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Duncan Dallas

Brexit: A “historic moment from which there can be no turning back” – but what does it mean for public procurement?

eu-1473958_1920After the referendum result last June and the resulting legal challenges, parliamentary debates, votes and royal assent (not to mention the debates down at the pub and on social media) Prime Minister Theresa May has finally triggered Article 50 notifying the European Council of the UK’s intention to withdraw from the EU. Whichever side of the debate you found yourself on one thing is now clear – the UK is leaving the EU and that is likely to have a huge impact for us all.

Unfortunately, but unsurprisingly, the PM’s letter to the European Council triggering Article 50 made no specific reference to public sector procurement – it’s unlikely to be at the top of any agenda – but point v.i. of her “suggested principle” for the negotiation deals with trade.

If any major change is to come in relation to public procurement it will be as a result on the outcome of the negotiations relating to trade between the EU and the UK. It is important to note that at present and until the negotiations are complete and the UK leaves the EU, the procurement regulations will remain the same. The European Council’s Directive on Public Procurement has been transposed into UK and Scottish law by the current Public Contracts Regulations 2015 and Public Contracts Regulations (Scotland) 2015 respectively. After exiting the EU, the UK will have the option of amending or replacing these regulations but it seems unlikely that they will change drastically.

All EU member states have roughly the same ambitions when it comes to public sector procurement – openness, transparency, fairness, VfM, increasing access for SMEs – and therefore the current regulations were designed with these in mind.

If you were hoping for a removal of perceived EU “red tape” in public sector tendering I believe you’ll be disappointed. Indeed, you may instead experience some “red, white and blue tape” as the UK lawmakers amend the relevant regulations whilst ensuring that all the principles of good public procurement processes remain in place.

If the UK is to become part of the European Economic Area, a status held by the non-EU countries of Iceland, Norway and Liechtenstein then very little is likely to change. The EEA countries are bound by their membership agreement to follow the principles of EU public procurement and all three countries advertise their above threshold procurement requirements in the Official Journal of the European Union (OJEU).

Even if the UK does not join the EEA, it is still a signatory of the World Trade Organisation’s Government Procurement Agreement, which imposes the principles and practices of fair procurement on all its members. The public sector will still need to purchase what it does today and will need to advertise it openly. This may just mean that the opportunities are advertised on national platforms rather than in the OJEU. Either way you can be sure that Tenders Direct will be picking them all up and distributing relevant opportunities to our members!

millstream

Continued Growth in Public Sector Healthcare Spend

 

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Does your company provide products or services for healthcare services? If so, you should have more opportunities for bidding on public sector healthcare contracts.

Having analysed the volume of opportunities distributed by our Tenders Direct service we have found a 17% increase in public sector healthcare procurement contracts published in the last 12 months compared to the previous 12. This marks a third consecutive year the number of healthcare tenders has increased on the previous year.

A rise in outsourcing public health services, such as dermatology, ophthalmology and dental care, has contributed towards this increase.

The volume of tenders within community and out-patient healthcare has grown significantly. In particular, we’ve seen a 23% increase in the category for home care, sheltered housing, domiciliary care, day care, community care, respite care, end of life care.

So, why have we seen this increase?

In the public sector, there’s an encouraging trend for proactive healthcare such as a notable increase in tenders associated with ‘The Healthy Child Programme’ – the government’s early intervention and prevention public health programme. Tenders for NHS Health Checks and mental health services have also seen growth.

These trends go hand-in-hand with calls for improved cost and operational efficiencies within the healthcare sector. Earlier this year in his review of NHS England Trusts Lord Carter made fifteen recommendations on improving efficiency through better management of resources, transparency and streamlining services.

NHS Trusts in England are tasked with making £1 billion of savings specifically related to procurement, and it is therefore unsurprising that this process is becoming increasingly digital through eProcurement.

Thirty to thirty-five per cent of total NHS spending is on procurement so it’s important that efficiencies are made where they will have most impact.

We’ve seen first-hand how clarity and simplicity accelerates the procurement process and brings added transparency. This is critical in delivering the efficiencies set-out in the Carter Report but also drive further growth in private sector industries.

Have these increases in opportunities had a positive effect on your business? Please feel free to comment below.

If your organisation buys or sells healthcare products or services in the public sector or if you’d like advice on developing your tendering skills to win new contracts, visit our portals:

Link to Tenders Direct homepage        myTenders logo     LearningAndConsultancy2

New Public Procurement thresholds 2016/2017

The European Commission has confirmed the new financial thresholds to be applied to public procurement. The new thresholds will apply from 1st January 2016 and be in place until the end of 2017.

When procuring goods or services over the financial threshold a public authority must do so under the Public Contracts Regulations 2015 in England, Wales and Northern Ireland. Scotland has not yet transposed the new EU directive and so is still operating under the Public Contracts (Scotland) Regulation 2012. The new thresholds apply to all European Union member states irrespective of whether they have introduced the European legislation, which in any case they must do by April 2016.

The main point of interest from our readers’ perspectives is that buying organisations must advertise any requirement over the new thresholds in the Official Journal of the European Union (OJEU), rather than just advertising it nationally. The calculation of the estimated value of a procurement shall be based on the total amount payable, net of VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts as explicitly set out in the procurement documents.

The European Union is also a signatory to the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA) and so compliance with the European procurement directives is designed to ensure compliance with the GPA. While European legislation sets out the financial thresholds in Euros, the GPA defines them in the form of Special Drawing Rights (SDRs), which is an asset established by the International Monetary Fund (IMF). The value of the SDR varies daily and is based on the relative values of a basket of currencies consisting of the euro, Japanese yen, pound sterling, and U.S. dollar.While this time around the thresholds have been increased in Euros, the equivalent sterling value has actually decreased because of the strength of sterling against the Euro.

For UK buyers this means that they now have to publish more of their requirements, rather than less, in the OJEU and if anything is going to be more of a burden on their resources as they must adhere to stricter and more bureaucratic rules.

For UK suppliers this means that from 2015 to 2016 more UK contracts but fewer European contracts will be subject to OJEU publication. This could well mean that the competition on our own national contracts from across the channel will be stiffer but anyone from the UK looking to bid on EU contracts will have less opportunity than before.

A corporate blog wouldn’t be a corporate blog without me telling you our solution to the problems. For buying organisation’s in England we provide the mytenders service, which allows buying organisations to manage their OJEU and non-OJEU procurement exercises. Our helpdesk are well versed in EU procurement law, with some working towards the LLM Public Procurement Policy and Law at Nottingham University and another two having already attained distinction in this qualification. For suppliers we provide the Tenders Direct service, providing all the OJEU notices and sourcing all the sub-OJEU notices in the UK to give you our market leading notice alert service.

And so on to the new thresholds. I have provided the previous thresholds for 2014-2015 in brackets for reference.

PUBLIC CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Central Government £106,047 (£111,676)€135,000 (€134,000) £4,104,394 (£4,322,012)€5,225,000 (€5,186,000) £589,148 (n/a)             €750,000 (n/a)
Other contracting authorities £164,176 (£172,514)€209,000 (€207,000) £4,104,394 (£4,322,012)€5,225,000 (€5,186,000) £589,148 (n/a)            €750,000 (n/a)
Small lots £62,842 (£66,672)      €84,000 (€80,000) £785,530 (£833,400)€1,000,000 (€1,000,000) n/a

 

Social and other specific services are subject to the new ‘light touch regime’ as described in a previous blog.

UTILITY CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Utility authorities £328,352 (£345,028)€418,000 (€414,000) £4,104,394 (£4,322,012)€5,225,000 (€5,186,000) £785,530 (n/a)             €1,000,000 (n/a)

 

DEFENCE AND SECURITY CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Defence and Security authorities £328,352 (£345,028)€418,000 (€414,000) £4,104,394 (£4,322,012)€5,225,000 (€5,186,000)  

n/a

 

As ever, please don’t hesitate to let us know what you think by commenting below.

Introduction to new bloggers – your ideas welcome!

I’d like to introduce two new bloggers to the Tenders Direct blog. I’m Duncan Dallas and I am the Government Contracts Manager at Millstream. I am responsible for the national public procurement advertising portals that we operate – Sell2Wales and Public Contracts Scotland. As both buyers and suppliers use these portals I’m interested in both sides of the procurement process and particularly in improving the communication between the two. Outside of work I’m a music and football obsessive.

John Cutt has also joined the blogging team. John is one of the Tender Reviewers for Tenders Direct. A large part of John’s role is to review every single notice that is processed through the Tenders Direct service to ensure that it is allocated the correct categories and reaches the right clients. John is our resident Trekkie and has an interest in military history (on earth and in space).

Now that the introductions are over we’d like to hear from our readership on what procurement related topics you’d like to see this blog cover. This isn’t to suggest that we’re running dry of ideas – we have an exciting schedule coming up – it’s just that we’d like to have input from you. Is there anything specific you’d like us to inform on? Are there any clarifications relating to the new procurement regulations required? Please leave a message below!

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