The Public Contract Regulations 2015 - are you ready?

Next week marks the end of meteorological winter and theoretically the start of spring. Seasoned observers of the weather will know that there could be a wait in store before the first flush of British sun, but at least the Public Contract Regulations 2015 have arrived on time!

Any relevant contract advertised on or after the 26 February 2015 will be subject to the new Regulations (or the majority of them at least). For contracting authorities, this means a wholesale review of their contract award procedures, but what does it mean for those small and medium sized enterprises that the Regulations are designed to help?

The Regulations are in effect a transposition of European Directive (2014/24/EU), but with the benefit of the reforms put forward by Lord Young in May of 2013 aimed at creating an "SME friendly single market for public procurement". The headline news for SMEs is that local authorities are expected to advertise all contracts worth £25,000 (and £10,000 for central contracting authorities) or more (excluding VAT) on the government's Contracts Finder website. That's all well and good, but for many SMEs the world of public sector procurement will be a new and daunting landscape. Those with experience of the procurement process will recognise that just knowing your way around the process can make the difference between procurement grief and procurement glory!

Another innovation is the abolition of the pre-qualification stage for those procurements below the EU threshold for goods and services, but above the £25,000 and £10,000 limits referred to above. The threshold is currently set at £111,676 for central government contracts and a more generous £172,514 for public bodies outside of this central band. This on the one hand means an end to pre-qualification questionnaires for some procurements, (in theory improving accessibility), but on the other potentially leaves unchecked the number of tenders that must be subjected to thorough evaluation. The anomaly here is that contracts falling under those lower thresholds may still have a pre-qualification stage. If that seems counter-intuitive, the Crown Commercial Services has been quick to point out that "a PQQ is unlikely to be necessary or proportionate below these thresholds".

Whilst the publication of revised Regulations inevitably means a good deal of attention is paid to the letter of the law, the Government has seemingly looked beyond purely administrative matters by implementing a new regime for payments. Contracting authorities will, with the introduction of the Regulations, be expected to set an example by making payments inside a 30 day deadline. Contractors will in turn be required to extend this payment policy to their subcontractors. Failure to do so will not let the contractor off the hook as these payment terms can simply be implied into the contract. This makes good economic sense and in the wider context of economic recovery its import that cash flows readily throughout the system. For this policy to work, contracting authorities have to play their part and stick to the rules. For those interested in transparent governance the news that contracting authorities are now required to publish statistics on their payment record will be something of a coup.

The difference between the seasons and new legislation is that with the weather, one day in the near (or not so near) future the sun will shine again. Whether the new Regulations will have their intended effect is anyone's guess. We'll be watching the skies in the meantime.