Practical Law

PLC Public Sector reports:

The new Remedies Directive came into force at the end of 2009.  According to many commentators and practitioners it was going to cause chaos in public procurement with process after process being stopped in its tracks.  Has this been the case?  Is it too early to say? Is there another new piece of legislation (the Health and Social Care Bill 2011) slipping under the public procurement radar with the potential to cause far more problems?

The old King

As 2009 progressed, the public procurement world witnessed bolder and bolder claims that the implementation of the new Remedies Directive would see public procurement grind to a halt, as the new package of bidder remedies introduced amounted to a litigator’s charter, against which no contracting authority would be able to defend itself: 

• Contracts would be suspended left, right and centre, American Cyanamid and the balance of convenience (not to mention costs undertakings) would be a thing of the past.
• Any authority daring to actually award a contract would find it declared void.
• Authorities would be unlikely to get that far anyway as they would never be able to comply with the new standstill requirements.

More than 18 months later, has this happened?  Obviously not; it was never going to.  But the extent to which the new remedies have had so little impact on the public procurement sector has been a surprise: 

• The score for those acting for claimants opposing the lifting of automatic suspensions would make even Arsène Wenger blush (at least Arsenal scored two – when challenged no automatic suspension has (to our knowledge) remained in place at an interim stage (if you know different please get in touch!)).
• There has only been one reported case on ineffectiveness, and to say that the claimant appeared to be trying it on here is a bit of an understatement.
• The new, front-loaded, standstill process appears to be an improvement on its rather messy predecessor.

So does that mean that there is nothing to be concerned about? Not just yet.  Anyone who has been involved in a public procurement will know that things do not normally move at high speed.  It is likely that the new remedies will have a more profound effect in the long term (although not to the extent forecast by some in the heady days of late 2009).  However, to know just how much of an effect, we may have to wait for a case to work its way through the system all the way to the ECJ, so don’t hold your breath.

A new King?

It cannot be said  that the Health and Social Care Bill 2011 has been passing through the political arena without controversy.  The Bill has been stopped in its tracks by a “listening exercise“, been the subject of coalition wrangles and criticised by pretty much everyone with an interest in the NHS (aside from of course the Health Secretary, Andrew Lansley). It would also be wrong to say that the impact of the Bill had passed completely under the public procurement radar.  Since the Bill’s inception, many public procurement commentators have queried how the new GP commissioning groups will fit in with the public procurement regime.  However, this week saw the problem highlighted in a very simple way by the campaigning organisation 38 degrees, which published the legal advice that they have been given on the Bill’s implications for public procurement.  Put very simply, the advice states:

• Public procurement is very complicated; anyone who disagrees with this notion should try to explain the transitional provisions in the new procurement regulations to a lay man (or should that be transitional transitional provisions).
• Those involved in GP commissioning groups are unlikely to know anything about it.
• GP commissioning groups will be contracting authorities.
• The government has not said how it will assist groups to help them avoid falling foul of the public procurement regime.
• This is a recipe for disaster given the scale of the budgets that will be delegated to the groups.

It is difficult to argue with any of these points, which don’t even consider the issue of conflicts of interest given that GPs will be contracting authorities on the one hand and major suppliers on the other.  Other reforms in the Bill which will see local authorities having to work with the groups also mean that the impact of any issues may stretch beyond the health service  into social care. 

The potential for a problem on the horizon is not helped either by a sense that many (but not all!) already involved in health sector procurement take a complacent view towards the procurement regime on the basis that many of their procurements are for Part B services.  While the European Commission’s willingness to always assume a cross border interest can be overstated, the huge sums involved make it a near certainty that if some of these procurements were scrutinised, a cross border interest would be found.  If the reforms of the NHS mean more private sector interest in the provision of healthcare, the procurement activites of the sector are likely to attract unwelcome attention.

Without wishing to sound like Harold Camping and his continuing failed predictions of the world’s end, there does seem to be trouble ahead.