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

Posted by Duncan Dallas on March 31, 2017

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

Posted in General Procurement, Politics of Procurement, Procurement Law, suppliers, Uncategorized | 2 Comments »

Public Procurement Thresholds 2017 – update

Posted by emilypirie on February 6, 2017

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Just before the beginning of last year I wrote this blog introducing the new financial thresholds for mandatory publication of opportunities in the Official Journal of the European Union (OJEU). Since then we’ve received quite a number of queries on the subject. Although the current thresholds haven’t changed I thought I’d write an updated blog to include these discussion points.

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  in Scotland.

The current thresholds are as follows:

PUBLIC CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Central Government £106,047

€135,000

£4,104,394

€5,225,000

£589,148             €750,000
Other contracting authorities £164,176

€209,000

£4,104,394

€5,225,000

£589,148            €750,000
Small lots £62,842

€84,000

£785,530

€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

€418,000

£4,104,394

€5,225,000

£785,530              €1,000,000

 

DEFENCE AND SECURITY CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Defence and Security authorities £328,352

€418,000

£4,104,394

€5,225,000

 n/a

 

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 gives instruction on 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 5 186 000.

The Sterling equivalent is £4,104,394.

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?

My colleague Line recently wrote a blog to clarify this question: https://blog.tendersdirect.co.uk/2017/01/06/procurement-terminology-what-are-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.

I hope you find this blog useful. If you want more help with understanding thresholds and other public sector tendering procedures, Millstream’s Training and Consultancy team are available to answer any of your questions. Or, leave us a comment below.

 

millstream

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The end of onerous practices in UK Procurement?

Posted by Gemma Waring on December 9, 2016

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On Monday of this week the Crown Commercial Service (CCS) released a Public Policy Note (PPN) on ‘Onerous Practices in Procurement and Contracting’. Put simply they are referring to procurement practices which place far too much risk on the supplier. This in

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Confronting collusion in public procurement

Posted by John Cutt on September 13, 2016

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Back in June, the Competition & Markets Authority (CMA) published an open letter to procurement professionals announcing new guidance and learning resources designed to help combat collusion between suppliers bidding for public contracts. Along with a text summary, the new resources include an e-learning module and some admirably accessible and informative animated videos. Unsurprisingly, this development in the battle against illegal anti-competitive practices received a warm reception in procurement circles, with the Chartered Institute of Procurement and Supply and the Local Government Association making the resources available to their members. This move can be seen as a small but positive step forward in efforts to protect the public sector’s reputation as a fair and transparent place to do business and should be applauded.

 

We last touched on this subject in 2009 following a round of fines imposed by the Office of Fair Trading (superseded in 2014 by the CMA) on over one hundred construction firms found to be guilty of bid rigging. The size and stature of many of the companies involved was surprising: not so much dodgy purveyors of rickety garage conversions, more a who’s who of premier league construction companies. Some in the industry expressed concern over potential job losses resulting from the fines, but we felt that these sanctions were not overly punitive when framed as a percentage of turnover. Indeed, some of the firms had their fines reduced substantially under the CMA’s leniency policy in return for confessing when first confronted.  Read the rest of this entry »

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The Living Wage – The New Public Procurement Guidance

Posted by Cindy Cheng on September 9, 2016

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The Scottish Government launched its new public procurement guidance to promote fair work practices last October. Now that we are almost three quarters of the way through 2016, are you familiar with the new guidance yet? Read the rest of this entry »

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Continued Growth in Public Sector Healthcare Spend

Posted by Duncan Dallas on August 17, 2016

 

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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

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Will we see an increase in SMEs winning contracts in Ireland?

Posted by Line Olsen on July 29, 2016

The Irish Public Sector spends €8.5 billion on goods and services annually.  Is your company getting a slice of this cake? Have you considered how to get into this market?

Did you know that if you are among the 99.7% of active enterprises in Ireland defined as an SME, statistically speaking, you have a higher chance of winning a contract than SMEs in the rest of EU? Where the European Commission reports that SMEs win 45% of the aggregated value of contracts, the Office of Government Procurement has previously reported that SMEs win an estimated 66% of contracts in Ireland.

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Wales: a clarification

Posted by John Cutt on July 6, 2016

Wales football

After drawing Wales in the Euro 2016 office sweepstake a few weeks ago, I may have inadvertently given the impression to my colleagues that I was in some way not utterly ecstatic at the outcome. I now accept that my use of various profanities and the term “unmitigated disaster” may have misconstrued my true feelings on the subject. I am happy to clarify that I have always had the utmost confidence in the Welsh national team, fully expected them to make it to the semi-finals as a minimum and consider it a privilege to have invested £2.00 in their endeavour to stay in Europe (albeit for football and binge drinking only).

Although Millstream specialises in public procurement rather than football punditry, we have been impressed by the interest shown by some attendees of the tournament in our area of expertise: it was particularly gratifying to see a fringe element of Remain supporting England fans attempting to stimulate French public sector expenditure by facilitating massive overtime payments to the Gendarmes and street sweepers of Marseilles and Lille. Faced with a wave of criticism after the abject humiliation of his team of spoilt divas being defeated by plucky Icelandic amateurs, England manager Roy Hodgson reluctantly agreed to face the media despite being privately encouraged by Boris Johnson to follow his lead by abdicating all responsibility for the outcome.

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Millstream’s Tenders Direct & Brexit

Posted by Tim Williams on June 29, 2016

BrexitClearly Brexit is a very hot topic at the moment and most people are probably wondering what it will mean for their lives both personally and professionally. Although public procurement is governed by UK regulations, these originated in EU Directives so we thought it might be helpful to set out our views on how Brexit might affect the service we provide to you through Tenders Direct.

  1. What happens now?

Well at the moment, nothing changes; this includes the financial thresholds that govern whether a contract must be published at a European level in the Official Journal of the European Union (OJEU). Although the value of the pound has dropped against the Euro following the vote to leave, the exchange rate for procurement purposes is fixed at 2 yearly intervals and so it is not due to be revised until 1st January 2018.

The two year period of negotiations leading to the UK’s exit from the EU will not begin until Article 50 of the Lisbon Treaty is invoked by the UK giving formal notice. In the meantime, the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 the Concession Contracts Regulations and the Scottish equivalents of these regulations (“the Public Procurement Regulations“) still apply and are in full force. This means that contracting authorities need to continue to comply with the rules and bidders can continue to enforce their rights if they believe there has been a breach.

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Millstream reaction to Brexit vote

Posted by David Law on June 24, 2016

After months of campaigning, debates and opinion polls the people have spoken and decided that Britain should leave the European Union. Once the dust has settled on the result the long and arduous task of the Government negotiating an exit will begin.

One of the key questions coming out of this result is: will the UK retain access to the Single Market, through membership of the European Free Trade Association (EFTA)? This is what Norway, Iceland, Liechtenstein and Switzerland have done but it remains to be seen whether the UK will decide to pursue this option as it will require us to contribute to the EU budget, accept the free movement of EU citizens and to implement European legislation relating to the Single Market. The obligations are very similar to those required of full EU members, but without representation on any of the decision making bodies. It is also doubtful whether the EU will agree to UK membership of EFTA.

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