Procurement Update - January 2012

This update contains brief details of recent key developments relevant to those involved in procurement work.

09/01/2012

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Emily Heard

Partner

This update contains brief details of recent key developments relevant to those involved in procurement work. For a detailed overview of the proposed Public Sector Directive, see our article Proposals for new Procurement Directives.

If you have been forwarded this update by a colleague and would like to receive it direct please email Claire Booth.

All links are correct at the date of publication. In this update:

Policy and guidance

European Commission: New EU procurement thresholds


The European Commission has announced the new thresholds that apply from 1 January 2012.
For central government, including the NHS, the thresholds are: 

  • Works: £4,348,350 (€5,000,000) 
  • Services or Supplies: £113,057 (€130,000)

For other authorities, including local authorities and housing associations, the thresholds are: 

  • Works: £4,348,350 (€5,000,000) 
  • Services or Supplies: £173,934 (€200,000). 

The formal notice of the amendments, as well as other thresholds, is set out in Commission Regulation 1251/2011. (2 December 2011)

Cabinet Office: Procurement Policy Note 10/11 – New Threshold Levels for 2012 and changes in the use of the Accelerated Restricted Procedure
As well as announcing the new thresholds for 2012-13, this PPN also advises that wider use of the accelerated restricted procedure for ‘major public projects’ will not be relaxed as from 1 January 2012.  The Commission has now reviewed and subsequently withdrawn the rule relaxation set out in PPN 01/09, so the previous rules will resume for contract notices submitted to OJEU from 1 January 2012. So from that date the accelerated restricted procedure is once again only available in situations where urgency renders impracticable the time limits for the restricted procedure. (12 December 2011).

European Commission: Buying green! – A handbook on green public procurement (2nd ed)
The EC has revised its handbook that is a tool to help public authorities to buy goods and services with a lower environmental impact. The revised handbook explains the possibilities offered by EU law in a practical way, and looks at simple and effective approaches to greening contracts, following the logic and structure of a procurement procedure. It also gives many real examples of green purchasing by public authorities across the EU.
There is also a Summary Handbook that provides an overview of green public procurement in the EU. (25 October 2011)

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Legislation - EU

The European Commission has published proposed drafts of three new Procurement Directives.

European Commission: Proposal for a Directive of the European Parliament and of the Council on public procurement (COM (2011) 896)
This draft Directive is intended to replace the Consolidated Procurement Directive 2004/18. It follows on from the January 2011 Green Paper that sought views on options for legislative changes to make the award of contracts easier and more flexible and enable public contracts to be put to better use in support of other policies, including the need for simpler and more flexible procedures, strategic use of public procurement to promote other policy objectives, improving access of SMEs to public contracts and combating favouritism, corruption and conflicts of interest.
There is an equivalent draft Utilities Procurement Directive (COM (2011) 895) that will replace Directive 2004/17.  (20 December 2011)
Further details of the draft Directive are set out in Memo/11/931 – FAQs on Commission proposals to modernise the European public procurement market.

For a detailed overview of the proposed Public Sector Directive, see our article Proposals for new Procurement Directives.

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European Commission: Proposal for a Directive of the European Parliament and of the Council on the award of concession contracts (COM (2011) 897)
The European Commission has also published proposals for a Directive on the award of Concession Contracts.  Concession type contracts are those which involve transfer of risk to the concession partner which derives all or some of its income under the arrangement from third party sources such as payments from members of the public. Examples of concession contracts include operating a leisure centre, provision and operation of a port or toll road or running a car parks. Some of these concession contracts may also be referred to as PPPs.
Under the current EU public sector procurement rules works concessions contracts are subject to a lighter weight regime than that applying to the award of other public contracts. Service concession contracts are not covered by the EU procurement rules at all but they are subject to Treaty requirements.
UK authorities have tended to award service concession contracts using competitive procedures modelled on the EU procurement rules but this is not the case in some other Member States. The European Commission has identified this as a loophole giving rise to potentially serious distortion of the internal market by the direct award of contracts without any competition.
The new Directive on concession contracts governs the award of both works and services concession contracts. The requirements in terms of the procedures to be used are much “lighter touch” than the procedures applying under the public sector directive. There will be obligations to advertise in the OJEU for concessions over the relevant thresholds and a single statutory time period for submission of applications. There are limited obligations in terms of selection and award criteria and no specific type of award procedure is required. The Remedies Directive 2007/66 will apply to above threshold concession contracts.
For contracting authorities in the UK this introduces a less stringently regulated procurement process than may currently be used in practice for contracts which fall within the definition of a concession contract. (20 December 2011)
Further details are set out in the EC's Memo/11/932 – FAQs on the draft Concessions Contracts Directive.

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News

  • Cabinet Office: The Crown and suppliers: a new way of working
    Francis Maude, Minister to the Cabinet Office, has unveiled a package of measures that will revolutionise how the Government buys from the private sector. In his speech at The Crown and Suppliers: a new Way of Working event on 21 November 2011, he announced that the Government was committed to stripping out much of the bureaucracy in the current procurement procedures, including: 

  • making it 40 percent faster to do business with government by turning round all but the most complex procurement turnarounds within 120 working days; 
  • setting a presumption against the use of the “clunky” competitive dialogue; 
  • publishing £50bn of potential business online; 
  • negotiating with the EU for a radical simplification of the Public Procurement Directives; and 
  • collaborating with businesses at a much earlier stage in the procurement process so they don’t find themselves excluded from opportunities.
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    The Government Procurement Services legal services framework agreement allows customers throughout the public sector to place orders with Bevan Brittan LLP under standard terms and conditions of the agreement. We are appointed to the Full Commercial Panel and can therefore provide advice on a wide range of legal services covered by the framework, including: 

    • IT
    • Property and Estates
    • Employment and Pensions
    • Intellectual Property
    • PPP/PFI projects
    • Competition law
    • Telecommunications & ecommerce
    • Construction
    • Corporate & Finance
    • Public Procurement
    • Outsourcing
    • Regulatory law

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