‘Part B Services’ verses ‘Light Touch Regime’

Under the new regulations ‘Part B services’ have been abolished and replaced with the new ‘light touch regime’. Below we cover what the new rules are, what has changed and whether this is a change for the better.

Part B Services: What were the rules?

Under the previous regulations all services were split into two – Part A and Part B. All services fell into one of 27 service categories – service categories 1-16 were Part A and subject to the full procurement regulations whereas service categories 17-27 were Part B and were essentially exempt from the rules (although an award notice was required). The service category that the service fell under was determined by the CPV codes. The purpose of this was to exempt services which were considered to not have cross border interest from the strict EU publication rules. Services are considered to not have cross border interest when it is unlikely that a service provider in one country can (or will be willing to) provide their service in a different country – for example, hotel services or legal service.

However, part B was occasionally taken advantage of and notices that did have cross border interest were incorrectly excluded from the rules. This was often due to the use of service category 27 which was “Other services” and covered any service that did not fall into the CPV codes listed under any of the other, more specific, service categories 1-26.

Light Touch Regime: What now?

When reviewing the legislation it was deemed that services with no cross border interest do still need to be treated differently however, much discussion took place to determine WHICH services were to be considered to not have cross border interest and WHAT the rules would be.

Light Touch Regime: Which services?

Under the new legislation the services subject to the light touch regime are “social and other specific services”. These services are still determined by the CPV codes and are listed under Schedule 3 of The Public Contracts Regulations 2015. This list includes services such as “hotel and restaurant services” that would understandably not have cross border interest – if a buyer requires a hotel in Manchester then a hotel based in Paris is unlikely to be able to offer their services. This new list is similar to the old “Part B” list however it is more exclusive.

These specified services have their own threshold and all services below this threshold are exempt from the EU procedure rules. This threshold is EUR 750 000 (paragraph 5  of the Public Contracts Regulations 2015 merely refers to the threshold set in Article 4(d) of the European Public Procurement Directive (2014/24/EU)).

Light Touch Regime: What are the rules?

Section 7 of The Public Contracts Regulations 2015 details the rules surrounding the procurement of services that are considered “social and other specific services” and above the set threshold of EUR 750 000. As explained in the EU fact sheet on a new simplified regime for service contracts the “contracting authorities have to publicise in advance their intention to award contracts of this value and announce the contract award decision after the procedure”.

The Public Contracts Regulations 2015 details the means in which the intentions should be publicised as one of the following:

• Publishing a contract notice:
  – Containing the required information detailed in Annex V, Part H of the EU Directive.
• Publishing a prior information notice:
  – Which is continuously published.
  – Containing the required information detailed in Annex V, Part I of the EU Directive.
  – Refers specifically to the types of services that will be the subject-matter of the contracts to be awarded.
  – Indicates that the contracts will be awarded without further publication and invites interested suppliers to express their interest in writing.

The regulations continue to detail the means in which the award should be publicised. An award notice must be published to OJEU and must contain the details specified in Part J of Annex V of the EU Directive. Interestingly, the regulations do allow for these award notifications to be grouped together and published on a quarterly basis.

The procedural rules are detailed in paragraph 76 of the Public Contracts Regulations 2015 and details the following:

• Free choice of procedure however must “be at least sufficient to ensure compliance with the principles of transparency and equal treatment of economic operators”.
• Contracting authority must include during the publication of their intention to award a contract the following information:
  – Conditions for participation.
  – Time limits for contacting the contracting authority (these must be “reasonable and proportionate”).
  – The award procedure to be applied.

Despite the above requirements, paragraph 76(4) of the Regulation states that “The contracting authority may, however, conduct the procurement, and award any resulting contract, in a way which is not in conformity with that information” in the following circumstances:

• “The failure to conform does not, in the particular circumstances, amount to a breach of the principles of transparency and equal treatment of economic operators”.
• If, prior to commencement of the procurement procedure, the contracting authority has:
  – “given due consideration to the matter”.
  – Concluded that there is no breach of the principles of transparency and equal treatment of economic operators.
  – Documented this conclusion and the reasons for it.
  – Notified all suppliers who have indicated an interest (and who have not yet been excluded) their intentions to proceed in a way which differs from the initial specified intention.

So although the buyer must specify the procedure, conditions for participation and the time limits they can change these specified conditions in the above circumstances. For example, if a buyer specifies that they will be proceeding with the restricted procedure but then changes to the open procedure then this will be allowable if the above circumstances are applicable.

‘Part B Services’ or ‘Light Touch Regime’? Which is better?

It is clear that the previous rules were much simpler however, in my opinion, the new rules do provide much more succinct rules. There should be a certain level of prior notification of a contract being tendered regardless of whether, in the opinion of the contracting authority, there is a cross border interest. Surely it is the decision of the supplier whether they wish to cross borders to provide their services? It is, however, understandable that the same level of administrative burdens placed on contracts that most certainly would have cross border interest should not apply to opportunities where the likelihood of their actually being a cross border interest is very limited. The new rules provide a much needed balance between the considerations of the supplier and the contracting authority.

A separate threshold being set for these types of services is sensible. Although many contracts may not initially be of cross-border interest, it is plausible that a contract may gain cross-border interest when it is of a higher value. It may become worthwhile for a service provider to consider outlaying the costs required to provide their services across the border.

I think that the new rules are a step in the right direction however they could benefit from some further coherence as the rules do appear to be a bit flimsy in places – for example, paragraph 76(4) (discussed above) seems to contradict what is previously dictated and could open the rules up to abuse. Only time will tell.

Where to publish your contract notices for “social and other specific services”?

The providers of the Tenders Direct Blog also run MyTenders, which offers a publication service to contracting authorities and allows you to publish notices to OJEU, Contracts Finder and directly to specified suppliers. This will allow you to carry out all stages of all of your procurement procedures in the one place. You have the ability to publish your PIN or contract notice to OJEU notifying your intention to proceed with the “light touch regime” and then proceed to either a non-OJEU contract notice (which can also be sent for publication in Contracts Finder should you wish) or if you would prefer to go directly to individual suppliers then there is the invitation only Quick Quote facility that allows you to select and invite specific suppliers. And finally, you can also publish the award notice to OJEU through the same portal.

For further information on how MyTenders can help you carry out fully compliant procurement procedures please call 0800 222 9009 or visit www.mytenders.org.