In March this year three new procurement directives were published in the OJEU: a public procurement directive, a utilities procurement directive and a directive to regulate the award of concession contracts. The new directives will come into force on 17 April 2014 and it is expected the UK Government will try to implement these by the end of this year. Once implemented, the directives will replace the current UK procurement regime under the Public Contracts Regulations 2006 and the Utilities Contracts Regulations 2006.
The new procurement directives have three main objectives: simplification, flexibility and legal certainty, and as such incorporate certain aspects of well-established case law including the "Teckal" case on public to public co-operation and the "Pressetext" case on modification on contracts post award.
Public Procurement Directive: The key features of the new public procurement directive include:
- Innovation Partnerships - a new procurement procedure which enables a contracting authority to enter into research and development opportunities with multiple partners and at the end of the process select one partner to continue and utilise their research.
- Changes to procurement procedures - timescales for tender returns for all procedure types have been reduced and the circumstances in which a contracting authority can utilise the competitive dialogue procedure and the competitive procedure with negotiation (which is akin to the current negotiated procedure) are less restrictive.
- Removal of Part B services - the distinction between Part A and Part B services has been removed, however, a "light touch" approach has been introduced for social, health and other specific services.
- Poor performance - now expressly allows Bidders to be excluded for prior poor performance.
- "Most Economically Advantageous Tender" ("MEAT") - all contracting authorities must now award contracts on MEAT basis and not lowest price.
- SME participation - introduces rules that aim to make it easier for SMEs to participate in the procurement process, such as introducing limits on turnover requirements to twice the value of the contract and providing that contracts should be divided into lots.
Utilities Directive: Many of the rules in the public procurement directive have also been incorporated in the new utilities directive. In addition, utilities will be able to award contracts using the competitive dialogue procedure and the negotiated procedure although, unlike the new public procurement directive, there are no restrictions on the use of these procedures.
Concessions Contract Directive: The new concessions directive provides that contracting authorities and utilities must advertise concession contracts with a value above £4,290,000 in the OJEU. The duration of concession contracts must be limited to a maximum of 5 years, or the time in which the concessionaire could reasonably be expected to recoup the investment.
We wait to see what form these directives will take and especially whether the Government will have implemented them into national law by the end of this year.