How will the Government implement the new EU Public Procurement Directives?

We explained in last month's update that the implementation of the new EU Public Procurement Directives is progressing and that the government is expected to transpose the Directives into domestic law by the end of this year. It is expected that the majority of the content of the directives will be implemented using a "copy out" approach and therefore reflecting the directives much more closely than has been the case with previous procurement Directives.

To prepare you for the changes, we will issue a series of updates over the next few months, with a particular focus on explaining some of the provisions of the new Directives that will not be transposed by the government by using a "copy out" approach, and therefore explaining the possible options the government will have when deciding how to implement such provisions.

In this month's update we will be considering the decisions affecting the government in respect of Articles 18(2), 19(2), 20(1), 22(4) and 22(6)(b) and (c) of the Public Procurement Directive (2014/24/EU).

Article 18(2) - Principals of Procurement

Article 18(2) allows Member States to take appropriate measures to ensure that in the performance of public contracts economic operators comply with applicable obligations in the fields of environmental, social and labour law.

The UK has highlighted that it has three potential choices to be able to implement this Article:

1. Regulatory measures;
2. Administrative measures (such as policy or guidance material); or
3. A combination of these approaches.

Although the government has suggested that adopting only administrative measures will be easier, it may not ensure compliance. It is possible that the government will then also specify in guidance that contracting authorities must include relevant obligations in contract clauses, and should these be breached it would result in grave professional misconduct, which therefore could result in the successful bidder being excluded from future competitions.

Articles 19(2) - Economic Operators

The Directive does not require potential bidders to have a specific legal form in order to submit a tender (e.g. they are not required to be a natural or legal person).

The government do not expect this to be an issue when implementing the Directive; however, it has suggested it may adopt an administrative approach by providing standard contract terms to cover group participation, or alternatively leave it as a matter up to contracting authorities' discretion to include with the government monitoring compliance centrally.

Article 20(1) - Reserved Contracts

Article 20(1) gives the government the option to provide contracting authorities with the ability to reserve the right to participate in public procurement procedures to sheltered workshops and economic operators whose main aim is the social and professional integration of disabled or disadvantaged persons.

The government is in discussion with the relevant departments (most likely including those that deal with policy for disabilities) as to whether the current approach of allowing flexibility to reserve contracts will remain.

Article 22 - Rules applicable to Communication

Article 22(4) provides that public works contracts and design contests may be required to use specific electronic tools. In such cases the contracting authorities shall offer alternative means of access until the tools become generally available.

Article 22(6)(b) provides that Member States shall specify the level of security required for the electronic means of communication in the various stages of the procurement procedure that is proportionate to the risks attached.

Article 22(6)(c) provides that where Member States conclude that the level of risk assessed in 22(6)(b) (above) is such that advanced electronic signatures are required, contracting authorities shall accept advanced electronic signatures supported by a qualified certificate, subject to certain conditions.

For the above provisions of Article 22, the government needs to decide whether the risk can be categorised in advance and therefore included within domestic legislation, or whether the class of risk will be too great and therefore the decision as to whether it is considered by Article 22 should be left to contracting authorities. Unfortunately, to date, the government has not provided any direction as to whether it is planning to transpose these provisions and, if so, how.

Look out for next month's update, where we will be considering the implementation of Articles 24 (Conflicts of Interest), 26(Choice of Procedures), 28 (Restricted Procedure), 36 (Electronic Catalogues) and 37 (Centralised Purchasing Activities and Central Purchasing Bodies).

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