12.01.16
The public contracts regulations 2015: has anything actually changed in practice?
Source: NHE Jan/Feb 16
Andrew Daly, a specialist procurement partner at health sector solicitors Hempsons, examines some of the changes introduced by Public Contracts Regulations 2015 (PCR15) from a legal perspective, and how it has impacted on procurement professionals.
It is nearly a year since the Public Contracts Regulations 2015 (PCR15) came into force, but has a procurement professional’s day fundamentally changed; or is it business as usual?
Which regulations apply?
If a contract award procedure was commenced before 26 February 2015 then the Public Contracts Regulations 2006 (PCR06) will continue to apply. PCR06 will also apply to call-offs from framework agreements advertised or concluded before 26 February 2015. Processes commenced on or after this date should comply with PCR15.
There is currently an exemption for healthcare services commissioned by NHS England/CCGs if those services fall within the scope of the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013. PCR15 will not apply to these specific services until 18 April 2016; the exact details of how this will work are still not yet known.
Part B services and the light touch regime
PCR15 abolished the existing distinction between Part A and Part B services. A small number of former Part B services are now caught by the new ‘light touch regime’ (LTR) that PCR15 introduced, but a number of services previously classified as Part B are now caught by the full rules under PCR15.
Where the LTR applies, it applies for contract opportunities with a financial value of over £589,148. The LTR requires an advert to be published, a contract award notice to be published, and a fair and transparent process conducted to determine who will provide the services. The buyer has freedom to design the process to determine the successful provider, provided that the process is fair, transparent and treats all bidders equally.
Documents up front
PCR15 require buyers to make available electronically, from the date of the OJEU, all of the ‘procurement documents’. The definition of ‘procurement documents’ is wide and therefore this means that buyers should, to fully comply with PCR15, make available all of the process documents from the date of the OJEU, rather than producing them throughout the process.
For buyers utilising the restricted procedure, this is a big change as the pre-qualification questionnaires (PQQ), invitation to tender (ITT), evaluation criteria, specification and contract should on this basis now be available with the OJEU. This involves much more work up front to be fully compliant.
New/modified procedures
PCR15 has tweaked the existing procedures, and the negotiated procedure with notice has been replaced by the competitive procedure with negotiation.
In addition, a new procedure to deal with the procurement of innovative services/supplies/works has been introduced: the Innovation Partnership. Hempsons has already supported possibly the first such process; almost reaching contract close. Our experience is that it does provide buyers with a new way of procuring new and innovative solutions.
Shorter timescales
The minimum time limits for processes have been reduced under PCR15 by about a third. This means that processes can therefore in theory be run more quickly, although in practice we note that many buyers are sticking to PCR06 timescales for practical reasons.
Encouraging access
Buyers need also to be careful to comply with the requirements within PCR15 to ensure that they encourage smaller organisations to bid for contracts. For example, by considering the potential to split contracts into lots, and setting appropriate short-listing criteria.
Codification of case law
PCR15 now provides a statutory basis for a number of the key principles that had previously arisen from judicially decided legal cases. For example, the Teckal in-house test has now been set out in PCR15 (Regulation 12). This does not mean, however, that all relevant points, or indeed all relevant legal cases, are now covered in PCR15, and therefore procurement teams should remain aware of the new legal cases.
Material variation to concluded contracts
What constitutes a material variation to a contract under procurement law has now been clarified in Regulation 72. This regulation applies to all concluded contracts (including those concluded under PCR06) and provides a number of tests to determine when a change is material and hence requires a new procurement process to be conducted.
Reporting requirements
Regulation 84 sets out details of reports that need to be maintained by buyers when conducting procurement processes for a contract/framework agreement/DPS, and when calling off a framework where a mini-competition is required.
Buyers should already have much of the information to satisfy this regulation to hand, as part of running any process, but there is now a requirement to prepare a formal report. Additionally, there is a requirement to document progress and decisions in procurement processes. We expect that a failure to have prepared such reports will be exploited by suppliers seeking to challenge the outcome of tender exercises.
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