Co-production Between Contracting Authorities and Social - PowerPoint PPT Presentation

Co-production Between Contracting Authorities and Social Enterprises – Complying with procurement law For the seminar, New opportunities for partnership between social enterprises and commissioning authorities , hosted by Bates Wells & Braithwaite on 8 July 2014 Alan Bates Barrister Monckton Chambers

Innovation Partnerships Under the New Public Sector Directive (1) • CAs and enterprises can partner together to develop new innovative solutions for meeting the CA’s needs, with the enterprise then supplying that innovative solution to the CA – E.g. Local authority wishes to be supplied with an innovative holistic package of services for helping young people who have been excluded from school and their families, with payment by results. Services should be competitively let. But since no such off-the-shelf solutions currently available, there may be a ‘Catch 22’ situation if the contract needs to be let in the usual way • The new Public Sector Directive provides a new way of doing this

Innovation Partnerships Under the New Public Sector Directive (2) • New Innovation Partnerships – key characteristics: – Allows CAs to invite suppliers to participate in establishing a structured partnership in order to develop a new product, service or work, or to materially improve an existing one, which the CA will then purchase – Competitive phase takes place at the very beginning of the procedure, when the most suitable partner(s) are selected on the basis of their skills, abilities and price – Different from the ‘competitive dialogue’ procedure: the possible solutions are discussed after a supplier has been selected, as opposed to being discussed with numerous potential suppliers before contract awarded

Innovation Partnerships Under the New Public Sector Directive (3) • New Innovation Partnerships – procedure: – Based on the ‘competitive procedure with negotiation’ – Competitive phase: partner(s) selected – Then the partner(s) develop the solution in collaboration with the CA. This R&D activity can be divided into several stages, during which: • the number of partners may be gradually reduced, depending on whether they meet certain pre- determined criteria • partnership may be terminated if it is not working out (e.g. if solution cannot be found, or proves more difficult or expensive than expected) – Partner provides the final solution (‘commercial stage’)

Joint ventures outside the procurement rules • Bear in mind that the Public Sector Directive applies only where a CA is procuring works, products or services under a contract • In some cases, there may be a true joint venture between a CA and an enterprise – What are the key differences between true JV and Innovation Partnership? – Will the product/service developed by JV need to be procured under the Public Sector Directive? – Will the service developed by the JV be a ‘service concession’ and therefore subject to the more liberal procurement regime under the Concessions Directive? – State aid considerations

Thank you for listening Alan Bates abates@monckton.com