Our first post of 2014 on key developments in public procurement policy that lawyers advising in this area need to be aware of covers the period from December 2013 to February 2014. It does not consider case law, which is covered in our monthly public procurement case digest. For a summary of the latest cases, see Public procurement case digest (February 2014).
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New procurement thresholds
On 1 January 2014, the procurement thresholds were increased. The thresholds are now:
- For supply and services contracts: (for central government departments) £111,676 or (for other contracting authorities including local authorities) £172,514.
- For works contracts: (for all contracting authorities) £4,322,012.
New procurement directives
On 15 January 2014 and 11 February 2014, new directives on public procurement, procurement by utilities and the award of concession contracts were adopted by the European Parliament and the Council of the European Union respectively. The new directives will come into force on 17 April 2014. Member states have 24 months to implement the directives into national law. However, the UK government is committed to transposing the directives in a shorter timescale to take advantage of the improved flexibility they offer.
The government is developing guidance on the new directives and offering training sessions to public sector organisations.
Cabinet Office extends mystery shopper service
The Cabinet Office will be extending its mystery shopper service to carry out spot checks on contracting authorities’ procurement documents with a view to checking compliance with procurement policy notes and challenging unduly onerous processes. The service will also take referrals from SMEs and other concerned suppliers. The results of spot checks will be published so that poor practice can be challenged and good practice identified.
Government publishes guidance on procurement to promote tax compliance
On 7 February 2014, the government published a revised version of its Procurement Policy Note (Action Note 03/14). The revised note confirms that bidders for government contracts valued at over £5m must self-certify whether an “occasion of non-compliance” has occurred in relation to its tax returns submitted on or after 1 October 2012. If it has, the contracting authority may disqualify it from the process.
In addition, the contracting authority should insert certain contractual provisions such as the ability to terminate the contract in the event of any future occasions of non-compliance, or non-disclosure of such occasions. (For more information, see Article, Government tenders and tax: Behind the headlines.)
Government publishes host page for procurement policy notes and note on sharing information within government
The government’s procurement policy notes can now all usefully be found on the same page.
On 3 February 2014, the government also published a procurement policy note on sharing information within government. This policy is part of a wider objective of creating a single intelligent client, perhaps in light of the National Audit Office’s reports which highlighted spending silos in central government (see Opinion, Managing suppliers to central government: NAPO reports on how new government initiatives are delivering savings and leading to greater transparency).
Social Value Act: has it made a difference?
A government analysis of the effectiveness of the Public Services (Social Value) Act 2012 has highlighted the tension between a desire to integrate social and environmental considerations into public contracts and the restrictions imposed by the procurement rules. The government announced its intention to provide training on the issue. The new procurement directives also aim to make it easier to incorporate social considerations into public contracts so it is hoped this tension will shortly be capable of satisfactory navigation. (For more information, see Practice notes, Sustainable procurement, Green public procurement, and Article, What steps should my authority take to comply with the Public Services (Social Value) Act 2012?.)
European Parliament supports proposal to restrict access to single market by certain countries outside EU
On 15 January 2014, the European Parliament voted to support a proposal for a regulation to restrict access to the single market by goods and services from countries that do not have a procurement agreement with the EU. The proposals include a tool that would allow contracting authorities to reject foreign tenders or contracts over EUR5 million where good and services originating outside the EU make up more than 50% of the total value. The aim is to remedy market access imbalances between the EU and its trading partners. Vulnerable developing countries will be excluded from these measures.