion of goods originating in non-EU countries exceeds 50 percent of the total value of the goods constituting the tender, or be entitled to apply a 3 percent price difference to non-EU bids in order to give preference to the EU bid. These restrictions are applied when no reciprocal access for EU companies in the U.S. market is offered. Those restrictions however were waived for the electricity sector.

 

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Posted: 24 February 2010

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