Watching the weather change

As we all realise to our horror that developing a beach body in time for summer is now completely out of the question, we can at least take comfort in the knowledge that cold weather is now firmly behind us. With the exception of those of the ski holiday inclination, our experience of life is undeniably lessened by the harsh winter months. Perhaps the miserable success rate of the solemn resolutions we make to ourselves at the turn of each year has more to do with January being an inopportune time to enact behavioural change, rather than a personal lack of willpower: cravings for unhealthy snacks are more difficult to combat while enduring sub-zero temperatures, a glass of wine never so tempting than when stuck indoors on a wintry evening. But as we wake to sunshine and birdsong instead of darkness and rain, personal renewal feels more like an urge than an effort. Imagine you had felt as energised as you do on a day of blazing sunshine and outdoor activities when you were lazing on the couch gorging on chocolate in the first months of the new year… you could have had a beach body by now.

One of the pleasures of this time of year is the spectacle of the previously barren natural world flourishing with life and colour once more. In the countryside, fledgling crops of all kinds grow in the fields as farmers hope for a bountiful harvest in the autumn. While some of us may be inspired by springtime in our own efforts to grow, farmers are beholden to the seasons in a material sense. While the ancient endeavour of agriculture was initially driven by subsistence, in modern times it is an industry like any other. While most of us do not make a living from the soil, the acquired wisdom of a veteran farmer can be of use to a company in any sector: sow only the finest seeds, plant varied crops in different fields, use ever more efficient and productive techniques. Above all, avoid over-reliance on the same field lest the nutrients be drained from the soil. Like farmers, we would do well in our personal and professional lives to learn the lessons of past harvests and change our methods accordingly.

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Regulation Day

At the beginning of this week we saw a number of regulations being transposed in the UK. These are as follows:

Public Contracts (Scotland) Regulations 2015

New regulations transposing the 2014 EU Public Procurement Directive were laid in the Scottish Parliament on 18th December 2015 and came in to force earlier this week, 18th April 2016.

A brief summary of the changes that will affect Contracting Authorities are as follows: Continue reading “Regulation Day”

An Update on Framework Agreements

What is a Framework Agreement?

The Public Contracts Regulations 2015 came into force in February 2015 and defined a Framework Agreement under Regulation 33 as:

“an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate the quantity envisaged”.

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Life-cycle Costing

Life-cycle costing is a concept that has come to prominence in public procurement over the past few years but there seems to be a lack of understanding over exactly what it means and what areas it covers.

Regulation 68 of The Public Contracts Regulations 2015 specifically outlines that life cycle costing can now be used by buyers when cost is the award criterion.

Life-cycle costing is similar to MEAT (Most economically advantageous tender) in that it takes into account a combination of price and quality. The difference is that all aspects of the production process can be considered in the evaluation of the bid.

Research and development, production costs, maintenance costs and end of life disposal costs are all considered to be part of life-cycle cost. Environmental factors like costs of greenhouse gas emissions and climate change mitigation can also be included in the assessment if a monetary value can be assigned to them.

To break this down further, buyers may want to consider the following elements in greater detail before making the decision to purchase:

  • Various transaction costs, such as taxes, foreign exchange and contracting costs.
  • Finance costs (if capital has to be borrowed to pay for the purchase).
  • Acquisition costs: costs of delivery, installation and commissioning.
  • Operating costs, such as energy, spares, consumables, maintenance and repair over the useful life of the purchase (e.g. for equipment and machinery), operating training, supplier support.
  • Costs of storage and other handling, assembly or finishing required.
  • Costs of quality (inspection, re-work or rejection, lost sales, compensation of customers etc).
  • End of life costs, such as decommissioning, removal and disposal (minus some negative cost if the asset has sufficient residual value for re-sale).

Some or all of these costs may be included in the price quoted by a supplier but they may not be. Buyers should assess this fully – does a lower price reflect competitive pricing or a lesser total package of benefits?

When procuring in the construction industry for example, it is recommended by The Office of Government Commerce that higher costs at the design and construction stages should be considered in the interests of achieving significant savings over a building’s lifetime. For construction projects in particular, life-cycle costs are those associated directly with the building; costs such as land, income from the building and support costs associated with the activity in the building.

Of course, suppliers will need to consider the lifecycle cost factor as a priority too. This is to ensure that best value can be gained from cost of production whilst staying competitive in the marketplace.

Regulation 68 also sets the parameters to ensure that it is fair and to make sure that it doesn’t disadvantage certain suppliers. If an authority is to use life cycle costing, the criteria that they are using must be included in the procurement documents and they must also outline what data they are expecting the supplier to provide. It also states that if a common method for calculation has been made mandatory by EU legislation that it should be used for the assessment. (The only example so far is the Clean and Efficient Vehicles Directive (2009/33/EU).

It may be common once the procurement process is in progress for lifecycle costing to slip down the list of priorities. Calculations therefore need to be incorporated at the start of the process, and not be seen as a last minute fix.

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Millstream is the provider of business opportunities for public sector buyers and suppliers. We simplify the tendering process by sharing our knowledge & expertise. Millstream also offers a wide range of training and consultancy to enable buyers and suppliers to tender more successfully.  More information about public and in-house training courses and consultancy options can be found at: www.millstreamlearning.eu/

Who am I? Central or Sub-Central Organisation? And why does it matter?

Contracting Authorities are divided into two types of organisations under both the 2014 EU Directive and 2015 UK Regulations. These are:

Central Government Authorities
Sub-Central Contracting Authorities

SO WHICH ARE YOU? AND WHY IS IT IMPORTANT TO KNOW?
Continue reading “Who am I? Central or Sub-Central Organisation? And why does it matter?”

Where is the love?

This weekend, millions will take part in the annual celebration of love and commitment that is Valentine’s Day. Vows and promises will be made; hopes and dreams will be shared. There will be fine dining, expensive presents and special moments. Meanwhile, some of us will cower alone in our bedsits, recoiling from the grotesque displays of happiness on our news feeds. Displays of love, however, are not the sole preserve of romantically involved couples. It is often said that love is based on respect; showing respect can be something as simple as making time for a friend, complimenting a colleague on a job well done, or being kind to a stranger. Maintaining high standards of behaviour in our professional and social lives – showing a little love, if you will – is the cornerstone of a civilised society.

This is not merely an issue of social cohesion: there is a solid business case for companies to actively promote a culture of respect in their internal and external relationships. In recent years, the concept of corporate social responsibility has become increasingly prominent in many organisations, with substantial emphasis placed on health and safety, security, sustainability and equality in the formulation and implementation of procedures and processes. Awards and accreditations in these fields – along with the provision of various employee-focused schemes – have become the norm in the business world. Accordingly, developing your organisation in these areas is not merely about prestige: it is about maintaining a competitive edge. Public sector organisations have led the way in this respect; at Tenders Direct we see frequent procurements for services such as quality assurance and accreditation, employee assistance and counsellingemployee engagement and corporate values, benefit schemes and teambuilding events. More than ever, public and private sector organisations are recognising the material and cultural advantages of an enlightened approach to organisational management and development.

Continue reading “Where is the love?”

Below Threshold procurement advertising

The Public Contracts Regulation 2015 was enforced on the 26th February 2015. With the introduction of the new regulations, there have been a few changes that have affected the publication of Low Value/Sub-OJEU notices.

Below is a summary of the changes that have been made which affect Low Value/Sub-OJEU notices:

Contracts Finder

Contracts with a value over £25,000 (£10,000 for Central Government) must be advertised on the Crown Commercial Service site aka Contracts Finder. This includes contracts between £25,000 and the European threshold £172,514 and to notices published in the Official Journal. Further details on Contracts Finder can be read on a previously published blog.

Part B Services v Light Touch Regime:

Under the previous regulations, services were split into Part A and Part B. All services fell into one of 27 service categories, where  1-16 were Part A and subject to the full procurement regulations whereas Part B were service categories 17-27 and were essentially exempt from the rules (although an award notice was required).

Section 7 of The Public Contracts Regulations 2015 details the rules surrounding the procurement of services that are considered “social and other specific services” and above the set threshold of EUR 750 000. As explained in the EU fact sheet on a new simplified regime for service contracts the “contracting authorities have to publicise in advance their intention to award contracts of this value and announce the contract award decision after the procedure”. This is known as the ‘Light Touch Regime’. Further details on Light Touch can be read here.

PINs in Restricted Procedures:

PIN can now be used, by sub-central contracting authorities, as a means of calling for competition in place of a contract notice (Regulation 28) and can also be used in place of a PQQ stage with selected suppliers being taken straight to the tendering stage. This is in addition to the traditional use of a PIN which is to notify the market of a possible opportunity so, under the new regulations; the PIN has a dual function. If the PIN is being used as a call to competition it must contain the information in Annex V Part B I and II in the 2014 Procurement Directive. For further information on this please see the previous blog published on this.

Ban on PQQs:

As part of 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 as per Lord Young’s report. Arguably, in doing so this can benefit Suppliers as they will be asked relevant and proportionate questions, which could make it easier for SMEs and VCOs to participate. More details can be found by reading the article Ban on PQQs.

Electronic Documents

Regulation 53 of the Public Contracts Regulations states that “contracting authorities shall, by means of the internet, offer unrestricted and full direct access free of charge to the procurement documents”. In essence, all documents must be electronically available via URL or on the notice itself (This can be done with Millstream’s myTenders Pro) from the start of the procedure. Sending out documents by e-mail does not fall under full direct access as per Regulation 53(2) as “readily available” access has to be made available at any time and therefore emailing of documents does not satisfy this requirement as it relies on the actions of the contracting authority (they are not readily available at any time). To read a more detailed information on this, please see follow the following link to a previous blog Electronic Documents.

If you would like Millstream to publish a blog on a certain topic, whether it be relating to the 2015 Regulation or not, please do not hesitate to comment.

Millstream also offers a wide range of training and consultancy to enable buyers and suppliers to tender more successfully.  More information about public and in-house training courses and consultancy options can be found at: www.millstreamlearning.eu/

New standard forms for OJEU notices. Simplification or burden?

The EU published the new standard forms for OJEU notices on 12th November 2015. In England and Wales, where The Public Contracts Regulations 2015 came into force in February 2015, the new standard forms for public sector came into force on 3rd of December 2015. It will be some time before all contracting authorities are using the new forms but a few are trickling in and you might have seen some of these on Tenders Direct already.

The new forms reflect the simplified rules and procedures of the new EU Directives. In this blog I will highlight some of the biggest changes we will see with the new forms and flag up some of the pros and cons they present to both buyers and suppliers.

Continue reading “New standard forms for OJEU notices. Simplification or burden?”

New Public Procurement thresholds 2016/2017

** 2018/19 Public Procurement Thresholds Update Available HERE **

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.

The commercialisation of space

In case you hadn’t heard – “Star Wars: The Force Awakens” is released in the UK today. We decided it was too good an opportunity to pass up without a related blog entry. NO SPOILERS are included below…

Recently I was intrigued to discover a contract notice entitled “Space Mission” published in the global hub of space exploration that is Swindon. Alas, it was not a design and build contract for the Death Star. Instead, UK Shared Business Services were seeking a contractor to assist in opening up the US space sector to UK entrepreneurs. While the private sector has always provided the logistical backbone of space flight – hugely successful conglomerates such as Raytheon, Lockheed Martin and Boeing flourished as suppliers to NASA during the Space Race – humanity’s reach for the stars is increasingly facilitated by private contractors. Indeed, there are growing indications that commercial interests may ultimately replace the quest for scientific knowledge as the primary driver of innovation in the space sector.

NASA now outsources its unmanned supply missions to the International Space Station to California based contractor SpaceX. Retirement of the Space Shuttle in 2011 left a capability gap for manned flight; with a replacement platform still some way from fruition, NASA now depends on Russia’s Federal Space Agency to transport its astronauts to the ISS. Reliance on a foreign rival is seen by some in the US as damaging to national prestige and has undoubtedly catalysed the development of private sector expertise in space flight technology. NASA’s decision to award contracts for manned crew rotations to the ISS earlier this year to both SpaceX and Boeing – provisionally scheduled for 2017 – can be seen not only as an attempt to reinstate domestic capability, but also a pragmatic reaction to budgetary pressures. NASA – like so many public sector bodies – has recognised the monetary benefits of outsourcing and the potential of private investment to drive innovation. Richard Branson’s Virgin Galactic – a bold attempt to apply the business model of commercial airlines to orbital flight – epitomises the drive to transform space travel into a profit making enterprise.

Continue reading “The commercialisation of space”

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