CIHT – Procurement Seminar Jamie Walker – Strategic Manager (Place) – Commercial and Procurement Mike O’Dowd -Jones – Strategic Commissioning Manager – Highways and Transportation
Introduction and Housekeeping 1. The Procurement Regulations 2015 2. – what are the key changes? Procurement in action within 3. Highways and Transport at SCC Questions 4.
What will we cover? A look at some of the key changes and new rules in the Public Contracts Regulations 2015 focussing on: Public Sector Co-Operation: Is this procurement covered by the regulations? New procedures, and changes to existing ones Lots and how they are used Changes to the exclusion and selection processes Changes to contract award and evaluation criteria Pre-market consultation The different rules for social and other services – the “light touch regime” “Reserved” contracts Treatment of subcontractors Part 4 and the Young Reforms Modifications to existing contracts
Background PCR2015 incorporates the requirements of the EU Directive on Public Procurement that came info force on 26 Feb 2014, in addition to some UK specific requirements arising out of the Lord Young review. The proposed transcription in to UK Regulation went out for consultation Sep-Nov 2014 The text of PCR2015 was laid before parliament 5 th February 2015 A Procurement Policy Note (PPN) was published by Crown Commercial Services on 6 th February 2015
What is Public Procurement? The government's activity of purchasing the • goods and services which it needs to carry out its functions Public procurement is the phrase generally used • now to refer to this activity in the English language
The Three Phases • Deciding which goods or services are to be bought and when (procurement planning); • The process of placing a contract to acquire those goods or services which involves, in particular, choosing who is to be the contracting partner and the terms on which the goods or services are to be provided; and • The process of administering the contract to ensure effective performance.
Objectives • Integrity • Value for money. • Accountability • Equal treatment for providers • Horizontal policies • Opening up markets to international trade • Efficiency in the procurement process
The Regulatory Framework • Public contracts regulations 2015 • Classic Directive 2004/18 • Remedies Directive 2007/66 • Interpretative Communications • GPA • 2014 Directive 2014/24
EU Trade and the Underlying Principles Equal treatment: that all processes of commissioning and procurement • are fair, and don't exclude potential providers. Breach of this would be if you are discriminated against based on location, nationality or any other bias. Transparancy: a duty to ensure all commissioning and procurement • processes are transparant, so that all potential bidders can easily see and understand the procurement process and the purpose and broad activity of the subsequent contract. As a part of this, public bodies must make available the criteria on which they will be evaluating bids/tenders - so that potential suppliers can respond accordingly
EU Trade and the Underlying Principles Proportionality: a duty to ensure procurement process, evaluative • criteria for bids and contract terms are all proportionality to the size and technicality of the service and goods being purchased. For example, they cannot ask for financial standing well above the necessary level required to deliver the contract, or insist on qualifications and accreditations not necessary, or above national standards Free movement and non discrimination: a duty not to discriminate • between suppliers of member states. As a result of this, contracts cannot be awarded on the basis of a potential supplier being 'local'.
Contracts that are Regulated • Contract value is key (different thresholds depending on organisation) • Different levels for types of contracts • What is a publicly funded organisation? • Strange contracts - property development, service concessions and utilities
Are you actually awarding in-house? – Reg. 12 Teckal codified Similar control ↑ 80% activities from No direct (joint control Contracting private capital possible) Authority “Reverse Teckal ” possible
In-House – One parent (1) Authority sets up, and awards contracts to, a separate legal entity Conditions: Authority exercises control over entity similar to that which it exercises over its own departments More than 80% of the entity’s activities are for its parent There is no direct private capital participation in the entity
In-House – One parent (2) ‘ Similar control ’ - where authority exercises a decisive influence over both strategic objectives and significant decisions of the controlled body Control can be exercised by a third party which is itself controlled by the parent ‘ Reverse T eckal ’ – controlled body can award contracts to its parent ‘ Horizontal T eckal ’ – controlled body can award contracts to another body controlled by the same parent
In-House – One parent (3) SCC reverse reverse SPV1 SPV2 horizontal
In-House – Joint Control Where: Parents exercise jointly a control similar to that which they exercise over their own departments More than 80% of the entity’s activities are for its parents (or other entities controlled by the same parents) No direct private capital participation
Are you just co-operating with another public body? – Reg. 12 Only contracting authorities Co-operation to ensure public services are performed to achieve common objectives Co-operation governed solely by public interest considerations Public Services ↓ 20% on open market
New procedures and changes to existing ones What does the process look like? Procedures (Regs 26 & 29-31) Open and restricted procedures remain largely unchanged “ Competitive procedure with negotiation ” (CPN) and “ competitive dialogue ” (CD) now both available where: requirements “ cannot be met without the adaption of readily available solutions ” contract “ includes design or innovative solutions ”; or contract cannot be awarded without negotiations because of specific circumstances related to “ complexity, legal or financial make- up or risk” Innovation partnership (IP) covers initial product development and subsequent purchases tendered procedure – similar to CPN
Open & restricted procedures – minimum timescales (Regs 27, 28, 47) Procedure Situation PQQ Tenders Open normal N/A 35 days* with PIN N/A 15 days accelerated N/A 15 days Restricted normal 30 days 30 days* (except central government) with PIN 30 days 10 days accelerated 15 days 10 days * 5 days less if tenders submitted by electronic means Accelerated procedure available where: state of urgency “ duly substantiated by the contracting authority ” makes normal time limits “ impracticable ” Time limits must be sufficient to complete PQQs/tender (Reg 47)
Lots and contract limits (Reg 46) Divide or Can limit the number of lots a tenderer can: explain bid for; and/or win • Client must justify decision Maximum number must be stated in OJEU notice not to break down contracts How lot contracts are awarded to bidders who “win” into separate more than the maximum number of lots: lots criteria must be “objective and non - discriminatory” Justification • i.e. cannot simply “let contractor choose” must be set out in the Contracting authority can choose to combine several procurement (or all) lots in these circumstances as well provided they documents or state this up front. the client’s procurement Small lots rule remains the same. record
Being Ready - Procurement documents & e- tenders (Regs 2 & 53) Online availability of procurement documents “ Contracting authorities shall by including: means of the Contract, specification, cost model internet, offer ITT, tender submission requirements and “additional unrestricted and documents” full direct access free of charge to Compulsory e-tendering & communications the procurement From 18 April 2018 (buying clubs 2017) documents from Data integrity system requirements (e.g. no access the date of to tenders until after deadline) publication [of the OJEU notice]” Must document verbal communications impacting Reg 53(1) on tender submission or evaluation
Exclusion (Regs 24 & 57) New exclusion grounds Exclusion for “S ignificant or persistent deficiencies in the performance of previous contract prior public contract which led to early termination, damages or delivery problems other comparable sanctions” Conflicts of interest, collusion, breaches of environmental • Problems must have or employment law etc. been “significant” or “persistent” “Self -cleaning ” provisions • Must be on a prior public contract “Active collaboration”, compensation & “active measures” to prevent recurrence • Deficiencies must have led to “early Default exclusion period - 3 years (for discretionary termination, damages exclusion) or 5 years (for monthly exclusion) or other comparable Reflected in the standard PQQ sanctions” – would not apply if termination was under a “break clause”
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