Category: Politics of Procurement

Low value tenders post Brexit – improved opportunities for SMEs

With no requirements to comply with EU directives for public procurement, the UK Government is able introduce changes to how they procure below threshold goods, works and services.  
 
On 10 December 2020, the Cabinet Office published the Procurement Policy Note (PPN): Reserving Below Threshold Procurements – which outlines how central government buyers are encouraged to reserve low value tenders for Small and Medium sized Enterprises (SMEs), and suppliers in specific geographical regions from 1 January 2021. 


What does this mean for SMEs?

The introduction of this PPN is aimed at supporting SMEs by making more opportunities available to them, and increasing their chances of securing work with the public sector.

As part of its drive to level up the UK economy, the government is committed to tackling inequality and giving everyone across the country the opportunity to fulfil their potential. An economy with diverse, resilient and innovative supply markets provides the best environment to start and grow a business.

Point 16. Procurement Policy Note – Reserving Below Threshold Procurements

There are two ways that buyers are advised to create tenders which favour SMEs:

Reserving them by supplier location – buyers are able to open tenders which can only be bid on by suppliers located in a specified geographical area. The scope of these tenders can be UK wide or narrowed down by county. Buyers will not be able specify individual nations of the UK.  

Restricting the types of organisations that can bid for the work – buyers are able to specify that only SMEs and Voluntary, Community and Social Enterprises (VCSEs) are eligible to bid for the work. 

While the PPN applies to central government buyers, the wider public sector is “encouraged to apply the principles” outlined within – meaning as familiarity with these practices grows, so too will UK-led and SME specific opportunities. 

The PPN does not apply to low value tenders involving any provision of goods into Northern Ireland – which remains subject to EU regulations under Northern Ireland Protocol, avoiding a hard border with the Republic of Ireland. 


What are low value tenders?

Low value tenders are those which fall below specific thresholds, which have been identified to prevent discriminatory procurement practices. If buyers wish to reserve low value tenders, the current thresholds which tender values must fall below are:

Supplies & Services
< £122,976
ex VAT

Works
< £4,733,252
ex VAT

The EU thresholds introduced on 1 January 2020 will remain in place until 1 January 2022. Future thresholds will be determined by the World Trade Organisation (WTO) Government Procurement Agreement (GPA) – which the UK has been a member of since 1 January 2021. 


How do I find low value tenders?

There are thousands of portals through which public bodies can publish their notices, and it would take a lot of time and effort to try and locate every opportunity relevant to your business.   
 
Thankfully, Tenders Direct eliminates your need to search for tenders by collating every UK and ROI notice in one place, and alerts you to the tenders relevant to you. Our unique service ensures we are aware of every tender published, and allows us to guarantee that with Tenders Direct – you will never miss a tender again.  


Top 5 bid writing mistakes  
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Brexit and Public Procurement 
Read about the other changes introduced with Brexit’s conclusion on 1 January 2021.

Reserving Below Threshold Procurements 
View the full policy procurement note on GOV.UK 

Brexit and Public Procurement

The Brexit transition period concluded on 1 January 2021. This means the UK is no longer a member of the EU, and is now a member of the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA).

Key public procurement developments to be aware of: 

  • For any procurement started, and not completed before 31 December 2020, procurement regulations that were in place under the EU will still apply until the contract has been awarded. 
  • From 1 January 2021, the new e-tender service ‘Find a Tender’ will replace the Official Journal of the European Union in the UK for above threshold tenders. 
  • The existing UK government portals – Contracts Finder, Public Contracts Scotland, Sell2Wales and eTendersNI – will remain in operation and will be unchanged.   
  • While there will be no immediate changes to procurement policies, from 1 January 2021 the government will have the power to introduce new or temporary legislation.

How does Brexit affect finding new tenders?

Tenders Direct customers are unaffected by the introduction of Find a Tender Service. Our team of Sourcing Specialists upload high value notices published through the Find a Tender service, directly to Tenders Direct. Low value tenders will also be available as normal.

If you do not currently use a tender alert service, the introduction of the Find a Tender Service means you have another portal to check for opportunities – taking you more time to find contracts that are suitable for you. 
 
Thanks to our unique Peer Review Process, our team are able to source, review and classify all notices from Find a Tender. This process allows us to categorise notices based on the keywords you search for, creating an easy to search database. With full coverage of all UK and ROI tenders, as well as applicable EU notices, Tenders Direct offers the UK’s most accurate tender alert service.  


Your Questions

  • Are thresholds going to change?
    The EU thresholds introduced on 1 January 2020 will remain in place until 1 January 2022. Future thresholds will be determined by the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA) – which the UK has been a member of since 1 January 2021.
  • How will it be regulated to ensure all notices that are meant to be published on FTS are published on there?​ 
    No regulations have been introduced that we are currently aware of. This will work very much in the same way as Contracts Finder – notices ‘should’ be published to it. We will continue to use our Peer Review Process to ensure no tenders are missed, no matter where they are published.
  • Will the Find a Tender service display contracts published prior to 1 January 2021? 
    Find a Tender had a blank slate on the 1 January, meaning only notices published from that date forward will be visible. Tenders Direct will however still have details of all existing notices originally published on the OJEU.  
  • Will Tenders Direct still publish tenders from all sources?  
    Yes, Tenders Direct Will continue to provide full coverage. This means tenders from all official UK and ROI portals (this includes Contracts Finder and Find a Tender), all low-value notices from other sources, as well as high-value opportunities from the OJEU.
  • Will UK suppliers still be able to bid for OJEU tenders?​ 
    Yes, UK suppliers will be able to continue bidding for applicable OJEU contracts. 
  • Will we still be able to receive OJEU tenders notifications through Tenders Direct? 
    Yes, we will keep you informed of OJEU notices through both our alerts and tender search tool. 
  • Will there be an option to opt out of OJEU tenders?​ 
    Yes, you will be able to opt out by selecting ‘UK only’ in your profile. ​ 

Is there anything I should be aware of?

For the time being, procurement policies will remain closely aligned with the rules in place before Brexit. However, with no requirements to comply with EU directives for public procurement, the UK Government has scope to introduce changes.

Changes introduced post Brexit:


Further reading

The Policy Procurement Note: Introduction of Find a Tender explains the introduction of Find a Tender in greater detail. 

For details about other changes introduced as a result of Brexit, please view the UK Transition page on Gov.uk 

6 reasons why you should do business with the Public Sector

On average the UK Government spends £292 billion a year, more than a third of all public spending, on procuring goods, works and services from external suppliers. This money generates over 50,000 new business opportunities a year for many different industries.  


What is the Public Sector? 


The Public Sector is typically made up of not-for-profit organisations owned by central, national and local governments, for the benefit of their citizens. They cover areas such as defence, education, fire services, healthcare, police and refuse collection. 
 
As the public sector relies on public funding to make decisions, they are required to ensure their financial decisions are made respectfully, encourage free and open competition, achieve best value for money, and ultimately benefit the public. 


Reasons to tender for public sector work

  1. All contracts must be open and accessible – meaning no matter what size your business is, if you meet the criteria and can deliver the tender requirements, you have a fair chance of winning the work. This is different to private procurement where the buyer can choose who to inform of their procurement needs, and who to do business with.    
  1. The public sector wants to award work to SMEs – by 2022 the UK Government wants 33% of all public contracts to awarded to SMEs. SMEs make up 99% of all UK businesses and are vital for the economy.  
  1. 30 day payment period – all invoices for contracted work must be processed by public bodies within 30 days of receiving them, ensuring businesses get paid promptly. Lengthy payment periods can be an issue within the private sector, where larger businesses can dictate when they issue payment. 
  1. Transparent Tendering process – nothing is hidden in public procurement, decisions made are transparent, and suppliers will receive feedback if they did not win a contract. Private buyers do not have to make their processes public, and have no obligations to provide feedback to suppliers.  
  1. Most Economically Advantageous Tenders (MEAT) – is the chosen method of proposal assessment, meaning contract awards are not just based on price, and consider the wider aspects of tender submissions. Social Value is a major consideration in contract awards, and with the Procurement Policy Note – Taking Account of Social Value in the Award of Central Government Contracts, five key themes have been highlighted for central government contracts: COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunity, and wellbeing. 
  1. Continuously improving processes – to make bidding for work easier and less time consuming, the public sector continually work to improve their processes. Single Procurement Documents are a great example – where these are used, only the winning bidder needs to provide the required documents, saving you significant time and effort. 

Finding public Sector Work 

The public sector offers a reliable source of new business.   
 
From stationary to infrastructure and everything in between, the public sector needs suppliers like you. All notices must be publicly accessible online no matter the size, for any supplier to view and bid for.   
  
There are thousands of portals through which public bodies can publish their notices and you can spend a significant amount of time and effort trying to locate opportunities relevant to your business. Thankfully, Tenders Direct eliminates your need to search for tenders by collating every UK and ROI notice in one place, and alerting you to those relevant to your business.   
  
Tender Direct guarantees you will never miss a public sector notice.  
  
Request a demo today and discover all the opportunities you could be bidding for.  

Changes to procurement policy: Supplier relief due to COVID-19

Businesses of all sizes are feeling the impact of the coronavirus pandemic, and on March 20th the Cabinet Office issued reassurance to suppliers with the Procurement Policy Note: Supplier relief due to COVID-19. The document serves as guidance for public sector bodies on protecting suppliers, their workforce and supply chains, helping to ensure service continuity now and into the future. 

The policy changes have been put in place with immediate effect until 30 June 2020, and the key actions are:

  • Urgent review of contract portfolio and inform suppliers who they believe are at risk that they will continue to be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June.
  • Put in place the most appropriate payment measures to support supplier cash flow; this might include a range of approaches such as forward ordering, payment in advance/prepayment, interim payments and payment on order (not receipt). 
  • If the contract involves payment by results then payment should be on the basis of previous invoices, for example the average monthly payment over the previous three months. 
  • Ensure invoices submitted by suppliers are paid immediately on receipt (reconciliation can take place in slower time) in order to maintain cash flow in the supply chain and protect jobs.  
  • To qualify, suppliers should agree to act on an open book basis and make cost data available to the contracting authority during this period. They should continue to pay employees and flow down funding to their subcontractors. 

As a supplier, the final point highlights that during this period, you will need to work collaboratively and ensure there is full transparency and operate on an ‘open book’ basis. This means you should share data if requested, to demonstrate the payments you receive have been used in the manner intended.  

The PPN provides full details of how public sector bodies are to respond to issues that will affect contract delivery and are a direct result of COVID-19.

Click here to read the full PPN on GOV.uk

Changes to procurement policy: Responding to Covid-19

On March 18th, the government acknowledged the strain on the public sector by making changes to procurement policy, and ensuring resources can be sourced as a matter of urgency.

These policy changes allow for the following:

  1. direct award due to extreme urgency;
  2. direct award due to absence of competition or protection of exclusive rights;
  3. call off from an existing framework agreement or dynamic purchasing system;
  4. call for competition using a standard procedure with accelerated timescales;
  5. extending or modifying a contract during its term.

What does this mean for suppliers?

If buyers can demonstrate that they have an ‘extreme urgency’ for goods, services or works, and/or there are no other suitable suppliers, they can enter into contracts without competing or advertising as long as they have satisfied several criteria categories. On top of this, buyers also have the ability to make changes or extend existing agreements.

For accelerated timescales, you will have to pay very close attention to tender notices:

  • Check your tender alerts thoroughly.
  • Make sure you have the people and resources needed to complete your bid.
  • Ensure your pricing strategy works for your business.
  • Check you have addressed all the key criteria.  

For suppliers providing ‘non-urgent’ goods and services

Despite uncertainty with other industries, the public sector will always have a requirement for goods and services. In the last week, the number of tender notices published for the UK was 1613, which is not far off the weekly average of 1664 seen in 2019. Looking across the UK, ROI and EU, there are around 25,000 live notices.

There is reassurance in knowing that there is still a drive to maintain normality during such unprecedented circumstances. We will be keeping a close eye on these figures and letting you know if there are significant changes and providing you with more insight into the sectors that may be affected.


We hope your workplace has not been affected too dramatically by the unprecedented situations caused by COVID-19.

Wishing you the best of health.


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Comment on De La Rue taking steps to appeal against passport decision

UK passport

With the recent news* that British company De La Rue are looking to initiate appeal proceedings against the government’s decision to award the contract to make UK passports to French-Dutch company Gemalto, Penny Godfrey, General Manager of Millstream, comments:

 

“There are great benefits to British companies that have the opportunity to bid for European contracts and our public sector has to reserve the right to invite bids from outside the UK – these principles could shape how competitive our economy will be after Brexit. In this instance we must be aware that this display of political or domestic preference could be riding roughshod over fair market principles.

 

“De La Rue has the right to appeal the Government’s decision, but will have to base that appeal on a breach of wider procurement rules. There is no clear definition of what constitutes an abnormally low tender offer, but the risks to the contracting authority of an unsustainably cheap offer are clear: poor performance, the potential for hidden costs, and, ultimately, incurring the additional cost of re-tendering if things go awry.”

 

*Related article: http://www.bbc.co.uk/news/business-43623750

Public Procurement thresholds 2018/2019 – updated

New Public Procurement thresholds 2018/2019

New Public Procurement thresholds 2018/2019

2020/2021 Public Procurement Thresholds Update Available here *

Public Procurement thresholds 2018/2019 – updated

With the ongoing uncertainty over whether or not Brexit negotiations will result in an agreement, changes to public procurement remain a distinct possibility (see our blog on the UK Government’s contingency for e-procurement in the event of a “no-deal” scenario).

Despite this, it is important to remember that the regulatory framework for public contracts will remain in place in the UK for the foreseeable future regardless of the outcome. EU Public Contract Regulations were passed into UK law in 2015 and will remain in place unless or until they are repealed and replaced.

Considering the time frames involved in formulating and ratifying new legislation, the thresholds detailed below will almost certainly remain in effect until the end of 2019 regardless of the outcome of the negotiations.


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 and the Public Contracts (Scotland) Regulations 2015. These regulations transposed the European public contracts directive (2014/24/EU) into national law.

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.

Between the 2016/2017 thresholds and the 2017/2018 thresholds we have seen a small increase in the thresholds in both Pounds Sterling and Euros. Due to the relatively small increase it is unlikely that buyers or suppliers will notice much change in the size of contracts advertised at European level.

 

Public Contracts

Supply, Services[1] and Design Contracts
Works Contracts[2]
Social and other specific services[3]
Central Government[4]
£118,133

€144,000

£4,551,413

€5,548,000

£615,278

€750,000

Other Contracting Authorities
£181,302

€221,000

£4,551,413

€5,548,000

£615,278

€750,000

Small Lots
£65,630

€80,000

£820,370

€1,000,000

n/a
[1] With the exception of the following services which have different thresholds or are exempt:
– Social and other specific services (subject to the light touch regime) Article 74.
– Subsidised services contracts specified under Article 13.
– Research and development services under Article 14 (specified CPV codes are exempt).
[2] With the exception of subsidised works contracts specified under Article 13.
[3] As per Article 74. Services are listed in Annex XIV.
[4] Schedule 1 of the Public Contracts Regulations lists the Central Government Bodies subject to the WTO GPA. These    thresholds will also apply to any successor bodies.

 

Social and other specific services are subject to the ‘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 £363,424

€443,000

£4,551,413

€5,548,000

£820,370

€1,000,000

Defence and Security Contracts

Supply, Services and Design Contracts Works Contracts Social and other specific services
Defence and Security authorities

 

£363,424

€443,000

£4,551,413

€5,548,000

n/a

 

Clarifications

Concession Contracts

For the first time Concession Contracts are covered in EU Law under a separate directive and therefore separate regulations in the UK.

The EU Directive is found here:

http://eur-lex.europa.eu/legal-content/GA/TXT/?uri=celex:32014L0023

The UK regulations here:

http://www.legislation.gov.uk/uksi/2016/273/contents/made

The UK Directive outlines how the value of a concession contract should be calculated:

http://www.legislation.gov.uk/uksi/2016/273/regulation/9/made

The thresholds for publication in the OJEU refers to Article 8 (1) of the EU Directive which is:

  1. This Directive shall apply to concessions the value of which is equal to or greater than EUR 5 548 000.

The Sterling equivalent is £4,551,413

Calculating Estimated Value

The calculation of the estimated value of a procurement exercise 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.

Contracts Subsidised by Public Funds

All applicable contracts which are subsidised by 50% or more of public funds must be advertised in the OJEU. From time to time a public body may part fund a project and request that the recipient of funding must advertise the procurement in line with public contracts regulations even if their contribution is less than 50% of the overall value. As such any recipient of public funding on a project should verify with the funding body what is expected of them in procuring for the project.

What are Small Lots?

Read our blog about small lots.

How do I Know if a Contract is Classed as Works?

Many contractual requirements are a mixture of works and services. Whichever element is the highest in value should be taken as the contract nature when determining what threshold to apply. If you are unsure whether a specific element is classed as works or services then you can refer to Schedule 2 of the regulations which lists all activities which constitute works by CPV code:

http://www.legislation.gov.uk/uksi/2015/102/schedule/2/made

If the CPV code which fits your requirement is not in that list then it is not classed as a Works contract.

 

Tenders Direct can alert you to suitable public contracts as soon as they’re published. Visit our website or call us on 0800 222 9009 to learn more.

 

Procurement in the 2017 Manifestos – The Facts

With recent global, politically disruptive events such as Brexit and the election of Donald Trump, there were  already enough question marks floating around about what it would all mean for UK public sector procurement.

So now with the added and unexpected complexity of the 2017 General Election in just one week’s time, procurement professionals and suppliers msurvey-2316468_1280ay be wondering what changes procurement may face  12 months down the line.

At Millstream, we have taken a look at each of the main party’s manifestos to see what mention there is of procurement, and also if there are any major policies that might impact the sector.  NOTE: Text in italics is lifted directly from the manifestos.

Conservative

Labour

Lib Dem

PC

SNP

UKIP.png

So there you have it – Labour and UKIP have produced definitive actions regarding procurement which would have significant impacts on how the public sector procure goods, services and works. The other parties, focusing their messages on encouraging SMEs and localised spend.

Whatever your choice on 8th June, it is good to know how your vote might influence your job or your business.

 

Millstream Logo

 

References/links to Manifestos:

Conservative Party Manifesto

Labour Party Manifesto

Liberal  Democrat Manifesto

Plaid Cymru Manifesto

SNP Manifesto

UKIP Manifesto

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!

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