Public Contract Regulates One year On Speaker... · Public Contract Regulates – One year On ... - Recent Case Law ... Steve Kay EU Procurement Advisor and Trainer

© 2016 Achilles Information Limited | Confidential

Public Contract Regulates – One year On

Debbie Metcalfe LLM MSc MCIPS

10th May, 2016


Who is Achilles?

• Global leader in procurement and supply chain risk management

• We identify, qualify, evaluate and monitor suppliers on behalf of some

of the world’s largest corporations and carry out thorough verification

of data through assessments and audits across multiple market

sectors

• More than 80,000 pre-qualification questionnaire validations and over

10,000 on-site audits every year

• Core services related to utilities governed by EU procurement

legislation

• Over 25 years provision of training and consultancy services to utility

and public sector clients


Achilles Consultancy and Training

• Provide EU Services

• Open/In-house courses

• Achilles EU Academy

• Email and telephone support via THEMiS

• EU Consultancy

• E-learning

• Development of bespoke procurement training


Today’s agenda

• Regulatory Framework of Rules

• What has been the impact of the Public Contract Regulations

2015

- Innovation Partnerships Procedures

- Discretionary exclusion for poor past performance

- Dynamic Purchasing Systems (DPS)

- Availability of ‘Procurement Documents’

- European Single Procurement Document (ESPD)

- Break

- Recent Case Law

• Reflect some of the main changes under the Utility Contract

Regulations and the Concession Contract Regulations 2016

New 2015 Procurement Contract Regulations

4


What are the EU Rules

5


'EU' Rules

Principles and detailed procedures to be applied by ‘contracting authorities’ (e.g. local government)

Reflecting the risk that such bodies might favor national or local suppliers in their procurement

Such preference breaches the EU Treaty obligations of free movement of goods, services, people and capital (‘the four freedoms’)

EU Directives set out the procedures, secondary legislation (the UK Regulations) implement them in the UK


Treaty Principles

• 5 Treaty Principle

• Equal treatment

• Non-discrimination

• Mutual recognition

• Proportionality

• Transparency


Hierarchy

Treaty principles

EU Directives

UK Legislation • Courts will review cases

under the UK legislation


What has been the impact so far ?

Procedures - Innovation Partnerships

9


Innovation Partnerships Regulation 31

• “Innovation” means the implementation of a new or significantly

improved product, service or process

• Recital 47 of Directive 2014/24/EU reflects that there is a need for

innovation to address “major societal challenges”.

• It acknowledges existing procurement procedures but recognises that

there is a need for contracting Authorities to establish a long-term

innovation partnership for the development and subsequent purchase

of a new, innovative product, service or works

Definition

10


Innovation Partnerships

• Are we using Innovation Partnerships ?

11


New Procedure – Innovation Partnership

• Contract notice or a Qualification System Notice (QSN) only permitted

call for competition – 30 day min timescale for responses to notice

• Procurement documents must define the minimum requirements,

information must be sufficiently precise to enable the economic

operators to understand the nature and scope of the required

solution.

• Utilise selection criteria and exclusions as in the other 2 stage

procedures, will include capacity in R&D and developing and

implementing innovative solutions

• Invite 3 or more economic operators to the phasing stage.

Advertising and Selection

12


Innovation Partnerships

• Structured Approach

• Successive phases following the sequence of steps in the research

and design process possibly up to the manufacturing of the supply or

provision of services

• Intermediate targets

• Payment in appropriate instalments

• May terminate partnership at each stage

• May negotiate

• Minimum requirements and award criteria not subject to

negotiation

• Award to one or more partners

• Standstill

• Contract award notice

Phasing stage

13


Hidden Risks

Evidence of Market Research

Well Resourced

Negotiations

Intellectual Property Rights

14


Review

• Can you identify any other potential risks?

15


Discretionary exclusion for poor past

performance

16


Key changes – selection stage

• Poor past performance – Regulation 57(8)(g)

• Self-cleansing provisions

• Maximum 3 years from relevant event

for discretionary exclusion

Additional discretionary exclusions

17


Hidden Risks

Ripe for Challenge

Must have evidence

Contract management

18


Review

• What are the potential benefits of the discretionary

exclusion for poor past performance.

Benefits

19


Dynamic Purchasing Systems (DPS)

20


What is a Dynamic Purchasing Systems (DPS)?

The DPS is available for works, services

and supplies commonly available

on the market.

As a procurement tool, it has some aspects that are

similar to framework agreement, but

where new suppliers can join at any time.

The DPS can be split into categories for

goods, services and work and

geographical locations

To establish a DPS the Restricted

Procedure ‘Must’ be followed

Regulation 34

21


Are we using Dynamic Purchasing Systems ?

72%

9%

7%

8% 4%

Councils NHS Housing Education GPO

22


Hidden Risks

23

Need resource to constantly manage the

system

Cost Implications

Can only run a mini-competition


Review

• What is the main advantage of a DPS ?

24


Availability of Procurement Documents

25


Electronic Procurement

• Regulation 53 (1) - Offer unrestricted and full direct access free of

charge to the procurement documents on-line (from date of

publication of contract notice or invitation to confirm interest)

26



• Where individual regulations refer to “procurement documents”, what

is meant by that wording changes based on the different stages of the

process that has been reached … at very early stages, fewer of the

documents, if any, would be included. We believe a purposive

interpretation is appropriate here.

• Is this a U-turn ?

CCS – Guidance on Electronic Procurement 17 September, 2015

27



• Contracting Authorities need to be mindful that this is the UK

governments interpretation legislation and is by no means a risk free

approach, not yet been tested in court.

• Best practice

• Openness and Transparency

• Speed – Time scales have been reduced

• Recitals (52) reflects that the availability of electronic documents

provides for efficiency and transparency

28


Contracts Finder

• Advertisement of contract opportunities on Contracts Finder

• Within 24 hours of advertisement ‘in any other way’

• For central authorities above £10,000

• For sub-central authorities above £25,000

• OJEU Contract Notices

• Contract documents to be available FOC and hyperlinked from advert

• Advertisement to include response deadline, how to respond and any

other participation requirements

29


European Single Procurement Document

30


ESPD - Regulation 59

• As of the 26th January 2016, contracting authorities are now legally

required to accept the ESPD from bidders as part of their response to

the selection stage process.

• What does this mean ?

• Is this a duplication of the Standard PQQ ?

• Recital 84 - can request supporting documents where it is considered

to be necessary for the proper conduct of the procurement procedure.

• Online only from 18 April 2017

31


Hidden risks

As the ESPD is a self-declaration document, could create

opportunities for challenge in two-stage procedures.

Add cost and delay the contract award

Checks on exclusion criteria, suitability and compliance left to the end of a process, what if they

do not comply?

32


Case Law

33


Recent Case Law

• Counted 4 Community Interest Company v Sunderland City Council

• Woods Building Services v Milton Keynes Council

34


Recent Case Law

• Lightways (Contractors) Limited v Inverclyde Council

• Remedy of Ineffectiveness

• Supplier Standing

35


Utility Contract Regulations 2016

36


Main changes

• Abolition of part A/B Services

• Now have Light Touch Regime (LTR) for services above

• Schedule 2 – Social and Other Specific Services (CPV)

• Threshold £785,530.

• Selection Criteria

• Utilities that are contracting authorities will be required to use the PCR

2015 mandatory exclusion criteria.

• Poor past performance / Self-cleaning

• Framework Agreements

• Duration will be limited to 8 years

• Call-offs awarded on the basis of objective rules and criteria

37


Main changes

• Award Criteria - Most Economically Advantageous Tender

• Life-cycle costing.

• Price / Quality Ratio

• Lowest price.

• Experience of supplier personnel (i.e. CVs) can be used at award

stage

• Abnormally low tenders

• Must be investigated

38


Concessions Contract Regulations 2016

39


Main Provisions

• What do the Concessions Regulation apply to?

• Applies to works and services concession contracts above

£4,104,394, in both Public and Utility Sector

• Some contracts are excluded and reflects public sector exclusions

• Utilities contracts excluded in the water sector following

‘Right2Water’ European Citizens’ Initiative concerned with perceived

threat of privatisation of water services

• Value of a Concession Contract

• The total net turnover generated over the duration of the contract

– the methodology use to calculated the estimated value must be

disclosed in the Concession Documents

40


Main Changes

• Duration of Concession Contracts

• If more than 5 years then should be justified i.e. maximum time

to recoup it investment

• Transparency

• Must publish a concession notice in OJEU for covered contracts

• Must publish a concession award notice in OJEU, 48 days of

award of contract.

• Award Criteria

• May be environmental, social or innovation related

• No requirement for ranking and weighting but – if not

must be listed in descending order of importance

41


Questions

42


Achilles Consultancy & Training

Fareita Udoh Head of Achilles Consultancy & Training

Daniel Bremner Account Manager

Jayne Wellman Administrator

Trainers

Liz Wilson-Lamb Senior Training Consultant

Debbie Metcalfe EU Procurement Advisor and Trainer

Kate Pucci EU Procurement Advisor and Trainer

Steve Kay EU Procurement Advisor and Trainer

Associates

Professor Sue Arrowsmith Legal Expert

The Team

43


Materials Disclaimer

The information in this presentation, which does not purport to be

comprehensive, is provided by Achilles Information Limited and has not

been independently verified.

While this presentation has been prepared in good faith, it is not, and

does not purport to, offer the recipient legal advice. No representation,

warranty, assurance or undertaking (express or implied) is or will be

made, and no responsibility or liability is or will be accepted by Achilles

Information Limited or its subsidiaries and affiliates or by its officers,

employees or agents in relation to the adequacy, accuracy,

completeness or reasonableness of the presentation or any other

information (whether written or oral), notice or document supplied or

otherwise made available to the recipient or any interested party in

connection with THEMiS services provided by Achilles Information

Limited or its subsidiaries and affiliates.

All and any such responsibility and liability is expressly disclaimed.

44

Achilles.com/linkedin

Twitter.com/Achillesltd

Facebook.com/AchillesLtd

plus.google.com/+AchillesGroupLtd

Thank you page

Contact details:

[email protected]

T: +44 (0)1235 838115

Achilles Information Limited