REUTERS | Fabrizio Bensch

Public procurement: review of 2013 and preview of 2014

This post looks back at some of the key developments in public procurement in 2013 and highlights the impact these developments (and others that are expected) are likely to have in 2014.

If you are particularly interested in any expected development in this area expected in 2014 (whether set out below or not) please do not hesitate to get in touch with our editorial team by leaving a comment below or by submitting a query through the Ask system.

New procurement directives

In September 2013, the Council of the European Union published revised drafts of the texts of the three new procurement directives first published by the European Commission in December 2012:

  • A proposed new Classical Directive replacing 2004/18/EC.
  • A proposed new directive on the award of concession contracts.
  • A proposed new Utilities Directive replacing 2004/17/EC.

The Council and European Parliament have already agreed the texts as published by the Council so it is expected they will adopt the directives at their respective first readings, which are now expected to take place in early 2014.

The draft new classical directive makes some fundamental changes to procurement law, for example, it:

  • Removes the distinction between Part A and Part B services contracts, and instead provides for contracts for specified services that may have previously been Part B valued at EUR750,000 or more to be advertised. However, it will be for member states to determine the rules for the award of such contracts.
  • Enables contracts to be lawfully modified during their term without triggering a new procurement process, subject to certain conditions.
  • Codifies the existing case law on public to public arrangements which fall outside the procurement regime.
  • Includes new procedures “competitive procedure with negotiation”, “innovation partnerships” in place of the negotiated procedure with prior publication of a notice, while retaining the competitive dialogue procedure and the negotiated procedure without prior publication of a notice.

Procurement thresholds revised

The procurement thresholds have changed slightly and take effect from 1 January 2014. While they have risen in Euro terms, due to the exchange rate they have actually fallen in GBP terms. The revised thresholds are, in summary:

  • Goods and services contracts (central government): £111,676.
  • Goods and services contracts (local government): £172,914.
  • Works contracts: £4,322,012.

Improving access to public contracts for SMEs

The government continues its policy of facilitating access to public contracts by adopting a number of measures aimed at simplifying public procurement processes and publishing details of spend on public contracts. In December 2013, the government published Small Business: GREAT Ambition, which included a commitment to legislate to:

  • Abolish pre-qualification questionnaires (PQQ) for contracts below the EU threshold.
  • Mandate the use of a standard core PQQ for high-value contracts and ensure small business needs are taken into account in the design of procurement processes.
  • Make contract opportunities easier to find by making them all accessible on a single online portal (the use of the existing Contracts Finder portal was proposed).
  • Make sure small firms are treated fairly by mandating prompt payment terms all the way down the public procurement supply chain.

In addition, a new ratings service is proposed where both suppliers and contracting authorities will be able to rate each other’s performance.

Government investment in procurement expertise

This year has seen the government’s commitment to streamlining procurement processes and increasing transparency and value for money underpinned by investment in procurement support through the:

  • Creation of an integrated Crown Commercial Service incorporating the Government Procurement Service and other services across government.
  • Launch of a Procurement Development Programme for the NHS.

The Welsh Government increases its support for procurement activity through the launch of the National Procurement Service for Wales.

Public to public arrangements

One of the most notable procurement cases of the year was Piepenbrock Dienstleistungen GmbH & Co. KG v Kreis Düren (Case C-386/11) in which an arrangement whereby one contracting authority carried out cleaning service for another, through its Teckal company, was found to fall outside the exception established in Commission v Germany. The arrangement was distinguished due to the nature of the service, cleaning not be considered a public task, and the fact that the contracting authority responsible for delivering the service was doing so through its Teckal company. For more information, see Opinion, When is a procurement not a public procurement…the “in-house” exceptions.

Late tenders and missing information

This year a number of cases came to court challenging the ability of a contracting authority to refuse to admit late tenders, or to enable missing documents to be submitted after the deadline. The courts’ rulings consistently held that contracting authorities may reject as non-compliant bids which miss key sections without any obligation to seek clarification from them. However, where missing documents were created before the deadline, they may be admitted after the deadline in certain circumstances. For more information, see Procurement case tracker: Non compliant tenders.

Possibilities for 2014

Finally, as we enter 2014, the focus in the public procurement world is on the reforms referred to above and the way that they will be transposed into UK law.  While this is understandable, we have also thought about what other changes we may (or may not!) see.  Top of our list are whether 2014 will be the year that sees:

  • A contract being declared ineffective.
  • A change in the approach of the courts to lifting the automatic suspension of a contract award, which to date, with a few exceptions, has been heavily weighted in favour of public authorities.

Our view is that both are unlikely.

Leave a Reply

Your email address will not be published. Required fields are marked *