If you supply, or plan to supply, public sector organisations with goods and services are you aware that there are changes to the EU Public Procurement regulations being implemented?
We have summarised for you the key changes which may impact how you tender with such organisations.
The European Commission, after extensive public consultation, has recently published its proposals for simplifying and modernising, public procurement. It is not expected that the proposals will become law in the UK before June or July 2014.
The changes will apply to procurements beginning after the date of implementation – and so are not being enforced retrospectively.
The following information details the proposed changes, some of which could be quite significant for public sector organisations and therefore impact suppliers tendering to the public sector.
Part A and Part B Services
Under the current regime, services contracts are split into ‘Part A’ (priority) services, which are fully regulated by the procurement regulations, and ‘Part B’ (residual) services, which can be procured using less formal means.
The new directive will abolish this distinction. Apart from certain low-value contracts relating to health and social services, all services contracts, which are over the financial thresholds, will need to be procured formally with an OJEU contract notice. This includes legal services.
The ability to submit contract notices online and to download tender documentation following publication of a notice will increase accessibility and streamline the tender process. Many public sector organisations already conduct their tenders in this way, but this should become more widespread.
Benefits for SMEs
The new rules are intended to encourage the engagement of smaller businesses through various initiatives. Currently very large contracts can, in many cases, only be handled by very large contractors. To help open up the market to SME’s there will be a new presumption that large contracts should be divided into lots when this makes sense.
When procuring contracts worth over €500,000, public authorities will have to explain why they consider that smaller lots are not appropriate.
Many SME’s operate as subcontractors to a main contractor. Recognising that the main contractor may not pay invoices as quickly as public authorities, the new rules will allow direct payments to subcontractors.
Other than in exceptional circumstances, contracting authorities will now no longer be able to specify a turnover of more than three times the contract value in a pre-qualification questionnaire (PQQ).
PQQ Selection Criteria
Under the new rules, candidates will ‘self-certify’ that they meet the selection criteria at the pre-qualification questionnaire (PQQ) stage, rather than needing to send in documents such as accounts. These can then be checked if the candidate makes it through to the end of the process.
The window for the open procedure will reduce to 35 days, and restricted procedure 30 days (PQQ) and 30 days (ITT).
A reformed negotiated procedure will become much more widely available, and is likely to be used for more complex procurements which are currently procured using the often unpopular competitive dialogue procedure.
The negotiated procedure is more flexible in its structure, but the new directive will impose safeguards to minimise breaches of the principle of equal treatment.
The open and restricted procedures remain however; contracting authorities will also be able to use two new procedures:
(i) the competitive procedure with negotiation (similar to the previous negotiated procedure); and
(ii) the innovative partnership procedure (where the market does not already offer viable procurement solutions).
Option (i) is distinct from the competitive dialogue procedure. Competitive dialogue will no longer be limited to complex procurements, again allowing a contracting authority greater choice.
A new ‘national procurement oversight body’ will be formed, which will be tasked with monitoring compliance with procurement rules.
For contracts with a value greater than €1m (€10m for works), a full copy of the contract must be available for viewing by the public. This is of particular impact on registered providers as they are not subject to the Freedom of Information Act 2000. It will therefore become vital to ensure that any commercially sensitive or confidential aspects of contracts are appropriately flagged to the oversight body.
Please find to follow a link to the Cabinet Office’s Procurement Policy Note on the new thresholds which apply from January 2014: