10 November 2015

Light touch procurement

The very word ‘procurement’, coupled with the requirements of the public procurement regime, has long been the cause of angst for schools and similar bodies. The good news is that hopefully things may improve with the introduction in the Public Contract Regulations 2015 of the Light-Touch Regime (LTR) for education and other service contracts.

The LTR is intended to provide a specific set of rules governing those service contracts that tend to be of less interest to cross-border competition (social, health and education services). Schedule 3 of the regulations provides the list of services to which the LTR applies.

The Public Contracts Regulations 2015 are in force for all procurements commenced on or after 26 February 2015.

So what has changed?

Well, the good news is that things are simpler:

  • There are fewer services included in the LTR than there were in Part B of the previous regulations.
  • The threshold of 750,000 euros (currently some £535,000) means that below this sum contracts no longer need to be advertised in the Official Journal of the EU (OJEU), unless there is concrete indication of cross-border interest. In practice this means that far fewer contracts will need to be subject to the public procurement regime.
  • The previous distinction between Part A and Part B services in the Regulations has been abolished as the European Commission was concerned that some Part B service contracts were of cross-border interest but weren’t being exposed to proper (EU wide) competition.

So how does it work in practice?

Where a contract is above the threshold there are a small number of new ‘light-touch’ procedural rules.

  • A Contract Notice or Prior Information Notice must be published in the OJEU, except where the grounds for using the Negotiated Procedure without a call for competition could have been used (e.g. where there is only one provider capable of supplying the services required).
  • A Contract Award Notice should be published following each individual procurement, or if preferred, group such notices on a quarterly basis.
  • Contracting Authorities should comply with the Principles of transparency and equal treatment contained in the Treaty on the Functioning of the European Union.
  • The conduct of the procurement should conform with the information provided in the OJEU adverts with regard to any conditions for participation, time limits for contacting/responding and the award procedure to be followed.
  • Time limits imposed by authorities or suppliers, such as responding to adverts and tenders must be reasonable and proportionate. There are no stipulated time limits in the LTR, so contracting bodies have to use their discretion and judgement on a case by case basis.
  • Contracting Authorities have the flexibility to use any process for the procurement, provided that it respects the other obligations listed above.
  • There is no requirement to use the standard EU procurement procedures (open, restricted etc.) that are available for non-LTR contracts. Those procedures may be used or tailored according to their needs or the party letting the contract may design their own procedures altogether.

Flexibility at a cost…

Whilst the LTR rules are flexible on the types of award criteria that may be used, they make it clear that certain considerations should be taken into account including:

  • The need to ensure quality, continuity, accessibility, affordability, availability and comprehensiveness of the services;
  • The specific needs of different categories of users (e.g. the parents of children receiving education services), including disadvantaged and vulnerable groups;
  • The involvement and empowerment of users; and
  • Innovation.

The new rules also allow for certain LTR contracts to be “reserved” for organisations meeting certain criteria, for example, public service mutuals and social enterprises. (Regulation 77). In practice this means that it is possible to run a competition which complies with the LTR, provided that the contract is for no more than three years and limits participation to those qualifying organisations.

Overall, the introduction of the LTR should lead to a significant reduction in the number of procurement exercises under the public procurement regime, resulting in significant savings of time and cost when letting service contracts.

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