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Public procurement: a time of flux

  • Public procurement is a significant area of legal risk for police forces.
  • At the end of 2011 the European Commission published its proposals to modify EU public procurement rules.
  • From January this year, the government has committed to introducing lean sourcing processes for all but the largest procurements.
  •  It is a time of flux for the public procurement regime and TLT is at the heart of these changes - advising government through its contributions to the Procurement Lawyer's Association review and closely monitoring the outcome of the current lean procurement initiative.
European developments

In early 2011 the European Commission circulated its Green Paper, 'Towards a more efficient European Procurement Market', seeking views on measures aimed at simplifying the procurement rules and making the award of contracts more flexible. Following various responses, the outcome was the European Commission's proposals to modernise the public procurement rules, published on 20 December 2011.

To give a flavour, the proposals included:

  • introducing greater flexibility in the procedures available to contracting authorities: in particular introducing a new competitive procedure with negotiation and relaxing the conditions for the use of the competitive dialogue procedure such that it is no longer restricted to use in the most complex cases;
  • the shortening of time limits for participation and submission of offers to allow for quicker and more streamlined procedures;
  • the abolition of the distinction between part A and part B services;
  • codifying the in-house exemption and rules around inter-authority co-operation; and
  • a lighter touch regime for sub-central contracting authorities like police authorities: where a prior information notice is published, for instance, a separate contract notice will not be required before commencement of the procurement procedure.
  • Negotiation to finalise the text of the proposed amendments currently continues at an EU level with input from the individual member states. Following this, the question will arise as to how the UK intends to implement the changes which, on the current timetable, must be done before mid-2014.
Domestic developments

In addition to the reforms proposed by the European Commission, there is also a push for change to public procurement practices from quarters closer to home. While there is a degree of overlap in the impetus for reform, there are also drivers for change that are distinct to the national arena.

Over the last 18 months, in relation to public procurement, the government has announced a series of measures aimed at implementing lean sourcing principles to increase efficiency, increasing the profile of SMEs and generally delivering better value for the UK.

At the end of 2010, a "Lean review" was conducted to identify wasteful practices and to consider ways to rectify them. The conclusion was that significant savings of time and cost (both to suppliers and contracting authorities) could and should be made. At the start of the year the Cabinet Office mandated that lean sourcing principles are applied to all procurements across central government for all but the very biggest procurements. While this mandate does not currently include police authorities, we have experience of where oversight of the Cabinet Office has resulted in pressure upon police forces to explain their procurement procedures and documentation.

The seven key principles underpinning the strategy are:

  • establish a clear understanding of the required business outcomes;
  • carry out extensive pre-procurement market engagement;
  • establish a strong planning and management discipline;
  • ensure proper readiness to go to market;
  • streamline engagement with the suppliers;
  • use OJEU compliant e-sourcing tools; and
  • drive continuous improvement and reductions in procurement turnaround times by monitoring and measuring performance.
As part of the new strategic approach the Cabinet Office has also followed up on its Autumn Statement by facilitating collaboration with businesses at an earlier stage in the procurement process, publishing its medium term procurement needs for certain sectors and committing to extend this approach to other sectors. It has also committed to continue negotiating at EU level to ensure that the reforms discussed above deliver a simplification of the regime that dovetails with the UK's national strategy.

Comment

With what are, on their face, some contradictory changes proposed domestically and in Europe, the precise shape of public procurement in 2014 is not yet certain. The outline that is emerging, however, is that tender processes should be simpler and swifter, with greater flexibility for authorities in the way that they are structured. Whilst developments along these lines are to be welcomed, recent case law has demonstrated an increasing focus by the courts on the application of the general principles of EU law that underpin the public procurement regime. Even in a future world of "leaner", more flexible procurement exercises, contracting authorities will still need to ensure that they are acting in compliance with these general principles. Obtaining advice at an early stage on the design of a particular process is usually the best approach. It saves on costs, avoids delay and reduces the risk and disruption of challenge.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2012. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

TLT LLP is a limited liability partnership registered in England & Wales number OC 308658 whose registered office is at One Redcliff Street, Bristol BS1 6TP England. A list of members (all of whom are solicitors or lawyers) can be inspected by visiting the People section of this website. TLT LLP is authorised and regulated by the Solicitors Regulation Authority under number 406297.



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