Recent developments in procurement policies

Marina Javed, Browne Jacobson

August 2017 saw the Crown Commercial Service (CCS) release an update, covering developments, resources and commissioning opportunities including developments in procurement policies, as summarised below.

Background

Generally the object of public procurement policies is to ensure that value for money, quality and effectiveness is achieved through competition. EU legislation is adopted domestically to ensure that our public procurement markets are open and competitive, and that suppliers are treated equally and fairly. These practices are implemented through directives, with the most recent directives being implemented in to national law in April 2016, as follows:

  • Public Sector: Directive 2014/24/EU
  • Concessions: Directive 2014/23/EU
  • Utilities: Directive 2014/25/EU.

The UK‘s public procurement regime also continues to be subject to the World Trade Organisations Government Procurement Agreement. The procurement directives introduced in 2014 sought to simplify the rules and enable faster procurements, with less focus on red tape and a growing focus on finding the best tender/right supplier.

Procurement legislation

The Public Contract Regulations 2015 (PCR 2015) took effect from 26 February 2016 in respect of buying supplies, services or works above set financial thresholds. Requirements can differ depending on which organisation you are procuring goods on behalf of. For example, the defence and security sector must procure goods in accordance with the requirements of Defence and Security Public Contracts Regulations (DSPCR) 2011. Public contracts in the UK, which are below EU thresholds, are subject to the ‘sub-threshold contracts’ rules; covering requirements for advertising contracts below EU thresholds but above other threshold values.

As of 18 April 2016, the Utilities Contracts Regulations (UCR) and Concession Contracts Regulations 2016 (CCR) came in to effect; the CCS has issued policy note 18/15 which outlines those contracting entities to which the UCR is most applicable. Further amendments worth considering include the Public Procurement (Amendments, Repeals and Revocations) Regulations 2016.

For tenders falling outside of the PCR 2015, the principles of equal treatment, proportionality, non-discrimination, transparency and mutual recognition continue to apply. Therefore if the contract is likely to attract cross border interest, it must still be published in a way that allows suppliers in other member states to access the advertisement.

Key developments in the PCR 2015:

  • the abolition of pre-qualification stage for procurements below EU thresholds, and the requirement to consider guidance on qualitative selection issued by Cabinet Office for above EU threshold procurements
  • requirement for contracting authorities to insert provisions in contracts that help to ensure prompt payments are achieved all the way through the supply chain
  • public sector opportunities must all be published on Contracts Finder, as well as the requirement to publish award notices for contracts and call-offs form framework agreements.

Procurement Policy Note 08/16 introduced the standard selection questionnaire (SQ) which addresses frequently asked questions and provides guidance on using the SQ. The guidance is designed to help buyers determine if the supplier will be able to carry out the contract effectively. It considers factors such as financial strength and experience. This should be used in all major government procurements.

Policy Note 04/15 sets out a process to ensure bidders past performance is taken in to account. If a reference is requested the general position is that these requests should be accepted and accommodated. However it is worth noting that Procurement Policy Note 04/15 sets out specific procedures for instances where a reference is requested as part of the ‘taking account of bidders past performance’ section.

As of May 2016 the CCS have updated their Model Services Contract which should be adopted by all central government bodies, and other public sector buyers should they wish. The Short Form Terms and Conditions issue in April 2014 continue to be the most relevant terms and conditions for below threshold or low value procurements.

There have also been developments over recent years in the government’s target for the amount of government spending going to small and medium sized-enterprises (SMEs), with a third of central government buying to be with small businesses in the next three years. Steps have already been taken in order to make these opportunities more easily available to SMEs, for example through the introduction of the SQ and the increased use of Contracts Finder.

Other developments:

  • Procurement Policy Note 14/15 sets out details around providing support for the development of skills, in a bid to support the government’s commitment to increasing apprenticeships. This is applicable only where the contract has a value of £10 Million or more, lasting longer than 12 months
  • public procurement and steel: work is currently underway to extend the guidance on procuring steel to the public sector and providing a list of approved steel suppliers.

There have also been a number of developments in procurement policies for technology, including the Government Service Design Manual which should be considered by central government buyers before undertaking any tech-related spending. As of May 2013, government bodies must consider potential cloud solutions prior to exploring alternative options, under the ‘Cloud First’ policy.
For IT contracts the government departments should refer to ‘red line’ for IT contracts guidance (January 2014). These rules were designed to encourage competition whilst ensuring value for money through, for example, the increased use of smaller contracts, no automatic contract extensions and a two year limitation on hosting contracts.

Whilst the key developments have been included above there have been a number of others as detailed in the Crown Commercial Service update for August 2017, all with the ultimate objective of ensuring value for money is achieved in all procurements through the most open and effective means.