The EU Modernisation Package on
Procurement°
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Jonathan Branton
May 2014
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©DWF LLP 2013 www.dwf.co.uk
Do we need new rules on public procurement ?
• A glimpse into the future……..
• Underlying requirements - simplification and flexible procurement (but what will
that really mean in practice)?
• Europe 2020 strategy – smart sustainable and inclusive growth
• Package of legislative proposals (public sector, utilities, concessions)
• Formally adopted on 15 January 2014
• Implementation into national law within 2 years (NB. UK Cabinet Office has
ambitious plans for early transposition, so that advantage can be taken of some
additional flexibilities)
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2
Looking at the key changes
• More freedom to negotiate – where requirements are not “off the shelf”
• Distinction between Part A and B services removed
• For CA’s other than central government, PIN can be used in place of individual
adverts for contracts using restricted and competitive procedure with
negotiation
• New higher threshold and lighter regime for social, health, educational services
(NB. Threshold of EUR 750k)
• Legal clarity that CA’s can take account of relevant skills and experience of
individuals at award stage (services, consultants, architects, lawyers etc.)
• Social as well as environmental criteria
– Use of labels with specific environmental, social or other characteristics
– But very specific requirements (must be linked to the subject matter of the
contract, label requirements based on objectively verifiable and non
discriminatory criteria, open transparent procedure involving all relevant
stakeholders, labels accessible to all etc.)
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©DWF LLP 2013 www.dwf.co.uk
Looking at the key changes
• Time limits on response times have been reduced by about a third (expressions
of interest and tender deadlines)
• Ability to reserve the award of certain services to mutuals or social enterprises
for a limited time limit (typically for outsourcing situations)
– This exception was strongly advocated by the UK, seeing it as a halfway
house between in house provision and full competitive outsourcing.
• Codify Teckal (in house exemption)/Hamburg Waste (public sector
collaboration)
• Codify Pressetext (changes to contracts)
• Electronic communication / e-procurement will become mandatory following 4 5 years after the directive’s adoption
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Improvements to exclusion grounds
• Poor performance under previous contacts will be permitted as a ground for
discretionary exclusion – how to measure?
• Where the CA has sufficiently plausible indications that economic operator
entered into agreements with other economic operators aimed at distorting
competition (price fixing, bid rigging)
• Where there are no less intrusive measures (ie. discretionary exclusion as
last resort) to remedy:
– a conflict of interest
– a distortion of competition arising from the prior involvement of the
economic operator in the preparation of the procurement procedure
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Safeguard measures
• Corruption - improved measures to counter
– Conflicts of interest
– Illegal attempts to influence the decision making process
– Undue preference in favour of those who advise the CA or involved in the
preparation of tenders
• Self-cleaning
– Dealing with economic operators who have mended their ways (or not)
– If measures considered insufficient and exclusion to continue, a statement of
reasons must be provided
– Maximum periods of exclusion must be specified by Member States. Where
the period of exclusion is not set by final judgment, it should not exceed 5
years for mandatory exclusions and 3 years for discretionary exclusions
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©DWF LLP 2013 www.dwf.co.uk
Measures aimed at assisting participation by
SMEs
• Focus on SMEs as engine for growth in EU
• Buyers encouraged to break contracts into lots (but discretion where not
justified)
– CAs may limit the number of lots that can be awarded to one tenderer
provided maximum number of lots per tender is stated in OJEU
notice/procurement documents
– Objective and non discriminatory criteria/rules to determine how evaluation
will be carried out, to be provided in advance
– Member States have possibility to make it obligatory to split contracts into
lots
• Turnover cap introduced to facilitate SME participation – general rule is that
CA’s cannot set turnover requirements at more than twice contract value
• Self declarations “European Single Procurement Document” to be introduced
allowing self certification that no grounds for exclusion apply and selection
criteria met
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7
ERDF Procurement Thresholds & action required
Estimated Value of Goods or Services
Action Required
Below £20,000
Sufficient degree of advertising; but likely not to affect Internal Market. Consider using their own
website or a portal such as ‘contracts finder’.
VFM must be demonstrated by requesting or obtaining 3 quotes or prices but this need not be done
through a formal competition.
£20,001 to OJEU threshold
The level of advertising must be sufficient to allow a level of competition, potentially from another
member state (if the contract award might be of interest to suppliers located in other Member States
and depending on other factors eg geographical location). Formal invitation to tender process must
be followed and the requirement advertised in the press and/or on the internet for a minimum of 10
days to enable fair competition.
Over OJEU threshold
Goods/Part A Services
Full advertisement in OJEU of a fully-compliant open/negotiated or other regulated process
Part B Services – the lighter-touch regime specified in the Regulations
Value of Works
Action Required
Below £429,999
Sufficient degree of advertising; but likely not to affect Internal Market. Consider using their own
website or a portal such as ‘contracts finder’.
VFM must be demonstrated by obtaining or requesting 3 quotes or prices but this need not be done
through a formal competition.
Over £430,000
The level of advertising must be sufficient to allow a level of competition, potentially from another
member state (if the contract award might be of interest to suppliers located in other Member States
and depending on other factors, eg geographical location). Formal invitation to tender process must
be followed and the requirement advertised in the press and/or on the internet.
Over OJEU threshold
Full advertisement in OJEU of a fully-compliant open/negotiated or other regulated process
“National Procurement Requirements” ERDF-GN-1-004 (https://www.gov.uk/erdf-national-guidance)
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Concessions
• Separate new regime for works and services concessions (public sector and
utilities)
• Threshold EUR 5m
• OJEU notice required
• No set procurement procedure but general principles of equal treatment and
non-discrimination apply
• Social and environmental considerations can be taken into account
• Specific rules on what is regarded as a material change to the contract
requiring a retender
• Some specific exclusions (e.g. the water sector, lottery services awarded on the
basis of an exclusive right)
• Usual remedies must be made available
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Our People
Jonathan Branton
Partner
Head of Central and Local Government
07736 563202
Jonathan.branton@dwf.co.uk
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Values
Our firm is driven by its core Values which focus on:
Our Clients
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Our People
Our Community
Our Environment
11
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