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Changes to the law on procurement

There are some changes under way with respect to the law in relation to procurement. New rules are being introduced across Europe and this autumn this government released the first draft of new regulations that will implement the Europe-wide changes in the UK. The new European rules are based on three new procurement directives that were published earlier this year covering (1) public contracts (2) utilities contracts and (3) the award of concessions. The new proposals with respect to public contracts were published as The Public Contracts Regulations 2015 and when in final form this document will replace the Public Contracts Regulations 2006.

The EU directive will have significant impact on the current UK system at all points in the procurement process, from advertising for tenders to awarding to the winning bid. Strategies, processes and internal structures will all need to be revised in the light of the new rules as the selection and award criteria have been substantially reviewed and enhanced. There is now more importance placed on transparency, in line with many of the more recent changes introduced by EU law. Areas of possible conflict are now far more of a focus than was previously the case and equal treatment of suppliers is key, with new rules on disclosure of certain aspects of supplier involvement seeking to ensure that this is the case across the board.

Two newly introduced procedures are designed to enable a better spread of processes for the procurement system in the future. Changes to a number of existing procurement procedures have been introduced with the EU legislation – including Dynamic Purchasing Systems (i.e. the electronic process for making commonly used purchases for a period of up to four years, as defined by the European Commission) and Framework Agreements. The use of electronic catalogues in tender exercises is potentially on the cards too, with contracting authorities having the option to require tenders to be presented in the format of an electronic catalogue, enabling entirely electronic processing – something the UK’s HMRC is already using for procurement as part of its e-trading system for the purchase of goods and/or services. The context for the new EU legislation is, in part, case law but also the Treaty of Lisbon. As a result, it is being heavily driven by environment, social and labour law and Social Characteristics could well be used as one of the award criterion.

Whether a buyer or supplier, it’s key for all parties that changes introduced by this legislation are implemented swiftly where there will be impact. As the EU legislation affects just about every key area of the process, from selection and award criteria to conflicts of interest, there is little room for falling out of step. The government has specifically expressed an intention to implement the new legislation as early as possible after the consultation on the Public Contracts Regulations 2015 has closed, which is another reason why organisations need to start considering the changes now. Once the consultation has closed, the idea is to quickly move to finalise the regulations so that they will be ready to come into force in spring 2015. In order to do this the regulations will need to have passed through parliament in advance of the pre-election dissolution of parliament on 30th March.

If you have a question about procurement please contact our commercial solicitors on 01616 966 229 for more information.