In our blog about election manifestos one thing that was clear is that all the main parties feel that involvement of SMEs in procurement is the key to economic growth. The current Government set a target of 25% of all Central Governments spend to be with SMEs when it came to power in 2010 and it met this target in the 2013-2014 financial year. Framework agreements represent around 45% of procurements in the UK and compared to other EU nations the UK uses this type the most. The purpose of this blog is to explain how important framework agreements can be for SMEs.
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):
- Will raise the target for SME’s involvement in procurement raising their share of central government procurement from 25% to 33%.
Under the new regulations ‘Part B services’ have been abolished and replaced with the new ‘light touch regime’. Below we cover what the new rules are, what has changed and whether this is a change for the better.
Part B Services: What were the rules?
Under the previous regulations all services were split into two – Part A and Part B. All services fell into one of 27 service categories – service categories 1-16 were Part A and subject to the full procurement regulations whereas service categories 17-27 were Part B and were essentially exempt from the rules (although an award notice was required). The service category that the service fell under was determined by the CPV codes. The purpose of this was to exempt services which were considered to not have cross border interest from the strict EU publication rules. Services are considered to not have cross border interest when it is unlikely that a service provider in one country can (or will be willing to) provide their service in a different country – for example, hotel services or legal service.
However, part B was occasionally taken advantage of and notices that did have cross border interest were incorrectly excluded from the rules. This was often due to the use of service category 27 which was “Other services” and covered any service that did not fall into the CPV codes listed under any of the other, more specific, service categories 1-26.
Light Touch Regime: What now?
When reviewing the legislation it was deemed that services with no cross border interest do still need to be treated differently however, much discussion took place to determine WHICH services were to be considered to not have cross border interest and WHAT the rules would be. Continue reading “‘Part B Services’ verses ‘Light Touch Regime’”
As part of our series of blogs on the 2015 Procurement Regulations, we are going to look at the main changes to the two common stages in procurement – the PQQ stage in this blog and in a couple of days we will look at the ITT stage. It is important to know what changes you can expect and how you need to prepare for them if you are a supplier to the public sector.
The most important changes to the PQQ stage in the new regulations are:
A turnover cap has been introduced to facilitate SME participation. Contracting authorities will not be able to set company turnover requirements at more than two times the contract value, except where there is a specific justification. This will be of benefit to a lot of suppliers but given the point made in our previous blog about contracting authorities not being mandated to break contracts down into lots this means you must have a turn over circa £223K (unless the contract is being broken down into lots) which will still inhibit a lot of smaller or newly established companies from competing. In any case, from today make sure all contracts you are applying for follow this rule to open up as many doors as possible. If the turn over requirement is more than two times the contract value then ask why – there may be justification but it might just be an error that the procurement team can rectify, giving you the opportunity to compete for the business. Continue reading “2015 Procurement Regulations – Changes to the PQQ Stage – What Suppliers need to know.”
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.
Public sector tendering opportunities are a valuable way to secure new business, with hundreds of local contracts published every week in every sector, from healthcare and IT to construction and transport.
Many local authorities, NHS trusts and government departments now handle procurement electronically to save money and time as well as ensuring compliance with the latest regulations.
It is therefore vital for businesses to ensure they do not miss out on any potential opportunities in their own local area, throughout the UK or mainland Europe, according to Tim Williams, managing director of electronic tendering specialist Millstream, which runs the Tenders Direct and myTenders websites.
“The days of the printed version of the Official Journal of European Union are long gone and there is no effective way to keep track of all the opportunities without using an online system, particularly in today’s fast-paced world of business,” said Tim, whose company recently won a contract to run the national procurement portal for the Welsh Government.
“Procurement processes will all be conducted entirely online in the near future and the Government’s target is for procurement to be completely electronic by 2016, so it’s vital that companies make sure they don’t miss anything.
“We aim to make it as easy as possible for purchasers in the public sector to advertise their tenders and to help small and medium sized companies to identify new business opportunities and crucially, to give them the best chance of winning that work.”
Tenders Direct was established by Tim in 1992, to make it easy for subscribers to find information on public contracts.
Sitting in a university library in the early 1990s, trawling through a copy of the Official Journal of the European Union (OJEU) in search of potential business, Tim Williams realised the information on tender opportunities was valuable not only to his own company, but to thousands of others.
Having turned his back on his plans to become a natural history filmmaker in favour of a global career as a diver and then project manager in the 80s oil boom, Tim set up Millstream, now a leading electronic tendering specialist which runs myTenders and Tenders Direct.
A colleague of mine recently sent me an article about authorities who have been permitted to proceed with contracts after being challenged by a supplier. Now, if you remember one of my more recent posts, A Slap on The Wrist for Authorities I discussed (in short) how more authorities are being pulled up for their actions when awarding contracts unfairly and what you could do as a supplier, I believe my exact words were, “just by making a formal complaint you can put a hiatus on the contract award”. Imagine my surprise when I read the article about three cases where the court lifted the suspension and allowed the contract to continue. Apparently the new Remedies Directive has a tiny little loophole, the same law that allows suppliers to put the brakes on a contract award allows authorities to continue the contract until something more concrete is settled in court. Now this won’t be the case for every authority, they must have to merit the circumstances, but it might put some suppliers off the idea of challenging authorities in court. The courts have suggested awarding damages may be the best way to solve the issue when dealing with brazen suppliers willing to challenge the system. The first case was for cleaning services in a college, the college fought that they needed the cleaning services to continue classes, therefore the college was permitted to carry on with the chosen supplier until an agreement was reached in court (i.e. damages). The second case was for an NHS trust which obviously needed to continue business as usual as they are dealing with people’s health, so again the NHS trust were permitted to use the chosen supplier. The third case was regarding landmine clearance in Cambodia…… need I say more?
So what does this mean for suppliers? Will any challenged authority be quoting these cases in court? If the courts feel that damages will be the best path to take when these cases arise, is this really good value for public money? I feel this loophole goes against the power the authorities were kindly given. It goes back to the same old idealism, be transparent and do it right in the first place. If any of our readers are running into trouble with Authorities, let us hear your story!
I agree with standardised PQQ’s about as much as I agree with world peace; great in principal, but is it a reality? Okay, so maybe it is a touch dramatic to compare PQQ’s to world peace, but standardising PQQ’s will be a colossal mission- can it be done? I asked the question on Twitter a few weeks back, “What annoys you most about PQQ’s” and we got the same answer – Repetition. So can it be done? Here a look at some of the (my) pros and cons.
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Are Procurement Standards Slipping or Are the Powers That be getting Stricter?
I feel that every tweet, RSS and blog is talking about another authority getting pulled up and challenged on one of their “sweep-it-under-the-rug” tenders.
The European Commission has requested Greece to ensure full compliance with EU rules on public procurement – the purchase of goods and services by public authorities – as regards school bus services and the supply of underground electricity cables….. Read the rest of the post