Category: Politics of Procurement

Procurement in the 2017 Manifestos – The Facts

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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.

 

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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?

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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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Procurement terminology: what are ‘small’ lots?

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In public procurement, lots, and in particular ‘small lots’ small lotare often an area of much confusion. What is a small lot and what does the small lot threshold mean?

Hopefully this SMALL blog entry will answer a LOT of your questions.

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Tendering in Ireland: A new era of fair procurement practice?

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Working with customers in Ireland through our Tenders Direct Ireland service we have traditionally heard anecdotal tales of poor procurement practices. Worrying issues such as cartels controlling certain sectors, bid price rigging and corrupt evaluation processes have all been highlighted not just by our customers but through news sources in Ireland. The net impact of this on the spend of buying authorities in Ireland is catastrophic: an Continue reading “Tendering in Ireland: A new era of fair procurement practice?”

New Public Procurement thresholds 2016/2017

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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.

SME access by splitting contracts into lots

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In 2014 the European Union adopted new procurement Directives for Public sector, Utility sector and Concessions contracts.  With the reform of the Directives they hope to achieve better access to public contracts for SMEs. One of the measures set into place to do this is the rule encouraging contracting authorities to split contracts into lots. The Public Contracts Regulations 2015 transposed the 2014 Public Sector Directive in February 2015, and with it the “Split your lots” rule. With this blog I hope to make it a bit more clear what a contracting authority is required to do.

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The ban on PQQs and restrictions for use of supplier questionnaires

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What many have failed to realise is that with the Public Sector Directive 2015 the Cabinet Office has introduced strong restrictions on Public Sector Buyers when it comes to prequalification of suppliers and the use of supplier questionnaires.

The use of prequalification procedures has been banned for some procurements and the use of standard supplier questionnaires introduced for others. Contracting authorities that fail to follow these restrictions are also expected to self-report. There is no doubt that these changes will have a big impact on the public sector going forward, and suppliers will be affected as well.

So why has this been introduced?

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Countdown to the 2015 General Election – Procurement in the manifestos

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With suppliers and buyers already busy understanding and implementing the 2015 Procurement Regulations they may find that the landscape shifts again after the general election in May. While the new regulations will stay in force and are unlikely to change with a new government, its important to understand what each of the main parties are saying about procurement and how that might impact the sector in the coming years.

Obviously wider policy initiatives such as NHS spending, defence projects and education reforms will have an impact on procurement but here is what each party has said in their manifesto about specific procurement policies (i.e. how they will change how procurement is conducted):

Conservatives

  • Will raise the target for SME’s involvement in procurement raising their share of central government procurement from 25% to 33%.

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New 2015 Procurement Regulations – Will SMEs benefit from the changes?

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The official public contracts regulations which govern UK public sector procurement have been published and are coming in to force on the 26th February 2015.

One of the main aims of the regulations and their precursor strategies ( such as Europe 2020 and the Lord Young report) was to encourage more participation from SME companies in tendering exercises and ultimately to get more SMEs supplying to the public sector.

The current government set the lofty target of 25% of government spend going to SMEs by 2015, a target which is a long way from being met so the key questions for organisations looking to supply into the public sector in light of the new regulations are 1) What has changed? and, more importantly, 2) What does this actually mean for me?

What has changed?

Some of the more significant changes in the new regulations are:

 

  • Tendering documents have to be available from the date of OJEU advertisement – no more registering interest and chasing for updates from the contracting authority.

 

  • Reduced timescales for procurement – on average they have reduced timeframes by a third and have introduced the new Accelerated Open procedure for OJEU tenders and have prohibited the use of a PQQ stage for low value contracts.

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EU Commission opens inquiry into UK financing for SME’s

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An inquiry to examine whether a UK scheme allowing publicly-backed funds to invest in Small and Medium Enterprises (SMEs) is being implemented in line with EU state aid rules. The opening of the inquiry gives interested third parties the option to comment on the measure under assessment.

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