Food Procurement – buy local or buy cheap?

Nick Herbert MP

MP’s have been urging local authorities and other public sector bodies to support local farmers and source their food within the UK. I can only assume this is for contracts under the EU procurement thresholds, otherwise how can public sector bodies award £2 billion worth of food contracts just within the UK? When I initially started this article I agreed, why shouldn’t we get to eat nutritious, carbon friendly, local food? Why shouldn’t the UK get to support their local farmers? It is public money, right? It is not quite that simple, local food may not always be the cheaper or most environmentally friendly option. DEFRA has told us a million times, it is more sustainable to grow and import a tomato from Spain than it is to grow one here in the UK.
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European eGovernment Awards 2009

Angela Smith MP
Angela Smith MP

Minister of State for the Cabinet Office, Angela Smith

We are just making the final preparations for our participation in the European eGovernment Awards 2009, which are being held to coincide with the 5th Ministerial eGovernment Conference in Malmö, Sweden on 19th/20th November.
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Does Size Matter? SMEs in Public Sector Procurement

The public sector is a potentially lucrative source of business, as the UK spends about £222 billion a year on procurement.  There are also certain advantages to working with public sector organisations; they are required by EU law to be transparent and fair in the way they choose suppliers, they are very stable and reputable, and usually make prompt payments.

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Which OJEU contracts should I bid for?

Let’s start with this essential piece of advice:

Do not make the mistake of going after every tender!

It can be appealing to start off on this footing when you see a flood of tender notices coming through, all of which apparently match your business area. But are you remembering how high bidding costs can be and have you really thought about your chances of winning? Companies who bid for everything are not normally the most successful. Bidding on the wrong contract can be a waste of resources if you have no chance of winning so you need to think about things a bit more strategically and start targeting specific opportunities to make the most of your time and resources. Don’t just enter to make up the numbers.

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Official Journal of the European Union (OJEU)

Philippe Lebaube

The Official Journal of the European Union(OJEU) is the gazette of record for the European Union. It has been published in 22 official languages (23 when Irish is required) of the member states, every working day since the Treaty of Nice entered into force on 1 February 2003.  The OJEU superseded the earlier Official Journal of the European Community (OJEC) with the establishment of the European Union.

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Swedish Court Cancels Armoured Vehicle Contract

The European defence market is changing. Where once each nation maintained its own defence industry, this is no longer a viable model as Europe faces enormous pressure from the US, which has the worlds largest defence market. In August this year, a new European Directive (2009/81/EC) on defence and security procurement came into force. The new Directive brings defence procurement more into line with mainstream public procurement. Previously member states were able to avoid openly tendering for even quite mundane items of equipment by invoking Article 296 of the European Treaty and stating that they were for their ‘essential security interests.’

Earlier today the Stockholm County Administrative Court ruled that a €240 million armoured personnel carrier deal with the Finnish arms manufacturer, Patria, had breached Swedish public procurement law. The Swedish Defense Materiel Administration (FMV) has been ordered to repeat the tender process despite awarding the contract to Patria in June.
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Public sector tendering – lost in translation..?

Have you ever come across a tender that looks interesting but you just don’t have a clue what it’s talking about?

Buyers, often with the best intentions, sometimes include terminology that is quite frankly harder to understand than ‘The Theory of Everything’ by Stephen Hawkings. If you’re new to public sector tendering, here’s a simple jargon buster of some of the most commonly used terms that may just save your PC from being thrown out the window…!

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If at first you don’t succeed…

With its wildly different culture, risk adversity, rigid processes and sometimes outright incompetence, is it any wonder that so many suppliers are put off working with the public sector?  Probably not.

So, you should just forget it right? Getting into the public sector market will involve hard work and perseverance.  You will have to spend a bit of time understanding the public sector procurement processes and pick up some new skills.  You will more than likely face frustrations along the way, you might even have to change some of your preconceptions about this elusive market.  Sometimes it’ll seem like it’s just not worth the hassle so you don’t bother pursuing it.

But could it be worth a second look? Is it worth getting your company geared up to do business with the public sector? If you supply a product or service that the public sector demands then here are a few things to inform your decision:

– The UK public procurement market is worth over £175 billion a year;
– Public sector organisations are not going to go out of business any time soon, this means a level of security and certainty that you won’t get with a lot of private sector organisations;
– Public sector clients tend to make prompt payments;
– There’s a high chance of repeat contracts;
– Processes are (largely) open, transparent and fair.

Now, if you’ve had a negative experience with a public sector buying organisation, you might well disagree with this last point.  However, the first thing you need to remember is that no two public sector purchasers are the same.  This can be a difficult thing to get a handle on to start with. On opposite sides of the spectrum you could have one organisation keen on innovation, communication and strategic partnerships and another still firmly operating in the master and servant mindset.  It is up to you to do some digging, find out what’s what, then decide which organisations you want to work with.  Tricky, but worth it perhaps?

You snooze, you lose!

If you have ever attempted to read the public procurement directives then you will know there are a number of regulations governing the advertising and award of public sector contracts. 

Contracts that fall below the EC procurement thresholds are not subject to these directives.  Below threshold contracts are subject to the rules and principles of the EC Treaty (including non-discrimination, equal treatment, transparency etc), and European Court of Justice case-law has indicated these contracts should be ‘sufficiently’ advertised.  However, aside from these rather ambiguous guidelines, there are no real rules regulating these contracts. 

OJEU tenders are required to follow specific regulations on timescales to allow suppliers adequate time to respond to tenders, not usually less than 22 days.  Below threshold tenders, however, often have much tighter deadlines.  To make this situation worse, below threshold contracts are found in literally hundreds of places, including websites, local and national newspapers, and trade journals, meaning that they cannot always be identified as soon as they are advertised.

It is therefore particularly important to respond to these contracts as soon as possible.  In fact, regardless of whether it is a below threshold or OJEU tender, it is advisable to make initial contact with the awarding authority as early as possible.  This can only increase the time you have to prepare your bid or Pre-Qualification Questionnaire.  It also means that the authority should keep you informed of any changes or further information relating to the tender.  Responding to the tender notice does not bind you to bidding for the contract, but if you miss the deadline, then you have missed your opportunity.  As the old saying goes “you snooze, you lose!”

European Commission investigates Glasgow Housing Association’s failure to openly tender

Glasgow Housing Association (GHA) is a private not-for-profit company created by the Scottish Government for the purpose of owning and managing Glasgow’s social housing stock. The housing stock, of approximately 81,000 houses and flats, was previously owned by the Glasgow City Council.

Following a poll of the Council’s tenants, the vast majority of their social housing was transferred to the ownership of the Glasgow Housing Association. The transfer was mired in controversy at the time, there was a strong No campaign backed by the Scottish Trades Union Congress (STUC) and many commentators doubted that there was a genuine desire on the part of the tenants to transfer to another landlord. However, a condition of having Glasgow’s housing debt written off was a transfer whole stock. This was initially going to be to one landlord, however, the Scottish Government intervened and introduced the concept of Second Stage Transfer (SST) to smaller Housing Associations over time.

Taroub Zahran, the Chief Executive of Glasgow Housing Association, resigned from her position at the end of Taroub Zahran Former Chief Executive - Glasgow Housing AssociationSeptember after what was believed to have been disagreements with the Scottish Government and Glasgow City Council over the slow speed of stock transfer.

A total of 322 tenants in Glasgow transferred to a new landlord at the end of July following the transfer of homes from Glasgow Housing Association (GHA) to two community-based housing associations under the Second Stage Transfer process.

Provanhall Housing Association took control of 195 homes, and another 127 houses in Hyndland were transferred to Glasgow West Housing Association.

Provanhall and Glasgow West join Shettleston, Ardenglen, Cassiltoun and Parkhead housing associations which took ownership of GHA homes in March this year.

A further 21 Local Housing Organisations who currently manage approximately 19,000 houses on behalf of GHA are still progressing through the various stages of the SST process. Ballots for a further four potential transfers are planned for this calendar year, with transfer potentially by the end of the financial year.

The European Commission, who will have begun their investigation following a complaint, has asked the UK Government to provide further information on how these contracts were awarded as it believes that they were public service contracts and as such should have been awarded on the basis of an open and transparent tendering process. If the European Commission is correct that no open tendering process was conducted, the UK will have failed to fulfill its obligations under the Public Procurement Directive 2004/18/EC.

The penalty for failing to fulfill such obligations is often simply that the relevant member state has to demonstrate that it has taken measures to rectify the situation and to prevent a future re-occurrence. Although sometimes, if it is not satisfied with the action that has been taken, the Commission will ask the European Court of Justice to impose a financial penalty.

In 2004 the Commission sought to impose daily fines against Germany for two long term (30 years) waste contracts that had not been correctly tendered.The fines sought were €31,680 per day for the City of Bockhorn contract and €126,720 per day for the City of Brunswick contract, which would be payable until the illegal contracts had been cancelled. That’s €58 million per year for 30 years!

The German government were in a bit of a sticky situation here, as it was the City authorities that had entered into the contracts and so the Government had no direct authority. Fortunately they managed to negotiate an agreement annulling the contracts.

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