This update contains brief details of recent news, legislation, cases and other developments relevant to those involved in procurement work.

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

All links are correct at the date of publication.

In this update:

Policy and guidance

  • Audit Commission: Valuable lessons - Improving economy and efficiency in schools
    This report examines how schools could save £400m a year if they bought equipment and services more sensibly. The report concludes that the Commission can’t be sure whether the taxpayer is getting value for money. It says that school inspections focused on educational standards and what teachers do, which is necessary, but pay less attention to economy and efficiency. Councils also pay insufficient attention to value for money in their support of schools. Many school governors should be tougher in seeking value for the public purse. (30 June 2009)

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    DCLG: National procurement strategy for the fire and rescue service in England 2009-12
    Sets out the framework for collaborative procurement within the Fire and Rescue Service (FRS) in England from 2009 to 2012. It also sets out the role and contribution of the professional buying organisation for the FRS, currently Firebuy Ltd, and how this will revolve over the coming months and years.  (7 August 2009) 

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    OGC: Procurement policy note – third party accreditors: Information Note 09/09
    This note clarifies and re-states the OGC position on third party accreditors: that contracting authorities should not make registration or accreditation with a particular fee-based accreditation body or organisation a condition for bidding for a contract. (19 August 2009) 

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    OGC: Procurement policy note - policy on standards and references: Information note 10/09
    Emphasises the recommendations of the Glover Review regarding: the requirement in public procurement to accept equivalent standards and evidence from organisations bidding for contract opportunities; and the requirement to accept from bidding organisations both private and public sector-based references and evidence of capability.  (19 August 2009) 

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    OGC: Access for All programme - documentation for feedback
    OGC is seeking views on four draft documents that are working towards a number of the recommendations from the Glover Review: Accelerating the SME Economic Engine, that looked at the barriers which small and medium sized firms face when competing for public sector contracts. Note that some of the deadlines for responses have passed. The documents cover:

  • Below threshold PQQ : consultation closed on 26 August 2009; 
  • Contract award notification: consultation closed on 26 August 2009; 
  • Electronic tendering guidance: closes on 16 September 2009; and 
  • Contract flagging: closes on 30 September 2009.

(24 August 2009) 

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OGC Draft Procurement Policy Note – Publication of contract award notices for all contracts let with a value in excess of £20,000
OGC has recently consulted on a draft PPN that will require all central government departments to publish details of all contract awardees for those contracts that have a total value of £20,000 or higher. Notices are to be published on authorities’ websites within 48 days of contract signature, using the standard form. The consultation closed on 18 September 2009. 

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OGC: ICT Model Services Agreement and guidance (v2.3)
The OGC has published an enhanced version of the ICT Model Services Agreement and Guidance for major or complex ICT enabled business change projects, which includes significant updates in the key areas of financial distress and security management. The new version is available on Partnerships UK’s website (password required). (13 August 2009) 

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IDeA: Equality guidance on procurement
The Equalities Bill currently before Parliament imposes a new Single Equality Duty on public authorities. It also gives Ministers a regulation-making power to impose specific duties in relation to public procurement functions. This guide provides both legal and practical guidance on how to apply equality and diversity in the key stages of the procurement process. It aims to clarify what needs to be done, how to do it and assist authorities to meet their legal and other requirements more efficiently by sharing relevant documents and approaches. (24 August 2009) 

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European Union

Directive 2009/81/EC on the co-ordination of procedures for the award of contracts by contracting authorities or entities in the fields of defence and security
The new Defence Procurement Directive came into force on 21 August 2009 and must be transposed into national law by 21 August 2011. The new rules apply to the procurement of arms, munitions and war material and also to sensitive non-military contracts in areas such as protection against terrorism which often have similar features to defence contracts. Up to now, the vast majority of defence and sensitive security procurement contracts have been exempt from the Internal Market rules as the existing EU procurement rules are considered to be ill-suited for most defence- and security-related purchases. The Directive will open up the Internal Market by introducing transparent and competitive procurement rules specifically adapted to the needs of these highly sensitive sectors. Member States can still use Art.296 EC to exempt defence and security procurement contracts which are so sensitive that even the new rules cannot satisfy their security needs; in most cases, however, Member States should be able to use the new Directive without any risk for their security. 

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News

OFT: Construction firms fined for illegal bid-rigging
The Office of Trading has fined 103 construction firms a total of £129.5m, with average fines of £1.26m or 1.14% of their annual global turnover, for anti-competitive practices including bid-rigging and cover-pricing, following a five-year OFT investigation. The OFT has indicated that the companies will be given time to pay the fines. The OFT says that most of the firms it investigated were involved in cover pricing; however, it found six instances of more serious anti-competitive behaviour, where successful bidders had paid an agreed sum of money to the unsuccessful bidder, known as a 'compensation payment'.
The press release includes links to a list of Parties and fines and also a Table of infringements.
The OFT has also issued an Information note to procuring entities in the public and private sectors regarding the OFT’s decision on bid rigging in the construction industry that sets out the OFT's views on steps that procurers may be considering as a consequence of the OFT's Decision: specifically, the exclusion of the parties from future tenders. It urges public bodies and employers not to blacklist the companies that have been fined because it could not investigate all companies and because the practices were "endemic" within the construction industry, so not all the perpetrators have been caught. The fines should, as OGC guidance indicates, be treated as an optional not mandatory criterion for rejecting bidders under reg.23 of the Public Contracts Regulations 2006 (as amended). (22 September 2009) 

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Partnerships UK: Partnerships UK joins with 4Ps to create a new joint venture – Local Partnerships
Announces the formation of a new organisation, Local Partnerships, designed to work both for and with local public bodies and to support the improvement of public services and infrastructure at the community level. The new body, owned jointly by the LGA and Partnerships UK, will comprise all of the activities of local government’s project delivery specialist 4Ps, as well as a number of Partnerships UK’s activities. It will provide expertise to support commissioning, market shaping and market management, project management, procurement and contracting in public bodies. It will also deploy human and financial resources to assist in the development of a strong, mixed economy of providers of public services, including public, third and private sector bodies. Local Partnerships started operating on 3 August 2009. (1 July 2009) 

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IDeA: Leading the way by working together
The nine Regional Improvement and Efficiency Partnerships (RIEPs) were created in April 2008 with a three-year funding package of £185m to build on the successful foundations laid by the former Regional Improvement Partnerships and Regional Centres of Excellence. They help councils deliver the ambitious outcomes set through local area agreements by supporting them in their efforts to become more efficient, innovative and engaged with citizens. This is the first annual report from the RIEPs. It reflects on how the different parts of local government are working together to improve services and the places people live, illustrated with a series of recent case studies. (6 July 2009) 

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DCLG: Radical new project begins to cut red tape and improve local services
Announces the 13 pilot areas for the Total Place initiative that will examine all the spending going into an area, cutting bureaucracy and making money work harder. The initiative has £5m funding to map flows of public spending in local areas and make links between services, to identify where public money can be spent more effectively. This was part of Sir Michael Bichard's recommendations in the Operational Efficiency Programme report which looked at the scope for efficiency savings in the public sector. (30 July 2009)
See also  the  IDeA's Total Place web page that links to information on the Total Place initiative and gives details of the 13 pilot areas participating in the scheme. (1 September 2009) 

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DCLG: Local government must spend £42bn better
At a meeting of procurement experts from the private sector, academia and the public sector, the Communities Secretary has spoken about local authorities’ need to use their buying power to innovate and shape markets. The panel discussed the potential market shaping role of local government procurement, including its ability to encourage new and innovative technologies that can be triggered by a more open approach from local authorities, including improving access for small and local business or third sector organisations. Lessons learned from the round table will be used to direct DCLG's efforts to support and challenge work within local government as it goes forward. The press release includes examples of good local government procurement practices. (24 September 2009) 

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The Buying Solutions 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 the full range of commercial legal services including: 

  • IT
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  • PPP/PFI projects
  • Competition law and state aid 
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  • Regulatory law