Procurement law update 15 th November 2018 Newcastle | Leeds | - PowerPoint PPT Presentation

Ward Hadaway Guest WiFi Email: guest@wardhadaway.com Password: F1rew0rk$ Procurement law update 15 th November 2018 Newcastle | Leeds | Manchester

2 Housekeeping Ward Hadaway Guest WiFi Email: guest@wardhadaway.com Password: F1rew0rk$ Newcastle | Leeds | Manchester

Speakers 3 Melanie Pears Tim Care Lucy Probert Partner | Head of Public Partner | Public Sector Solicitor | Public Sector E: tim.care@wardhadaway.com E: lucy.probert@wardhadaway.com Sector T: 0191 204 4224 T: 0191 204 4286 E: melanie.pears@wardhadaway.com T: 0191 204 4464 Newcastle | Leeds | Manchester

Brexit – an update Newcastle | Leeds | Manchester

News and contingency plans 5 » No news on an EU deal – no update on procurement » Withdrawal bill – PCRs remain UK legislation but no role for the ECJ » Treaty Principles to be given direct effect » HoC briefing paper and CCS paper - Accessing public sector contracts if there’s no Brexit deal » Government taking steps to maintain WTO Agreement on Government Procurement » All procurements started pre- March 2019 will have to comply with current arrangements » Replacement for OJEU - “a replacement UK -specific e-notification service will be made available” Newcastle | Leeds | Manchester

Innovation in Procurement Newcastle | Leeds | Manchester

Innovation in Procurement 7 » What is “Innovation Procurement”? » What is “Pre - Commercial Procurement” (PCP)? » What is “procurement of innovation” (PPI)? » Innovation Partnerships Newcastle | Leeds | Manchester

Innovation Procurement 8 » One or both of: » buying the process of innovation (R&D) » buying the outcomes of innovation » What do we mean by “innovation” » Role of state aid » Use of a competitive tender procedure » PCP Newcastle | Leeds | Manchester

Pre-Commercial Procurement 9 » Best known form of procurement of R&D » A family of processes » Procurement of research by a Contracting Authority with the object of stimulating innovation that the Contracting Authority wants to benefit from at a later stage » Once the product and service does exist, procurement of innovation (PPI) is taking place – separate Newcastle | Leeds | Manchester

Public Contracts Regulations 2015 10 10 » Regulation 14 – research and development services » PCRs apply if: » Benefits accrue exclusively to the Contracting Authority for its use; and » The service is wholly remunerated by the Contracting Authority » So, PCP is excluded from the PCRs » Costs and intellectual property are shared » But, state aid rules apply » So there must be a competitive process – basic principles Newcastle | Leeds | Manchester

Innovation Partnership 11 11 » PCRs Regulation 31 » Combination of a purchase of R&D and the subsequent purchase of the resulting goods/services in one procedure » Can be set up with one or several suppliers » Structured in successive phases » Can make a decision after each phase to terminate or reduce the number of partners (provided set out in the procurement documents) » State aid free if leads to the purchase of unique or specialised products or services Newcastle | Leeds | Manchester

Delivering Social Value Newcastle | Leeds | Manchester

Delivering Social Value 13 13 » 2012 Act » Lord Young review » PCRs 2015 » Case study » Latest developments Newcastle | Leeds | Manchester

Public Services (Social Value) Act 2012 14 14 » "An Act to require public authorities to have regard to economic, social and environmental well-being in connection with public services contracts" » "Social Value seeks to maximise the additional benefits that can be created by providing benefits above and beyond the core services themselves" Newcastle | Leeds | Manchester

How Does It Apply? 15 15 » Services only » Above threshold » Must consider how the procurement might improve the economic, social and environmental well-being of the area Newcastle | Leeds | Manchester

Lord Young Review 16 16 » Lack of awareness » Inconsistent approach » Difficulties with measurement » "Where it has been taken up, it has had a positive effect, encouraging a more holistic approach to commissioning which seeks to achieve an optimal combination of quality and best value" Newcastle | Leeds | Manchester

What Can It Achieve? 17 17 » Adds value at no extra cost » 20% average » Cost savings » Better commissioning Newcastle | Leeds | Manchester

PCRs 2015 18 18 » Regulation 67(3) » Award criteria can include social and environmental matters » Must be linked to the subject matter of the contract Newcastle | Leeds | Manchester

Case Study 19 19 » Local Authority procurement to install and operate smart parking sensors and improve internet skills » Contract value - £1million » Evaluation: » 70% quality » 15 % price » 15% social value » Target – social value of 5% (£50,000) Newcastle | Leeds | Manchester

Measuring Social Value 20 20 » Took Council-adopted outcomes » Supported by KPIs » Financial value attributed to each KPI Newcastle | Leeds | Manchester

Example (1) 21 21 » Outcome – more local people in work » KPI – number of job opportunities for NEETs » Value - £15,000 per opportunity Newcastle | Leeds | Manchester

Example (2) 22 22 » Outcome – education opportunity for STEM subject » KPI – number of hours training / education » Value – £20 per hour Newcastle | Leeds | Manchester

Bids 23 23 » Apprenticeships » Project for science students at local college » Re-training parking enforcement officers Newcastle | Leeds | Manchester

Latest Developments 24 24 » Cabinet Office announcement » Civil Society Strategy, August 2018 (DCMS) » Civil Society refers to individuals and organisations when they act with the primary purpose of creating social value, independent of state control. Social value means enriched lives and a fairer society for all » Aim is to ensure public spending is used to generate social value » Want to improve the use of the Act » Central government expected to apply Act to goods and works » Expected to ‘account’ for social value in procurement, rather than ‘consider’ » Look at its use in grants » Look at applying it in planning and community asset transfer Newcastle | Leeds | Manchester

Dynamic Purchasing Systems Newcastle | Leeds | Manchester

Dynamic Purchasing System – an introduction 26 26 » For purchases commonly available on the market » Similar to an electronic framework » Key differences: » Suppliers meet selection requirements » All suppliers meeting the selection criteria to be admitted » Suppliers can be admitted at any time, with no limits to number of suppliers » Contracts awarded during a second, competition stage Newcastle | Leeds | Manchester

Why might you use a DPS? 27 27 » Streamline procurement – single process for demonstrating suitability and capability rather than each time compete for a contract » Quicker process? » SME access – less onerous? Open to changing market throughout term? » Flexible as suppliers can join at any time – not locked out » If don’t meet requirements at first, can reapply » No maximum duration – although set out in contract notice and comply with Treaty Principles » Supplier can be deselected if no longer meet criteria – check periodically throughout DPS and certainly prior to award Newcastle | Leeds | Manchester

Establishing the DPS 28 28 » Regulation 34 » Follow restricted procedure » Call for competition and minimum 30 days to respond » Contract notice – specify nature of requirements and approximate quantities or values » Division into “categories” » Wholly electronic procedure » Stage 1 – only exclusion and selection criteria to gain admittance » Self certification of compliance with selection requirements and no exclusion grounds apply » No need for award notice at Stage 1 Newcastle | Leeds | Manchester

Awarding contracts 29 29 » Invite all suppliers admitted to category to bid » Similar rules to frameworks on award criteria i.e. award on basis of criteria set out in the original contract notice or “more precisely formulated” » Minimum timescale of 10 days for return of tenders » No obligation to have a standstill – best practice » Contract award notice to be published within 30 days or can group them on for submission on a quarterly basis » No specific rules on terms and conditions of contracts – can have different ones for different DPS categories however comply with Treaty Principles and have objective reasons for differences. Suitable for commonly used purchases Newcastle | Leeds | Manchester

Reasons not to use a DPS 30 30 » Bespoke, high value supply required » Ongoing management required by the Authority » Requirement to complete evaluation of new applicants within 10 days of receipt or 15 days if justified – need resources to do so » No mechanism for direct award » No limit on suppliers – can you manage large multi supplier competitions » Do you have the correct infrastructure to manage a wholly electronic procedure? Newcastle | Leeds | Manchester

Conflicts of interest An update Newcastle | Leeds | Manchester