Category: Procurement Law

New Public Procurement thresholds 2020/2021

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New Thresholds

The European Commission published the updated procurement thresholds for 2020/2021 on the 31st of October 2019.

There is still much uncertainty about what will happen next with a confirmed Brexit delay until 31st of January. Much will depend of the results of the upcoming election on the 12th of December 2019.

For now, United Kingdom remains a part of European Union and the new thresholds will therefore apply from 1st of January 2020.

Regulation

The Regulations set out detailed procedures for the award of contracts whose value equals or exceeds the procurement thresholds. Details of the Regulations are given below.

England, Wales and Northern IrelandScotland
The Public Contracts Regulations 2015The Public Contracts (Scotland) Regulations 2015
The Utilities Contracts Regulations 2016The Utilities Contracts (Scotland) Regulations 2016
The Concession Contracts Regulations 2016The Concession Contracts (Scotland) Regulations 2016
The Defence and Security Public Contracts Regulations 2011

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

Public Contracts

Thresholds are exclusive of VAT.

 Supply, Services and Design ContractsWorks ContractsSocial and other specific services
Central Government

£122,976

€139,000

£4,733,252

€5,350,000

£663,540

€750,000

Other Contracting Authorities

£189,330

€214,000

£4,733,252

€5,350,000

£663,540

€750,000

Small Lots

£70,778

€80,000

£884,720

€1,000,000

n/a

Small lot is a contract, or part of a contract, that is exempt from the public procurement rules. You can read more about it here.

Utility Contracts

Thresholds are exclusive of VAT.

 Supply, Services and Design ContractsWorks ContractsSocial and other specific services
Utility Authorities

£378,660

€428,000

£4,733,252

€5,350,000

£884,720

€1,000,000

Concession Contracts

Thresholds are exclusive of VAT.

 Concession Contracts
Authorities

£4,733,252

€5,350,000

Defence and Security Contracts

Thresholds are exclusive of VAT.

 Supply, Services and Design ContractsWorks ContractsSocial and other specific services
Defence and Security Authorities

£378,660

€428,000

£4,733,252

€5,350,000

n/a

 

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Timescales under the 2015 Public Contracts Regulations – updated

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We regularly receive queries regarding the minimum timescales that apply in each type of procurement procedure. These timescales specify the number of calendar days required between a notice being sent to the Official Journal of the European Union (OJEU) for publication and the deadline for submission of responses.

The timescales can often cause concern with both suppliers and buyers due to the delay between submission of a notice to the OJEU and it’s publication. It can take at least 48 hours for a notice to be published after it is submitted, during which time there is an embargo on it being advertised nationally (for more information please see this blog).

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Framework Agreements: What You Need to Know

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What are framework agreements?

Frameworks are “umbrella agreements” that sets out the terms – particularly relating to price, quality and quantity – under which individual contracts (call-offs) can be awarded throughout the period of the agreement (normally a maximum of 4 years). They are typically used when the buyer(s) identify a need for specific products or services but are unsure of the scope or time-frame.

Continue reading “Framework Agreements: What You Need to Know”

Free Webinar: ESPD for Buyers

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ESPD Buyer Webinar

Are you ready for ESPD?

Join us at 1.00pm on Thursday 19 April for a free webinar to find out more about how to create an ESPD request. We’ll also explain more about the different versions of ESPD as well as what impact Brexit will have on the document.

Book my space

Free Webinar: ESPD for Suppliers

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ESPD for Suppliers

There has been a lot of talk about the European Single Procurement Document (ESPD) but what is it, what do you need to know about it and why are there so many versions of a ‘single’ document?

Join our webinar on Wednesday 18 April from 1.00pm to 1.45pm where you’ll find out:

• What the ESPD is and why is has been created
• How it is implemented across the UK
• How to create an ESPD
• What impact Brexit will have on the ESPD

Book your place

Public Procurement thresholds 2018/2019 – updated

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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.

 

When a local tragedy highlights national public procurement concerns

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In light of the recent Grenfell Tower tragedy that shocked the nation, questions are being raised over local procurement policies across the country. Cost effectiveness and value for money are often the paramount objectives as local authorities continue to face budget cuts. It is paramount however that quality, and more importantly safety, is not jeopardised. Finding the right balance between cost saving and procuring services and products that are fit for purpose is key, but ultimately the welfare and well-being of the end user should be the priority.

Any buyer knows that cost doesn’t necessarily represent value or indeed quality but regardless, detailed specifications are there to be met and for a very important reason. What and who determines the specification, and exactly what this entails, is an important question and something buyers throughout the supply chain must be conscious of.

British safety regulations across many industries tend to be based on principle rather than set rules[1] which can create significant challenges to maintaining consistency and standards. Setting higher standards and adhering to best practice, rather than going with the cheapest bid which meets the specification, is something public procurement officers and regulators must consider.

This reinvigorates the debate over who should set these specifications and regulations. Should they be written by ‘experts’ from the relevant department of the contracting authority, or by that authority’s procurement officers? Or should this role be out-sourced to a third party within that particular industry and sector?

For example and in the case of the Grenfell Tower tragedy, there are no regulations stating fire-retardant cladding material should be used on the exterior of tower blocks and schools[2]. However, it has become clear that industry body, Fire Protection Association (FPA), has been lobbying for this to be a statutory requirement within local authorities and businesses.

Within just one area of local government procurement, say for instance housing and more specifically high rise residential buildings, the vast number of tenders and therefore specifications to be met, add to the complexity. Issues around accountability and quality rise as the procurement complexity grows. Combined with a need to cut costs, this becomes a significant challenge to overcome and get right. But get right all parties must.

In coming months as the impending public enquiry into the Grenfell Tower tragedy continues, more questions on how to improve the public procurement system will undoubtedly follow. Regardless of its outcome, more focus will be placed on the decisions that buyers make, transparency, and who is most qualified to set specifications.

Hindsight is a wonderful thing but nonetheless, there are some important lessons our sector can take away from this tragedy. Steps must be taken to ensure buying decisions are not considered a risk factor in the future.

I am keen to find out how you, as Buyers, feel about the responsibilities you encounter on a day to day basis and how you deal with this pressure. Please let me know your thoughts in the comments below.

[1] https://uk.reuters.com/article/britain-fire-cladding-idUKL8N1JD3YI

[1]https://www.theguardian.com/uk-news/2017/jun/16/manufacturer-of-cladding-on-grenfell-tower-identified-as-omnis-exteriors

 

 

 

 

 

Passive Housing by 2020

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building-419204_1920Passive Housing or ‘Passivhaus’ is a building standard that is energy efficient, comfortable, affordable and ecological at the same time.

For buyers and suppliers in the construction industry, the Energy Performance of Buildings Directive was revised in May 2010 and called for all EU member states to require all new builds to be ‘nearly zero energy’ by the 31st December 2020.

What is passive housing?

Passive House characteristics:

  • Passive Houses allow for heating and cooling related energy savings
  • Structurally composed of: timber frames, being stone or concrete framed
  • Low primary energy use in kWh/m2 per year
  • Saving on water consumption
  • Having a ventilation system consistently supplies fresh air
  • Appropriate windows with good insulation

How can you get involved?

So with this legislation on the horizon for 2020, what has Tenders Direct shared for supplier opportunities?

South Dublin County Council are tendering for the Design and delivery of a sustainable integrated mixed tenure housing development in Kilcarbery, Dublin in line with the Kilcarbery Grange Preliminary Masterplan. This development has a capacity for 892 passive housing units.

This Prior Information Notice (PIN) for Housing Management Services lets us know The London Borough of Lambeth is preparing a tender for a scheme of 70 affordable homes. The contract notice will be advertised in the coming months for housing which will abide by the passive house legislation.

In Cardiff, the construction of four adaptive houses and seven bungalows is being tendered for. The properties, under the name of the ‘Holm View New Build’ scheme, will be built in line with the passive housing regulation.

Where are the opportunities?

If you are a construction supplier looking for new business, the ‘Passive House’ is the fastest growing energy performance standard in the world. With 30,000 buildings with this sanction to date, Tenders Direct will be sharing further tender notices as passive housing continues to grow.

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E-communication: what does it mean for buyers?

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UPDATE: As of 18th October 2018 all public procurement exercises require e-communication between buyers and suppliers unless there are specific circumstances that make it impractical. In this blog we outline the requirements that buyers are now subject to.

What constitutes electronic submission?

E-communication became mandatory for Central Purchasing Bodies (CPB) in April 2018 and has now been rolled out to all purchasing authorities in the public sector.

This has brought an end to hard copy communications by requiring all interactions between buyers and suppliers relating to a procurement exercise to be conducted through a secure and auditable online system.

Regulation 22 of the Public Contracts Regulations 2015 states that electronic submissions from suppliers must use a tool where the exact time and date of submission is provided and that access rights are limited to authorised persons only.

Why has this change been implemented?

The overall rationale for the change is that e-communication is commonly agreed to help streamline and strengthen the procurement process for both buyers and suppliers.

The new rules are intended to improve transparency and auditability, make public contracts more accessible to suppliers, promote cross-border tendering, and reduce administrative costs.

What does this mean for buyers?

In order to comply with the regulations buyers must ensure that communication with suppliers is secure and that there is a comprehensive audit trail of all interactions.

This must be a dedicated tool with inbuilt safeguards – a secure electronic postbox – rather than a generic email system. Purchasing authorities need to have access to a platform that supports this.

Want to find out more?

myTenders Pro provides all the required functionality to allow buyers to publish tender notices, conduct competitions, manage contracts, and guarantee compliance with all applicable regulations including those relating to e-communication. Call us on 0800 222 9009 for more information.

 

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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