Why this unreasonable haste?

Cabinet Office proposals for the implementation of the new EU procurement Directive

The Directive will allow up to 2 years for the UK implementing Regulations to be put in place. Registered providers and other contracting authorities may therefore be forgiven for thinking that they have some time to get on top of the extensive changes that the Directive will make. Not so, say the Cabinet Office. Originally they were talking about implementation in March 2014, but clearly this will not now be achievable. Our best guess at the moment is 1st January 2015 for the date when UK Regulations will come into force.

In the meantime, the Cabinet Office have been busy consulting on the minutiae of the implementation decisions. All these consultations have ended on the “close of play” on the particular deadline, so clearly the Cabinet Office has not been put off watching cricket by recent events in Australia! “Close of play” on 23rd December was the deadline for responses to the consultation on “forms”. This consultation was all about what to do if the Commission have not published the forms required for the new Directive by the time the UK Regulations are passed. We trust that the Cabinet Office civil servants enjoyed digesting the responses alongside their Christmas pudding!

Other consultations last year covered:

• what the new “light touch regime” for high value (over 750,000 euro) health and social services, legal services and limited other services contracts should require;
• how to terminate signed contracts (where the contractor should have been excluded from the procurement in the first place, following a decision by the European Court that the contract was let in breach of the EU procurement rules, or following a “substantial modification” to the contract that should have been advertised as a new contract);
• SME access and the new provisions on dividing contracts into smaller lots or explaining why not, and for limiting the number of lots a contractor may apply for or win; and
• procurement procedures, particularly the ability to continue to use the negotiated procedure without advertisement.

This year’s consultations cover:

• electronic tendering and whether to take advantage of the ability to delay the implementation of the provisions for requiring online tendering for the maximum period of 4 years and 6 months from the date of the Directive;
• central purchasing bodies and whether to require the wider public sector to buy particular supplies from particular buying clubs;
• contract provisions requiring contractors to comply with social, environmental and employment law, and whether to adopt a standardised approach to group structures, consortia and parent company guarantees;
• tender processes, including whether to prohibit contractors from being able to “complete, correct or supplement” information missing from or obviously wrong in tender submissions and whether to prohibit the price as the sole award criterion;
• whether to require details of all subcontractors at the time of tendering so that their “eligibility” can be checked; and
• detailed measures concerning the exclusion of tenderers, for example due to conflicts of interest.

So far we have managed to keep up with the programme and have responded to each of these consultations. We would be delighted to send you a copy of our responses to any (or all) of them. (Please contact either Gayle Monk (gayle.monk@anthonycollins.com) or Andrew Millross (andrew.millross@anthonycollins.com) if you would like copies).

So why is the Cabinet Office wanting to implement the UK Regulations so quickly? They have not said why, so this is pure speculation. However, Article 55 allows for the exclusion of a contractor that has shown “significant and persistent deficiencies in the performance of a substantive requirement under a prior public contract”. We suspect that political pressure may have been applied to the Cabinet Office to implement this provision as quickly as possible given the government’s experiences with the contract for the 2012 London Olympics.

More importantly, what are the main risks for registered providers from this “early implementation”? As well as the risk of procurement challenges if the new rules are not followed properly, there is one risk that stands out above all others. In last year’s Thoughtpiece, we highlighted Article 51, which states that,

“Contracting authorities shall, by electronic means offer unrestricted, full and direct access free of charge to the procurement documents from the date of publication of the OJEU notice”

“Procurement documents” are defined in Article 2(15) as,

“any document produced or referred to by the contracting authority to describe or determine elements of the procurement or the procedure, including the OJEU notice, the technical specifications, the descriptive document, proposed conditions of contract, formats for the presentation of documents by bidders, information on generally applicable obligations and any additional documents”.

In order to minimise the risk of challenge under the new UK Regulations, registered providers will need to ensure that drafts of all the procurement and contract documents are made available on their website before submitting the OJEU notice. Preparation of these documents will therefore need to start soon for procurements that will begin next year, or even later this year.

For more information contact Andrew Millross on 0121 212 7473 or andrew.millross@anthonycollins.com.

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