New European Procurement Rules
Posted by Tim Williams on March 26, 2013
The final revisions to the EU procurement directives are due next month. The main changes, so far, are as follows:
1. Greater involvement of small companies (SME’s)
Selection criteria must be “appropriate” and “related and strictly proportionate” to the subject matter of the contract. If they are used minimum turnover requirement must be no more than three times the contract value and insurance requirements must also be proportionate.
Purchasers will be required to divide tenders into lots wherever possible or provide an explanation of why they haven’t.
2. Financial Thresholds
Purchasers claimed that the rules made tendering more expensive and time consuming and would have liked the thresholds increased to remove the requirement for smaller contracts. In reality the market is more open through increased visibility of opportunities. The lengthy tender process is frequently due to poor organisation.
3. Changes to contracts
Changes to the terms of a contract have always been allowed where they are not material. Materiality is now defined as changes affecting less than 5% of the value.
As it’s our core business, I’m delighted to see the moves towards e-procurement. Contract notices must be submitted online and tender documents must be available for download when the notice is published.
5. In-house suppliers
A purchaser using its own resources to fulfil a need, has always been allowed. The test for in-house provision is set out in three parts:
- Control must be as if the contractor were an internal department;
- 80% or more of the contractor’s turnover is for the authority; and
- There is no private ownership.
6. Part A and B Contracts
I’m pleased to say that the artificial distinction between Part A & B categories of services will be removed. Part B services which previously haven’t subject to most of the rules, cover requirements such as accountancy, legal services, health and social services. There are of course national restrictions related to qualifications, etc., but if for example a UK company can satisfy French rules, why shouldn’t it bid for a contract in France on the same terms as a French supplier?