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Reform of the public procurement regime

Provisional agreement has now been reached on the three new proposed EU public procurement directives. With the Cabinet Office preparing ambitious plans for early transposition, "so that the UK can take advantage of the additional flexibilities in the new rules as soon as possible", contracting authorities are advised to prepare for the new regime sooner rather than later.

Background and timing 

At the end of 2011 the European Commission published its proposals to modernise the public procurement rules. The stated aims of its measures were to simplify the procurement rules and make the award of contracts more flexible. After eighteen months of scrutiny, debate and negotiation, in June 2013 the EU Council, Commission and Parliament reached provisional agreement on the text of the three new proposed directives: the revised public sector directive (which is the focus of this update); the revised utilities directive; and the new concessions directive. Shortly after, in July 2013 the Cabinet Office issued a procurement policy note (PPN) on the progress of the modernisation of the procurement rules, stating that the revised package represented an excellent outcome for the UK.

The final outstanding stages of the formal EU process is for the European Parliament to approve the package (this reading is currently scheduled for 9th December 2013) and for the EU to adopt the package and publish the new Directives in the Official Journal of the European Union. Member states will then have up to two years to make national implementing regulations, transposing the package into national law. There is now very limited scope to influence the substantive content of the UK's implementing regulations but there are a few areas where the directives permit a policy choice on how to implement certain provisions. The Cabinet Office has indicated that it will consult on draft implementing regulations before they come into force.

The new regime will bite on any new procurement exercises commenced after the date upon which the new rules take effect in the UK. As the Cabinet Office has indicated that it intends to implement the directives swiftly, contracting authorities should not delay in familiarising themselves with the new regime and planning for the changeover. Further PPNs will be published in due course, the next one, which will set out the indicative UK timetable for implementation, will be published when the EU adopts the new package.

Key changes

While the basic principles of the EU Treaty haven’t changed, such that contracts are still required to be awarded transparently and without discrimination, the new rules include a raft of, sometimes complex, changes to the way in which public procurements must be conducted. The PPN includes a summary of the reforms (listing over 20 headline changes in Annex A), but to give a flavour they include:

  • codifying the in-house exemption and rules around inter-authority co-operation;
  • greater freedom to negotiate by relaxing the constraints on using the negotiated procedure;
  • new rules to encourage and allow preliminary market consultation between buyers and suppliers;
  • the introduction of a new "Innovative Partnership" procedure;
  • shortening of statutory minimum time limits by which suppliers must respond;
  • clarification that contracting authorities can take into account relevant skills and experience of individuals; and
  • a simpler process for assessing bidders' credentials.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2013. 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.

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