Public Procurement Law Update - New rules, same problems? Ruth - PowerPoint PPT Presentation

CIPS North East branch Public Procurement Law Update - New rules, same problems? Ruth Connorton and Tim Dennis 29 April 2015

Legal background  EU directives  Concession Directive 2014/23/EC  Public directive 2014/24/EC  Utilities Directive 2014/25/EC  English law covers Wales and NI (separate Scottish Regs)  Public Contracts Regulations 2015 (PCR)  Public Contracts Regulations 2006 (as amended) still valid for health service purchasing under NHS (Procurement, Patient Choice and Competition) (No 2) Regulations 2013 – health service purchasing by NHS England and CCGs and concessions  Case law  Guidance and PPNs

Concessions Directive  Works/ services concessions over threshold (£4,322,012)  Must include transfer of operating risk covering demand/ supply or both  All public, some utility provisions and defence  For social/ other services – contract notice and award notice only  Time limited - recoup investment and a return on capital  General process subject to Treaty principles  Minimum period for tenders 17 days  Award criteria in descending order of importance and potential to re- order where an unforeseen innovative solution with exceptional functional performance arises

PCR 2015  In force 26 February 2015  Procurements with contract notice on/after that date  Works, supplies, non “light touch” services  Existing thresholds apply  Light touch regime for social and other services - replaces Part B

“Social and other services”  Replaces Part B  Schedule 3 exclusive list of services by CPV code  £625,050 threshold OJEU advertising: contract notice or PIN published “continuously”   Treaty principles apply - equal treatment and transparency  Significant flexibility in process, time limits to be reasonable, no standstill required (?)  Contract award notice (can be published quarterly)

New obligations – SME friendly?  Contracts Finder notices (above and below threshold)  All procurement documents must be available via the internet from date of OJEU publication  Standard CCS PQQ mandated - England  No PQQ below goods & services threshold  Contracts Finder award notice (above and below threshold)  Contracts Finder notices for framework call-offs (any value)  Justification for not subdividing into lots  30 day payment terms throughout supply chain and annual reporting on compliance

Available procedures Procedure When? Open Freely available Restricted Innovation partnerships Where innovative need not freely available on the market Competitive dialogue Where needs: Competitive procedure with - adaptation of readily available solutions negotiation - design or innovative solutions - prior negotiation of contract needed - technical specification cannot be established Negotiated procedure Very limited grounds without prior publication Utilities free choice except negotiated without publication

Tendering processes Open Restricted Negotiated Comp Innovation dialogue partnership      Pre market engagement      Contract notice     PQQ x      ITT    Negotiation X X      Tender   Post selection X X X negotiation      Award  Further growth X X X X

Comp negotiation vs Comp dialogue  Competitive negotiation  Know needs and characteristics  Negotiate with all on basis of initial and subsequent tenders, but not final tenders (runs like restricted)  Competitive dialogue  Know needs and requirements  Dialogue with all to identify solutions and means best suited to satisfying needs, final tenders  Clarify, specify and optimise all tenders  Final negotiations to confirm commitments/ terms but not on essential elements or to distort competition

Innovation Partnerships  Must be able to identify a need for an innovative product, service or works that cannot be met by the current market  “Innovation” …new or significantly improved… including… production, building or construction processes, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations including…helping to solve societal challenges or support the Europe 2012 [2020] strategy for smart, sustainable and inclusive growth  One partner or several partners each conducting separate R&D  Negotiation permitted and must structure in successive phases: eg R&D, prototype, manufacture, delivery  Must establish IP rights base to go to market  Value of delivery not disproportionate to value of investment for development

Pre Market Engagement  Expressly permitted (and encouraged by Cabinet Office)  To prepare the procurement and inform the market of procurement plans and requirements  Authority must take appropriate measures to ensure that competition is not distorted  Can only exclude where there are no other means to ensure non- distortion of competition  Must provide the tenderer with an opportunity to prove distortion of competition will not result

CCS Standard PQQ  Must use for all procurements (including light touch) if over threshold  Core questions and additional modules  Must add your own evaluation methodology  “Reportable Deviations” cannot deviate from questions or question wording unless justified and then must report to CCS within 30 days of making PQQ available to candidates – from 1 September 2015  Cannot use PQQ stage below goods & services threshold  Will be replaced by ESPD - European Single Procurement Document

PQQ grounds  Mandatory exclusion criteria (5 years)  Discretionary exclusion criteria (3 years)  Significant or persistent deficiencies under a prior public contract which led to early termination, damages or comparable sanctions  Economic and financial standing  Minimum turnover (max 2x contract value unless exceptional)  Information on accounts (must state how scored)  Any minimum hurdles must be in contract notice or ITCI  Self cleansing/ declaration permissible  Continuing obligation throughout process

Contract award criteria Must award to “most economically advantageous tender”   On basis of price or cost – so can be price only  Or can include the best price/quality ratio  Price can include life cycle costing looking at acquisition, maintenance, end of life costs, usage eg energy consumption  Quality criteria can take into account e.g.  Technical merit, social, environmental and innovative characteristics  Qualifications and experience where significant impact on contract performance  After sales service

Frameworks  Methods of call off:  Single supplier framework – direct call off  Multi supplier framework – direct call off or mini-competition OR mini-comp only  Must set out in framework agreement:  Objective criteria for deciding between direct call-off or mini competition  How decision will be made if direct call off; and  Mini-competition award criteria  Must publish contract award information on Contracts Finder for each call off contract

Things not coming to market?  Continued in house provision  “Social and other services” no cross border interest (but still should be some competition for value/ governance reasons)  Not considered/ illegal process  Direct award to a mutual  Direct award to an in house service

Awards to mutual or social entities  Contracts for limited range of social/ other specific services including surgical and medical hospital services, education  Can restrict award to types of organisation where  its objective is a public service mission  profits are reinvested or distributed to participants  management/ ownership is based on employee ownership/ participatory principles  haven’t awarded a contract for those services by that authority in past 3 years  Limit of 3 years’ duration on the awarded contract  Competition amongst reserved bodies

“In house” awards  Structural (Teckal)- award to a legal person governed by private or public law  Control test - decisive influence over strategic objectives and significant decisions (can be jointly exercised)  Activity test - 80% of the activities must be carried out for the controlling authority  Capital – no direct private capital participation except required non-controlling, non-blocking without decisive influence  Public to public co-operation (Hamburg)  Co-operate to deliver public services driven by goal of achieving common objectives  Governed solely by public interest considerations  Perform on the open market less than 20% of activities