Regulated Procurement Speaker...•What has been the impact of the PCR 2015 - Negotiated Procedures - Innovation Partnerships - Exclusions - Dynamic Purchasing Systems - Availability

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Regulated Procurement

Debbie Metcalfe LLM MSc MCIPS

13th April, 2016


Achilles Consultancy and Training

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Today’s agenda

• Regulatory Framework of Rules

- How this may benefit the private sector.

• What has been the impact of the PCR 2015

- Negotiated Procedures

- Innovation Partnerships

- Exclusions

- Dynamic Purchasing Systems

- Availability of ‘Procurement Documents’

- Material Change

• Reflect some of the main changes under the UCR 2016

• Recent case law

- Lightways (Contractors) Limited v Inverclyde Council

New 2015 Procurement Contract Regulations

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Timetable

• 28 March 2014

• EU Directives – Public/Utilities/Concessions published in OJEU

• 26 February 2015

• The Public Contracts Regulations 2015 (PCR 2015)

• PPN & CCS guidance continues to be issued

• 18 April 2016

• The Utilities Contracts Regulations 2016

• The Concessions Contract Regulations 2016

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'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


How may the Objectives of Public Procurement

benefit the Private Sector?

Objectives

Value for money

Accurate specifications

Integrity

Negate conflicts of

interest

Accountability

Confidence

Equal Treatment /Fairness

Encourages competition

Effective Procurement

process

Methodical approach

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Procedures

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Procedures where negotiation is permitted

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• There are 3 formal procedures where Negotiation is permitted, but

must be justified.

• The Competitive Procedure with Negotiation (CPN)

• Competitive Dialogue (CD)

• The Innovation Partnership procedure

• These procedures reflect Recital 42 of the 2014 Directive, which

reflects the need for increased flexibility for negotiation


Availability of Procedures

• Following an Open or Restricted procedure only irregular or unacceptable tenders are submitted

• Requirements involve design or innovative solutions

• Need adaption of readily available solutions - effectively not ‘off the shelf’

• Complexity or legal and financial make-up or risks attached

• Can’t establish specification by reference to existing standard

Easier to justify negotiation via CPN and CD, justification is

identical for both procedures,

Regulation 26 (4)

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Competitive Procedure with Negotiation

Define minimum requirements and award criteria in procurement

documents

Negotiation with tenderers to improve the content

• Negotiate on the initial and all subsequent tenders

• Cannot negotiate on minimum requirements or the award criteria.

• Can reserve right NOT to negotiation

• May conduct in stages to reduce number of bidders

On conclusion of negotiation will call for new or revised tender

• Verify that final tenders in conformity with min requirements

• Assess final tenders on basis of award criteria

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Role of Competitive Dialogue Procedure

Define minimum requirements and award criteria in procurement documents

• Cannot negotiate on minimum requirements or the award criteria

• Enter into dialogue with selected bidders

• Many be several phases of dialogue

• No prescribed time scales for dialogue or return of tenders

Tenders received after close of dialogue may now be

“clarified, specified and optimised” Changes to the

‘essential aspects’ of the tender cannot be made.

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Role of Competitive Dialogue

Does Competitive Dialogue have any advantages?

Public Sector Competitive procedure with negotiation prohibits negotiation on final tenders.

Negotiations now expressly permitted with preferred bidder to ‘confirm financial commitments or other terms’ (cannot change essential aspects)

• More scope for post tender negotiations in Competitive Dialogue?

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Innovation Partnerships

• Structured partnership

• One or more partners

• Successive stages following the sequence of steps in the research and innovation 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 (or reduce partners where more than one)

• May negotiate

• Ensure structure of partnership reflects degree of innovation

• Minimum requirements and award criteria not subject to negotiation

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Key changes at Selection Stage

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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

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Selection Stage - Additional Mandatory

Exclusions

• Conviction for terrorist offences or offences linked to terrorism

• Conviction for terrorist financing

• Conviction child labour offences and human trafficking

• Modern Slavery Act

• Obligations relating to payment of taxes or social security

• Apply where conviction by final judgment (or judicial / administrative decision in

the case of non-payment of taxes or social security)

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Dynamic Purchasing Systems (DPS)

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What is a Dynamic Purchasing Systems ?

The Dynamic Purchasing System (DPS) is a procedure available for contracts for works, services and

supplies commonly available on the

market.

As a procurement tool, it has some aspects that are similar to an electronic framework agreement, but where new suppliers can join

at any time.

The DPS can be slit into categories for

goods, services and work and geographical

locations

To establish a DPS the Restricted Procedure

‘Must’ be followed

Regulation 34

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Establishing a Dynamic Purchasing System

• Publish Contract Notice or PIN using Restricted procedure

• No duration limits, but must be disclosed in the call for competition

• All suppliers that meet the selection criteria must be admitted to the

system

• This initial DPS set-up phase only covers the exclusion and selection

criteria, as used in other procedures, and as set out in Regulations

57-64 of the PCR 2015.

• No standstill for the DPS itself

• No requirement for Contract Award Notice – continually open

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Using a Dynamic Purchasing System

• Invite all participants to submit a tender for the category they are

registered against.

• 10 day mini-tender period or agree for sub central authorities

• Award the contract to the supplier who submits the best tender

based on the award criteria disclosed in the call for competition

• The award criteria to be used for the award of individual contracts

are to be set out in the original contract notice.

• These criteria may be ‘formulated more precisely’ for specific

contracts, as set out in the invitation to tender for the specific

contract.

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Using a Dynamic Purchasing System

• There is no obligation to undertake a ‘standstill period’, although

there may be some benefits in doing so as the Remedy of

Ineffectiveness applies

• Published contract award notice in OJEU

• Can be grouped and published quarterly within 30 days after the end

of each quarter;

• Must publish award on Contracts Finder within 90 calendar days of

the contract award date but not before publication of the OJEU

contract award notice

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Are we using Dynamic Purchasing Systems ?

72%

9%

7%

8% 4%

Councils NHS Housing Education GPO

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Availability of Procurement Documents

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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)

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• 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

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• 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

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Material Change

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Material Change to Contract

• Material change defined

• Admission of different candidates/different award decision

• Changes economic balance in favour of supplier

• Extends scope considerably

• Change of supplier not provided for

• Material change requires new award procedure

Regulation 72

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Utility Contract Regulations 2016

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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

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Main changes

• Material change defined

• 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

• Availability of Procurement Documents -

• Offer unrestricted and full direct access free of charge to the procurement

documents from the date of publication of the contract notice or the date

on which an invitation to confirm interest is sent.

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Recent Case Law

• Lightways (Contractors) Limited v Inverclyde Council

• Remedy of Ineffectiveness

• Supplier Standing

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Questions

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Achilles Consultancy & Training

Fareita Udoh Head of Achilles Consultancy & Training

Daniel Bremner Associate 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

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