Whilst the debate rages (or tries to) on the merits of the UK remaining a member of the European Union or leaving, there have been some significant changes to the EU public procurement regulations.
Whether the UK remains a member or not, it is almost certain that EU regulations will shape our own domestic procurement law for many years to come. Indeed, if the UK were to decide to leave the EU, it is very likely that a fundamental condition of a beneficial trade deal (assuming one were to be available, let alone access to the Single Market) would be that UK public procurement must continue to be based on the EU Directives.
In light of the above, it is important that public procurement professionals and strategic leaders across the public sector understand the new EU Public Contracts Directive (Directive 2014/24/EU). This has been transposed into UK law for England, Wales and Northern Ireland by the Public Contracts Regulations 2015, and for Scotland by the Public Contracts (Scotland) Regulations 2015 – so again, if there were to be a UK exit from the EU, this law is already on the statute book. It is also most unlikely that any UK government would rush to rescind or change it, not least because the UK government has been a leading supporter of the Directive within the European Council.
As with any law (especially public procurement regulations), there will inevitably be a number of questions to be addressed as it is enacted, tested and clarified in practice, and possibly through the European courts. These include:
- how should contracting authorities use the procedures when the justification used is that in Article 26(4)(b), Directive 2014/24/EU, i.e. to obtain regular and acceptable tenders where only irregular or unacceptable tenders are received in response to a call for tenders based on the Open or Restricted Procedures?
- what can/should a contracting authority discuss in dialogue/negotiation, bearing in mind that the broadly drawn ‘right to discuss’ is not an obligation to do so and that a very wide scope for dialogue/negotiation may indicate lack of sufficient planning?
- How well-developed should proposed bidder methods of delivering project outcomes be before final tenders are called for?
- what greater flexibility do the new regulations give contracting authorities after the call for final tenders and the selection of the winning bidder (there are important differences between what is permitted in Competitive Dialogue and in Competitive Procedure with Negotiation)?
- how in practice should contracting authorities comply with provisions for transparency about the conduct of dialogue and negotiations in the Competitive Dialogue and the Competitive Procedure with Negotiation (Art 55(2) (d), Directive 2014/24/EU), with its obligation to disclose the conduct and progress of negotiations and dialogue as part of the post-award debrief to any tenderer that has made an admissible tender?
These are, in part, technical questions but nevertheless, they are important ones.
There are also a number of less technical but equally important questions that public sector strategic leaders, their advisors and public procurement officials will need to address, including:
- do we have the skills and capacity to apply the new regulations?
- how can we apply these regulations in ways that will maximise our wider social, economic and environmental goals?
- what specialist advice might we require and on what basis?
- can the public sector collaborate to develop and ensure access to necessary advice and expertise from within the sector itself?
- what will be the response of bidders and potential bidders; and how can we ensure that we adopt practices compliant with regulations, which are attractive to bidders and cost effective for our own organisation?
- how do we avoid over-engineering these regulations?
Public procurement is a critical strategic tool for every public sector organisation, and consequently for the wider public interest. The public sector procures significant services, supplies and infrastructure, and it has to ensure value for money and wider social value. For many of its contracts, it can benefit from forging partnership-based contractual relationships with suppliers. The new competitive dialogue and negotiated procedures, when used well, could create the foundations on which such partnerships can be created. Therefore, it is very much in the public sector’s interest and the wider public interest to ensure that it has the right mind set, leadership and technical expertise to use the procedures well. This means more than a technical “tick box” approach and requires political leaders and chief executives or their equivalent to be engaged and enthused.
These regulations will outlive the EU referendum debate and vote and, whatever the outcome of that vote, they will shape domestic procurement for many years. So let’s ensure that we make the most of them.