Our second post of this year on the key developments in public procurement legislation and policy that lawyers need to be aware of covers the period from March to May 2015. It does not consider case law as this is covered in our monthly public procurement case digest. For a summary of the latest cases, see Public procurement case digest (April 2015).
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Small Business, Enterprise and Employment Act 2015 received Royal Assent
On 26 March 2015 the Small Business, Enterprise and Employment Act 2015 received Royal Assent. The Act confers powers on the Minister for the Cabinet Office or the Secretary of State to make regulations imposing duties on contracting authorities in respect of their procurement and contract management functions. They may also investigate the exercise of these functions. The measures are intended to give a statutory basis to the current “mystery shopper scheme”.
Consultation on remedies in public procurement
On 24 April 2015, the European Commission launched a consultation on the effectiveness of the public procurement remedies regime under Directive 2007/66 (Remedies Directive). The Remedies Directive was implemented into UK law at the end of 2009 through amendments made to the Public Contracts Regulations 2006 (SI 2006/5) and its provisions are also included in the new Public Contracts Regulations 2015 (SI 2015/102).
The consultation seeks views on the effectiveness of the specific provisions such as the standstill period, ineffectiveness and other penalties, as well as on national issues such as review procedures, court and administrative fees, and remedies for below threshold contracts.
The deadline for responding to the consultation is 20 July 2015.
Guidance on the Public Contracts Regulations 2015
Since the Public Contracts Regulations 2015 (SI 2015/102) (PCR 2015) came into force on 26 February 2015, the government has published a number of guidance documents on the new regulations:
- Public Contracts Regulations 2015: Statutory guidance for contracting authorities and suppliers on paying undisputed invoices within 30 days. The guidance was made under regulation 113 of the PCR 2015 and requires contracting authorities to ensure their contracts contain provisions requiring them to pay undisputed invoices within 30 days, and for their suppliers to reflect these provisions in contracts with their supply chains. The guidance also includes a suggested standard clause.
- Public Contracts Regulations 2015: new requirements relating to pre-qualification questionnaires to help business access public sector contracts. The guidance was issued under regulation 107 and requires contracting authorities to adopt the standard pre-qualification questionnaire (PQQ) for contracts that are subject to the PCR 2015 (see Opinion, PCR 2015: When to use a PQQ?
- Guidance for completion of Public Contracts Regulations 2015 forms and notices in the transition period before new SIMAP forms are available. The UK was an early implementer of Directive 2014/24/EU. As such, the forms that contracting authorities must submit to OJEU have not yet been produced. The guidance suggests how the existing forms can be adapted to reflect the requirements of the PCR 2015.
- Guidance on the new light touch regime for health, social, education and certain other service contracts. Under the PCR 2015 contracts for health, social care and education services that are valued at £625,050 or more must be advertised on OJEU. However, contracting authorities have a discretion on the award procedures they can apply to those contracts, dubbed the light touch regime. For more information, see Practice note, Light touch public procurement regime (PCR 2015).
- Guidance on amendments to contracts during their term. Regulation 72 of the PCR 2015 permits public contracts to be varied during their term on certain grounds. These grounds include where the change is not substantial, codifying the Pressetext judgment, and also where the supplier is changed following a corporate restructuring. For more information, see Practice note, Varying public contracts; Variations permitted by the Public Contracts Regulations 2015.
- Guidance on awarding contracts. The PCR 2015 introduced some new elements regarding the award of contracts, notably (codifying recent case law) the ability to take into account the experience of the people delivering the contract (previously exclusively considered as a selection criterion), provisions permitting an authority to assess cost effectiveness on the basis of life-cycle costing; and a new duty on contracting authorities to investigate abnormally low tenders and to disregard them if they breach international environmental, social or labour law.
- Dynamic purchasing system guidance. A number of changes have been made to the process for setting up a dynamic purchasing system and the guidance includes some useful FAQs.
- Guidance on the standstill period. The standstill period remains a feature of the procurement regime. The guidance suggests that contracting authorities should apply a standstill period to the award of contracts where they have used a prior information notice as a call for competition, where they are awarding a Schedule 3 services contract, and for contracts under framework agreements, to reduce the risk of a declaration of ineffectiveness.
- Guidance on framework agreements. The guidance provides details of the changes affecting framework agreements under the PCR 2015 and some useful FAQs.
Guidance on publishing contract opportunities on Contracts Finder
The PCR 2015 introduced a new requirement for contracting authorities to publish all contract opportunities on Contracts Finder:
- Where the contract was advertised on OJEU.
- Where the contract exceeds the threshold of £10,000 (for central government), or £25,000 (for “sub-central” authorities, including local authorities) where that contract has been advertised elsewhere, such as on the authority’s website or local press.
On 25 February 2015, the Crown Commercial Service published guidance on the new rules including the minimum data requirements for publication. Details of contracts awarded must also appear on Contracts Finder, including contracts awarded under framework agreements.
BIS announces bidders for major infrastructure projects must develop skills of workforce
On 24 March 2015, the Department for Business, Innovation and Skills (BIS) announced a new policy whereby bidders for major government infrastructure projects will be required to provide evidence of their commitment to develop the skills of their current and future workforce.
Details of the policy will be further explained in the Procurement Policy Note.
House of Commons briefing paper on PFI costs and benefits
On 13 May 2015, the House of Commons library published a briefing paper on PFI costs and benefits. Key benefits are the transfer of risk from the public to the private sector, and the delivery of an asset that may be difficult to finance or procure conventionally. Key disadvantages were the higher cost of finance, inflexible contracts and that ultimate risk remains with the public sector.