PLC Public Sector reports:
It is easy to get bogged down in whether a procurement is for “part A” services or “part B” services, above or below the threshold, or excluded from the full procurement regime in some other way.
Before you realise it, you are lost in a maze of Treaty principles and Interpretative Communications and the procurement is fast taking its own individual, untested path to delivery.
Instead, it will often pay dividends to adopt a different approach, take a step back at the outset and ask:
- Does it matter whether this is an excluded procurement or not?
- What do I really have to gain from avoiding the regime?
- What can applying the rules set out in the regime do for me?
Public sector purchasers may find that the answers to these questions will show that the safety first option of complying with the procurement regime, whether or not it technically applies, will often deliver more than a reduction in the risk of a challenge.
There are several reasons why this approach makes sense:
It will reduce the risk of procurement challenge
Complying with the Treaty principles is itself no simple matter. There is a misconception that if the procurement regime does not apply in full, a contracting authority is free to purchase in the manner it sees fit. This is not the case, compliance with the Treaty principles will usually require advertising, open competition, disclosure of award criteria and so on. Applying the procurement regime in addition will ensure full compliance with all of the principles and also mean that a contracting authority does not have to re-invent the wheel.
The market will know where is stands
Tendering for public contracts is a highly evolved business. Suppliers, in the current economic climate, will pick and choose what contracts they tender for. By using the procurement regime, suppliers will know what the tendering process will entail and will be in a better position to make a decision on whether to tender. Using an alternative method of procurement may put suppliers off, as they will feel unable to accurately assess how much time and money will be involved in tendering.
Focusing on “what” rather than “how” may mean a better solution
A focus on the procurement structure can lead to focus on what is actually being procured being lost. By reverting to a standard procurement structure, this risk is reduced.
The main reason contracting authorities can be reluctant to adopt the procurement regime is the time it takes to run a full process. However, following the Treaty principles will take time, especially as the contracting authority is still likely to have to advertise the opportunity. Further a well planned procurement should be able to absorb the time required to follow one of the procurement procedures and if it cannot, there may be scope to use one of the accelerated procedures. Finally, surely the focus should be the quality of the service to be delivered, rather than the extra few weeks the procurement may take.
These arguments do not even consider the time that may be lost if a procurement is challenged on the basis that the contracting authority should have complied with the regime or the time and money that will be used taking advice on whether an exemption applies.
Undoubtedly, there will be procurements that will not fit in with the procurement regime and due to an exclusion can and should be managed in an individual way (in accordance with the Treaty principles). However, even in these circumstances, lessons can still be learnt from the procurement regime. For example, a contracting authority may want to ask if the competitive dialogue procedure can be adapted to suit its needs, even if they do not want to follow the procurement regime in full.
I agree with the thoughts expressed here and often advise my clients to follow the Regs even if they don’t apply as a way of complying with the Treaty obligations which are becoming increasingly relevant given the recent flurry of challenges.
Would you say an authority can comply with the Treaty by:
1. sufficiently wide advertising (would the authority’s website do?)
2. clear and relevant award and evaluation criteria
3. sufficient timescales for response (even if they are shorter than those set out in the Regs?)
4. equal treatment of all bidders
Have I missed anything?
Thanks
The simple answer is, yes, the 4 points do broadly cover the steps that need to be taken to comply with the Treaty. However, you need to consider:
1. Whether you may be better off advertising on a wider basis than just the authority’s website, which will meet the minimum requirement but may not reach a wide enough audience to get you the best bid. You could consider using the supply2.gov.uk portal (or something similar), publishing an OJEU notice (both of which are free) or advertising in suitable trade journals.
2. What you mean by ‘equal treatment of bidders’. This concept runs beyond just giving everyone the same length of time to respond, the same information and so on. It also involves taking steps such as making sure the specification and contract terms do not unfairly favour one or more bidders over others. An incumbent supplier is always likely to have an advantage but you should make sure that everything that can be done to ensure a level playing field (particularly by providing as much information as possible to all bidders) is done. The contracts you are letting now should include provisions making sure your chosen supplier will give you this information in good time for when you retender the contract.
You can read in more detail what steps are necessary to comply with the Treaty in this practice note.
There are also dangers for authorities in deciding to follow the Regulations where they do not apply.
We recently brought a successful challenge against an authority that had decided to follow the restricted procedure for a Part B contract. The authority did not comply with the requirements fully to disclose the award criteria.
The challenge led to the authority having to retender the contract. If they had not said they were going to follow the restricted procedure then it is unlikely the challenge would have succeeded (or even been made).
Where authorities do decide they are going to tender a contract under the EU procurement rules it is vital that they follow those rules properly. Given the potential traps in the rules that can trip up authorities, where those rules do not apply the safer option is often not to apply them.