4.5.2.2.  Proposals for more detailed rules on subcontracting

A substantial number of stakeholders consider that existing public procurement rules do not provide sufficient guarantee of fair competition in subcontracting and therefore advocate obligatory tendering in this respect. Other advocates of obligatory tendering argue that large sums of public money are involved in PPPs and that the subcontractors usually assume public duties which should - on principle - be performed by the main contractor himself.

Other stakeholders in favour of more detailed rules say that contracting authorities need to maintain control over subcontracting, implying a right to be informed of the identity of subcontractors and the opportunity to object to the subcontractor.

One stakeholder explains that unless subcontracting is subject to a formal tendering procedure, small and medium-sized enterprises will not take any part in PPPs. Some argue that the subcontracting of substantial parts of the project should in any case be limited, to prevent the whole contract being transferred to subcontractors.

Other stakeholders stress the need for new rules, to avoid undue lowering of social standards when the main contractor awards subcontracts. Such rules should at least prevent the conditions of the contract between the main contractor and the subcontractors from falling below the standard set between the contracting authority and the main contractor. Other rules on subcontracting proposed by stakeholders entail a compulsory minimum share of subcontracts being awarded to SMEs or local companies. Conversely, one stakeholder insists that the choice of SMEs should always be guided by economic, rather than regulatory, obligations.