Latest news on Procurement Regulations

Utilities Contracts Regulations 2016 and Concession Contracts Regulations 2016 in force from 18 April 2016. Click here to find out more.

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To get up to speed with the various new procurement law regulations, please click below;

> Concession Contracts Regulations 2016 

> Utilities Contracts Regulations 2016

> Public Contracts Regulations 2015 

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Procurement news blog


March 31, 2016 5:24 PM | Posted by Smith, Ruth | Permalink

If you’re a contracting authority, have you remembered that with effect from 1st April 2016, you must publish on the internet statistics showing, for the preceding financial year (i.e starting with 2015/16), the extent to which you have met your obligation to make payments to suppliers within 30 days?

Well in case you had forgotten, the Crown Commercial Service has issued a new PPN to remind you. The PPN is available here. The obligation stems from Regulation 113 of the Public Contracts Regulations 2015 which requires contracting authorities to include in their contracts provisions for payment of suppliers within 30 days of the date of a valid, undisputed invoice. The publication requirements, as highlighted in the PPN, are dealt with in Regulation 113(7).

Some contracts are exempt from the requirement including: contracts for NHS health care services falling within the scope of the NHS (Procurement, Patient Choice and Competition) (No 2) Regulations 2013 and contracts awarded by maintained schools and Academies.

The PPN reminds authorities, whose contracts are in scope, that the details to be published are:

- After March 2016, for the financial year 2015/16: (i) the percentage of invoices paid within 30 days and (ii) the amount of interest paid to suppliers due to late payment.

- After March 2017, (i.e. for the 2016/17 financial year and later years): in addition to (i) and (ii) above, (iii) the amount of interest the authority was liable to pay (whether or not paid and whether under any statutory or other requirement) due to a breach of Regulation 113.

Regulation 113(9) also requires authorities to have regard to guidance issued by the Cabinet Office. This guidance, which includes a model template for publishing payment performance statistics, is highlighted in the PPN and available here.

And finally … the CCS Mystery Shopper service will be conducting spot checks. So publish your statistics or be shopped … you have been warned ….!


March 24, 2016 11:52 AM | Posted by Beresford-Jones, Jenny | Permalink

Not buses of course, but procurement regulations. Last week saw the publication of the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the unwieldy sounding Public Procurement (Amendments, Repeals and Revocations) Regulations 2016.

All of these come into force on 18 April 2016, in relation to procurements commenced on or after that date. See the Portal’s Useful Links page for a copy of each.

Utilities Contracts Regulations 2016

These will replace the Utilities Contracts Regulations 2006 and implement the 2014 Utilities Directive. We are creating new content for the Portal on these regulations and will post details when this is available. We have done a comparison of the final version against the last draft and there do not appear to have been material changes made in the interim, which is reassuring for those who read the last draft.

Concession Contracts Regulations 2016

These are new regulations to implement the 2014 Concessions Directive and will regulate public works and public services concession contracts valued at over the threshold of £4,104,394.

The regulations carefully define the characteristics and features of a concession contract. In-scope concessions will need to be advertised in the OJEU and follow a procurement procedure that meets certain minimum standards around transparency, equality of treatment and non-discrimination. Duration of concession contracts must be limited to 5 years (unless it can be demonstrated that a longer term is needed for the concessionaire to recoup its investment).

We have done a comparison of the final version against the last draft available and there are no significant changes, apart from in the section dealing with Remedies. This has been brought into line with the wording in the Utilities Contracts Regulations 2016, and will allow a tenderer to claim its costs of preparing the tender and participating in the process if it can show that it would have had a real chance of winning the concession contract but for a substantiated breach by a Utility (note, not by a Contracting Authority.)

We are creating new content for the Portal on these regulations and will post details when this is available.

The Public Procurement (Amendments, Repeals and Revocations) Regulations 2016

These regulations make amendments to several pieces of legislation but particularly to the Public Contracts Regulations 2015 (PCR 2015). From 18 April 2016, you will need to refer to an updated copy of the PCR 2015 that reflects the changes made.

The following are some of the more interesting amendments made to the PCR 2015:

  • Regulation 57 (Exclusion Criteria) is amended so that an offence under section 2 or 4 of the Modern Slavery Act 2015 (i.e. human trafficking) becomes a mandatory exclusion offence. We understand from the Crown Commercial Service that it intends release a new standard form PQQ plus guidance that will include this new ground (and that it will also include amendments to reflect the fact that the European Single Procurement Document is now in force; see our article here for more on this);
  • Duration of Exclusions for tax offences - Regulation 57(11) used to impose a 5-year exclusion period where there was a mandatory exclusion for an offence of non-payment of taxes and a 3 year period of exclusion where discretion to exclude was exercised in relation to a lower level breach. Although there remains an obligation to exclude where this kind of offence has been committed and discretion to exclude for lower level breaches, the “5 year/3 year” period appears to have been removed for these particular exclusion grounds;
  • Permitted modifications - Regulation 72(1)(b) is amended so that, to fall within this safe harbour, you need to demonstrate that additional works/services/supplies are required, the that the value change is less than 50%, and that the contractor cannot be changed because (1) there are economic and technical reasons (e.g. interoperability with existing equipment/services) AND (2) changing the contractor would cause significant inconvenience or substantial duplication of costs. The “and” underlined here reads “or” in the current version of the PCR 2015 – so this safe harbour has narrowed significantly in scope from what is currently stated on the face of the regulations. However, the change has been made to reflect the fact that the parent Directive also uses “and” rather than “or”; our advice has been and continues to be that contracting authorities should assume that “and” is correct; and
  • Permitted modifications (2) – we already have had the Edenred case and guidance from the CCS which tells us that we must apply Regulation 72 to modifications proposed after 26 February 2015, even where the original contract is governed by the 2006 Regulations, and that the Regulation 73(3) termination rights are to be implied in this situation as well. Regulation 118(5) of the PCR 2015 will now states this expressly, which provides some useful clarity on the position.

An area of interest to Commissioners and Providers in the health sector is around the coming into force on 18 April 2016 of the PCR 2015’s Light Touch Regime for the procurement of health services by CCGs and NHS England.

This area is already regulated by the NHS Procurement, Patient Choice and Competition)(No.2) Regulations 2013 (the 'NHS Regs 2013') and there is a certain dissonance between the two regimes. We did wonder whether these amendment regulations might amend either the PCR 2015 or the NHS Regs 2013 to give us a clearer steer on how the two are intended to gel together. However, no such amendments feature and it may be that the government intends to leave it to practitioners to work out how to apply the law. You can read more about the two regimes, and our advice as to how to interpret the law post 18 April 2016, in my colleague Christopher Brennan’s article here.

February 24, 2016 9:47 AM | Posted by Ruth Smith and Tom Benjamin | Permalink
Renegotiated deal in hand, David Cameron has returned from Brussels to a mixed reception. The growing clamour for so-called ‘Brexit’ from senior Conservative cabinet ministers, and Boris Johnson, has added an urgent reality to the possibility of the UK severing its ties with the European Union.

Between now and 23 June, the country will be turning its mind to the effect that Brexit would have on lives, livelihoods and business. Some may think it could be a time to rejoice at the prospect of bidding farewell to a procurement regime often dubbed as “inflexible, complex and onerous”, whilst public sector procurement teams and lawyers may be wondering about the future security of their jobs. But it's neither time to rejoice or worry: whatever the decision on Brexit, it looks as though the current landscape of public procurement regulation, at least in the short to medium term, is here to stay.

Here are five reasons why public procurement cynics should hold off on the champagne orders and why public procurement teams and lawyers ought not to be losing sleep.

1. The EU regime is, for the most part, transposed directly into UK law

Whilst the EU Treaty and EU Procurement Directives would no longer apply in the UK, an ‘out’ decision would have no impact on the validity of the UK legislation put in place to transpose those directives (i.e. the Public Contracts Regulations 2015 and the soon to come into force Utilities Contracts Regulations 2016 and Concession Contracts Regulations 2016). Instead, there is likely to be a drawn-out process of repeal and reform in sectors in which the UK has traditionally been dissatisfied with the EU position. Wholesale reform of the public procurement regime is unlikely to be top of the government’s list.

2. The UK had a procurement regime before joining the EU

There was no single regulatory framework prior to the European system, but other regimes existed (including compulsory competitive tendering for local authorities) together with public bodies’ own internal rules and policies for regulating their procurement processes. These rules existed to achieve best value for money in the use of public funds, and to ensure accountability, probity and decisions free from bias. With the potential for judicial review where a public authority’s decision making was flawed or biased, the old pre-EU practices had all the carrots and sticks of an effective regulatory regime. The only issue was a lack of consistency, which has since been corrected by legislation. So even if existing UK procurement legislation were to be repealed it is highly likely that another, similar regime might take its place.

3. The public sector is a slow mover

Although the global market has advanced significantly since the UK’s pre-EU regime, the underlying principles of achieving value for money and accountability in public authority decision-making remain the same. These principles are now entrenched in a public sector which has, over time, become hardened to the arguably burdensome EU procurement regime. It is unlikely that authorities would quickly embrace an unregulated, or indeed an under-regulated, regime.

4. The UK’s appetite for procurement regulation

Despite being against ‘gold plating’, the UK’s approach to implementing EU law (and particularly EU procurement law) has gone beyond the minimum requirements imposed by the parent directives. Examples of this include:

• in the NHS – the NHS (Procurement, Patient Choice and Competition ) (No 2) Regulations 2013 which add further regulation to the procurement of NHS healthcare services by NHS England and Clinical Commissioning Groups;
• the Public Contracts Regulations 2015 and the additional rules in Part 4 concerning, amongst other things, advertising on Contracts Finder; use of the Cabinet Office standard PQQ and rules relating to sub-threshold contracts; and
• the Small Business, Enterprise and Employment Act 2015, which gives ministers the power to impose duties on authorities relating to their procurement processes and to investigate the processes of authorities.

So there is strong evidence the UK has a healthy appetite to regulate in this field, most recently illustrated by the Procurement Policy Note issued by the Crown Commercial Service last week. The PPN (an extract of which appears below) reminds authorities of their international obligations when tendering public contracts and expects public procurers to apply the same standards to suppliers both within and wholly outside the EU:

Public procurement should never be used as a tool to boycott tenders from suppliers based in other countries, except where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government. There are wider national and international consequences from imposing such local level boycotts. They can damage integration and community cohesion within the United Kingdom, hinder Britain’s export trade, and harm foreign relations to the detriment of Britain’s economic and international security.”

5. The regime still applies to EEA members

If the UK were to adopt the Norwegian model following an ‘out’ vote, it would become a member of EFTA and the EEA. The UK’s obligations as members of the EEA would include the adoption of the EU procurement rules. The difference, and big disadvantage with this model, would be UK’s loss of its place at the negotiating table when it came to future revisions of the EU procurement rules.

The future

No one really knows the consequences of an ‘out’ decision on 23 June. What we do know is that the referendum would only be the start and nothing would change overnight. The UK would have its work cut out in re-negotiating its trading relationship with Europe and other trading partners. The process of reform would be a gradual one, and it could be quite some time before the regulation of public procurement found itself on the parliamentary agenda.
February 2, 2016 2:36 PM | Posted by Beresford-Jones, Jenny | Permalink

It is now February 2016 and the Public Contracts Regulations 2015 (PCR 2015) have been in force for almost a year. It takes case law a while to catch up with statute, but we are now seeing the first cases coming through where the Court has had to consider the new regulations.  An interesting recent example is the case of Counted4 Community Interest Company v Sunderland City Council [2015] EWHC 3898 (TCC), in which the Court for the first time looked at the new Light Touch Regime for health and social services, and at Regulation 24 which requires a contracting authority to take active measures to nullify any conflict of interest.

Brief facts

Sunderland City Council was re-procuring a contract for substance misuse support services (the existing contract was due to run out in January 2016), The re-procurement was advertised in June 2015 and, as it was for health/social services, it fell within scope of the new Light Touch Regime (see Regulation 74 onwards of the PCR 2015). The incumbent provider was Counted4 Community Interest Company (the “CIC”), a non-for-profit business that was established for the purpose of providing these services to the Council, a job which it had been doing since 2008. The judgment does not state this expressly, but the CIC may well have been awarded the contract at that time without any advertisement or competition (as was previously permitted under the old, now repealed, Part B services regime).

The CIC was unsuccessful in its bid to operate the new contract and brought a claim during the standstill period, triggering the “automatic suspension” of the award to the successful bidder (a local NHS Trust). The Council applied to the Court to have the suspension lifted. As such, this was not a trial of the substantive alleged procurement breaches by the Council, but rather of whether the suspension ought to be maintained until full trial, or lifted. In these situations, contracting authorities are often anxious to be able to proceed with the award process to ensure continuity of services, while the claimant’s goal is to prevent the contract being awarded at all and to preserve its chance of ultimately obtaining the work.

American Cyanamid test

When deciding whether to lift or maintain a suspension, the Court will apply the test set out in the American Cyanamid case. This test poses a hierarchy of three questions:

  • Is there a serious issue to be tried?
  • If so, would damages be an adequate remedy for either party?
  • If not, where does the “balance of convenience” lie? (this would factor in issues such as the public interest in the contract being awarded or suspended).

The CIC’s arguments

The CIC argued that the suspension ought to be maintained until a full trial of the alleged procurement breaches could be held. It alleged that the Council had breached its obligations under Regulation 24 to take appropriate measures to identify and prevent a conflict of interest. The CIC had had a very strained relationship with the Council’s employee who had been responsible for the contract management of the existing contract. It alleged that the inclusion of this employee on the evaluation panel for the procurement of the new contract amounted to a failure to take steps to nullify a conflict of interest. The CIC also alleged that there were errors during the evaluation stage in how the tenders had been marked and that certain elements of the bid had not been taken into account.

The Council’s arguments

The Council, arguing that the suspension should be lifted and that it should be allowed to proceed with the award, argued that the CIC’s case was weak and/or that it raised no serious issue to be tried. It also argued that, should the CIC eventually be successful at full trial, damages would be an adequate remedy for it and there was therefore no need to stop the contract award process going ahead before the trial. On the other hand, the Council argued, there was an urgent need to ensure service continuation for vulnerable service users, such that damages would not be an adequate remedy to the Council if the suspension were maintained; therefore, the public interest lay in allowing the award to proceed.

The Decision

The Court was required to rule not on the substantive questions of whether the breaches alleged by the CIC had in fact taken place (these are questions for the full trial at a later date), but only of the issue of whether, in the interim, the suspension of the award should be upheld, or lifted.

The Court ruled that the suspension should be maintained. This is a relatively unusual decision. In most cases it proves difficult for the claimant to show that damages would not be an adequate remedy and/or the public interest element brings the Court down on the side of the contracting authority.

In applying the American Cyanamid test, the judge came to the following conclusions:

  • Evidence provided about the very difficult relationship with the Council employee did suggest that there was at least a serious issue to be tried on the conflict of interest point (although at this stage the Court made no judgment about the substantive complaint)
  • Previous case law is authority for the conclusion that, where there are allegations about mis-evaluation, it is logical to conclude that there is a serious issue to be resolved at full trial.
  • Damages would not be an adequate remedy for the CIC, given that it was set up solely for the purpose of providing this service to the Council and that, were the contract award to go ahead, all its specially trained staff (who could not be easily replaced) would TUPE transfer over to the new provider. Significant also was the fact that the CIC would be (financially) unable to pursue the claim were the contract award to proceed.
  • The public interest did not tip the balance in favour of allowing the award to proceed. Despite the Council’s evidence as to the urgency in order to secure the provision of services, the Court was not persuaded that there were any significant problems with the existing contract and, on the evidence, it did not judge the Council to have been acting with particular urgency over the course of the procurement. Given that an expedited trial of the substantive claims could be held in Spring 2016, the Court was not persuaded that a two or three month delay would be so critical as to tip the balance of convenience in the Council’s favour.

Comment

This case turns on its own facts to some extent – it unusual for the claimant to be as entirely dependent on the contract in question as CIC was in this case. Because of this relatively uncommon set of facts, the CIC here was able to successfully argue that, were the suspension to be lifted, the new contract awarded and the CIC to go on to win on the substantive claims at full trial, then damages would not be adequate compensation,. There are not many suppliers who are entirely dependent on one source of business in this way.

That said, the judgment is a warning to contracting authorities that the Court will apply the American Cyanamid test on a case by case basis and there are no guarantees that the judgment will go the contracting authority’s way.

This case will be an interesting one to look out for when it comes to full trial. It will be interesting to see what the Court has to say about the contracting authorities’ obligations around evaluation in the context of a Light Touch regime process to which the full public procurement regime does not apply. It will also be useful to get the Court’s view on the conflict of interest point; should the contracting authority in this case have taken clearer steps to nullify the conflict, such as ensuring the employee in question was not involved? Watch this space.

You can find a copy of the judgment here.

 

January 20, 2016 4:17 PM | Posted by Smith, Ruth | Permalink

Regulation 59 of the Public Contracts Regulations 2015 (“PCR 2015”) requires contracting authorities to accept a European Single Procurement Document (“ESPD”) from bidders as part of the selection process.

This implements a similar provision in the new Public Contracts Directive 2014/24, the aim of which is to reduce the administrative burden on bidders and contracting authorities by simplifying the manner in which information and evidence is provided at selection stage. It is effectively a form a self-certification of good standing that the bidder does not fall within any of the exclusionary grounds and has the necessary economic/financial standing and technical and professional ability. It is intended to reduce the amount of documentation required from bidders at an early stage by avoiding the need for bidders to submit additional evidence and documentation in support of the statements made in the ESPD. This evidence and supporting documentation can then be requested by the contracting authority at any point “where it is necessary to ensure the proper conduct of the procedure”.

An example of when this may be the case is given at Recital 84 of the Directive which suggests that, in the case of two-stage procedures (e.g. restricted, competitive dialogue etc.) when making a short-listing decision, the submission of supporting information from the short-listed bidders may be justified to avoid selecting candidates which later prove ineligible. The contracting authority must also request the up to date supporting evidence and documentation from the bidder to be awarded the contract.

The European Commission has recently published an Implementing Regulation, which for the first time sets out a standard form for the ESPD, which (as we understand it) each member state will adopt. It brings into force, from January 26 2016 in England and Wales, the obligation on contracting authorities to accept the ESPD from bidders as preliminary evidence instead of certificates issued by public bodies or third parties (e.g. banks) to confirm that the bidder:

  • is not in breach of one of the mandatory or discretionary exclusion criteria;
  • meets the selection criteria set out at Regulation 58 (suitability to perform the contract, economic and financial standing and technical and professional ability); and
  • where applicable, meets the objective and non-discriminatory criteria that the authority is going to apply to reduce the numbers who are invited to bid.

Ultimately, the ESPD will be available in an online format only but the PCR 2015 state that the “online only” requirement is to be delayed until April 2017; until then, paper/Word copies may be used.

How will the ESPD work in practice?

At the time of writing we have not yet had the benefit of any guidance from the UK government so to some extent the answer to this question is that we don’t yet know. However, there are a few pointers we can give at this stage:

  • The Regulation 59 obligation on contracting authorities is simply to accept ESPDs sent to them by bidders;
  • The obligation applies to contracting authorities from 26 January 2016 (though it is as yet unclear whether it applies to procurements already under way at that date or only to those advertised on or after that date). Note that the obligation will not apply to Utilities running a procurement until the Utilities Contracts Regulations 2016 come into force (on 18 April 2016);
  • The Implementing Regulation states that the contracting authority OJEU/call for competition must reference what information the ESPD will require, and that the intention is for ESPDs to be submitted with the tender in an Open procedures and with the Request to Participate in others; and
  • Member states can require use of (or can leave it to contracting authorities to decide whether to use) an ESPD in a below-threshold or Light Touch procurement. Given the relatively “hands-off” approach the government took to implementing the Public Contracts Regulations 2015 in general, it seems likely that here the government may opt to leave this decision to contracting authorities on a case by case basis.

Obviously, some key questions remain unanswered, particularly the issue of how in practice the use of the ESPD is meant to fit together with the Crown Commercial Service’s (CCS) standard Pre-Qualification Questionnaire (PQQ). Both cover much of the same ground, and it would seem to defeat the object of the ESPD and create more room for error or ambiguity if bidders are now required to complete two documents where previously only one was needed. We have today had a steer from the CCS to the effect that it is “currently discussing the most suitable option for ensuring that government's guidance and standard documents on selection are aligned with the ESPD. A PPN and accompanying guidance will be published shortly. In the interim the advice in PPN03/15, the supplier selection guidance and the standard PQQ template should continue to be used until the policy and guidance on the aligned ESPD/PQQ are published.”

What should contracting authorities do now?

Obviously, do keep an eye out for the CCS guidance and PPN which will hopefully resolve some of the questions around how the ESPD will work in practice here.

Otherwise, given that the Regulation 59 obligation is to accept ESPDs from January 2016, a failure to do so would amount to a technical breach of the Regulations. Therefore it is worth briefing procurement staff internally about the standard format of the ESPD, its purpose and the possibility that ESPDs will be received, and should be accepted. Having said that, it is perhaps unlikely that bidders will be ready to submit ESPDs in the near future, particularly if, following the CCS steer around continuing to use the standard PQQ for now, contracting authorities do not prompt this by referencing the use of ESPDs in the OJEU or call for competition.

However, contracting authorities should take care to avoid any wording in their procurement documents which either expressly or by inference actively prohibits a bidder from submitting an ESPD on or after 26 January 2016, since the obligation to accept these will be “live” from that point. For example, if the conditions accompanying a PQQ or ITT state that a PQQ or Tender response may be rejected if it is not in the format specified, and the specified format does not take account of the possibility of some of the information being contained within an ESPD then the drafting should be amended to take account of this.

Once the CCS guidance is available, it is likely that a review of standard procurement documents will be needed, to ensure these work together with the ESPD process. There are likely be consequential amendments to the standard form PQQ document. Also, standard form ITTs may need revision (as discussed above and, for example, to reflect the obligation at Regulation 54(4) to ensure that ITTs reference the evidence and supporting documents that will have to be submitted in due course to verify the preliminary statements made in the ESPD).

We will post here again with further analysis and practical tips around use of the ESPD, once the CCS guidance is available.

December 22, 2015 12:01 PM | Posted by Beresford-Jones, Jenny | Permalink

This week, we’ve been looking through a log of all queries received by our Procurement Portal helpline over 2015, looking for any discernible “themes”. Surprisingly, “themes” were conspicuously absent, with the exception of a spike of questions in the spring on the impact of the new Public Contracts Regulations 2015 (which came into force in February). Those aside, it turns out we have answered questions on just about every topic in procurement law and practice this year.

One of the most surprising questions came in only last week, from an incumbent supplier of goods who for very many years now has traditionally been awarded contracts directly, free from any competition.

S. Claus, an entity based at the North Pole, called our helpline to query whether its contracts in fact ought to have been advertised and competed and whether there was any risk of a claim for a “declaration of ineffectiveness”? The client was most anxious to avoid this eventuality, given the catastrophic consequences should it ever come to pass (disappointed children with empty stockings, elves and reindeer sitting idle, etcetera).

Happily, we were able to advise that the direct award of these contracts is probably legal.

Our advice was based firstly on Regulation 32(2)(b)(ii), which allows a contracting authority to award a contract without publication of a notice where the services/goods can only be provided by one supplier, due “technical reasons” making competition absent. The client explained to us that no other provider had the technical capability to provide the service with the flexibility and in the volume and timeframe offered by S. Claus. In our view, while in general the scope of this exemption is narrow, nonetheless we were satisfied in this case that the requirements of this Regulation were met; i.e. that "no reasonable alternative or substitute" was available and that the absence of competition was not due to an "artificial narrowing down of the parameters of the procurement".

As a second line of argument, we also considered whether these contracts were “public contracts” at all, given the requirement in the Regulations for public contracts to be “in writing” and “for pecuniary interest”, and that they be procured by a "contracting authority".

We concluded that this was a grey area in respect of the first two definitions. First, while no contract is signed as such, it is possible that S. Claus’ customary acceptance of handwritten requests may well amount to a contract “in writing”. Further, while S. Clause receives no monetary consideration, nonetheless the traditional payment of a glass of sherry and a mince pie is still likely to constitute “pecuniary interest”.

However, we advised that it was highly unlikely that children worldwide could amount to a "contracting authority" for these purposes, providing much needed reassurance to the client and saving the disappointment of children everywhere. 

A very Merry Christmas to all our readers from the Procurement Portal team!

December 21, 2015 10:52 AM | Posted by Smith, Ruth | Permalink

We have recently had judgment in a Scottish case where an ineffectiveness declaration has been made which, to our knowledge, is the first of its kind: Lightways (Contractors) Ltd v Inverclyde Council [2015] CSOH 169 (click here to see the judgment).

Readers will probably remember that a court may award a "declaration of ineffectiveness" and bring a contract to an end, in three specific circumstances. These are (broadly speaking) (1) where the contract has been awarded directly when an OJEU advertisement and competition was in fact required; (2) where there has been a breach of the requirement to hold a lawful standstill period and this has deprived a bidder of the opportunity to seek redress for another substantive breach; or (3) the rules on mini-competitions have not been followed, in the context of a contract called off from a framework.

Brief facts

In 2015, the Council ran a mini-competition and made a call off under Lot 9 of a CCS Framework agreement for Street Lighting Services. The contract award was made to a company named “Amey Public Services LLP” (LLP) and the contract entered into. It was relevant that in 2013 the Council had previously made an award under the Framework to the same LLP.

The Claimant (Lightways (Contractors) Ltd) was not on the Framework for Lot 9 but nevertheless challenged the award on grounds that the LLP were not appointed under the Framework and so the contract award had been made contrary to Regulation 19(3) of the Public Contracts (Scotland) Regulations 2012 (which mirrors Regulation 19(3) of Public Contracts Regulations 2006). This regulation states that call offs can only be made to entities which have been appointed to the Framework. In fact, it was a different Amey company, “Amey OW Limited” (OW), which was the supplier listed on the Framework.

Notwithstanding that both the LLP and OW had links to Amey, they were very different companies. The LLP was a JV between a company in the Amey Group (not OW) and Lanarkshire Council whose principal activity was stated to be a contract with Lanarkshire Council for highways maintenance. In contrast, OW’s principal activity was stated to be civil engineering consultancy. Each company had their own assets, employees and were very separate businesses. Unlike LLP, OW had no presence at all in Scotland.

Decision

The Court accepted the Claimant’s arguments and was satisfied that Lightways had standing (in layman's terms, this means the "right to sue") to challenge even though it was not itself a party to the Framework.

It did not accept that the principle of proportionality applied here to allow the court to simply correct the Council’s mistake and substitute OW in the LLP’s place. It was clear that this was not a simple mistake which could easily be corrected, as the Council had never had the intention to award the contract to OW (the party listed on the Framework). This was evident from the fact that the intention was to award to the same company as had had the contract (albeit through the same error) since 2013. 

Therefore, the Court concluded the Council had no defence to the challenge (under Regulation 19(3)) and therefore made an order of ineffectiveness.

Comment

The case is interesting, not only because it is the first case on ineffectiveness but also in relation to "standing". Even though the claimant was not entitled to be appointed under the Framework, it was still found to have standing to challenge the award.

There is no mention in the judgment of the Council carrying out a standstill prior to entering into the contract with LLP; it would have been interesting to know if running a standstill would have "saved" the Council from an ineffectiveness declaration, as, by appointing to an entity which was not on the Framework, the Council had in effect made an illegal direct award. If the Court felt Lightways had standing to challenge, this suggests it may also have concluded that a standstill may not have saved the position as Lightways (who was also not a party to the Framework) would not have received a standstill notice in any event.

The case is also a good reminder of the importance of ensuring (a) that the same entity that tenders is awarded the contract and (b) in the case of Frameworks checking that tenderers invited to mini competitions and those awarded call offs are parties which are actually appointed to the Framework.

December 4, 2015 11:51 AM | Posted by Beresford-Jones, Jenny | Permalink

Yesterday, the European Commission’s new forms for use under the Public Contracts Regulations 2015 “went live” on the SIMAP website. The Crown Commercial Service has also published a policy note on the topic.

Contracting authorities should now use these new forms for procurements regulated by the Public Contracts Regulations 2015, rather than relying on the transitional “workaround” that has previously been in place.

That said, the CCS guidance does state that “due to the requirement to adapt systems to accept the new standard forms and notices, and the time needed to re-qualify, some e-Senders may not have the new standard forms and notices available in December. The transitional arrangements may continue whilst the TED re-qualification phase is taking place.”

Of particular interest are the “new” forms, for example, those for use in relation to substantial modifications under Regulations 72(1)(b) and (c) and the new contract notice and award notice forms for procurements falling under the Light Touch Regime.

Also available on the SIMAP site are new forms that will be required under the new Utilities directive and the new Concessions directive (which will be implemented here in April 2016 by the Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016 respectively).

November 27, 2015 11:28 AM | Posted by Souter, Katherine | Permalink

These new thresholds for the application of the various public procurement regimes come into force on 1 January 2016.

 Supply and services contracts (central government)  €135,000/£106,047
 Supply and services contracts
(sub-central government)
 €209,000/£164,176
 Works contracts (central and sub-central)
 €5,225,000/£4,104,394


The threshold for public concession contracts under the new Concessions Directive is now €5,225,000/£4,104,394. Note however that this Directive has not yet been implemented in the UK (although the draft Concession Contracts Regulations 2016 have been published and are due to come into force on 18 April 2016).

The “light touch” threshold for public service contracts for social and other specific services has not been amended in Euros but the Commission’s conversion into other currencies means that the value in £GBP drops (the threshold €750,000/£589,148, under the Public Contracts Regulations 2015).

Highlights

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The Procurement Portal aims to provide a "one stop shop" for procurement law queries and advice.

Call 0344 880 2963 to speak to someone in our team or email us with your query.

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