GLD Vacancies

Nottingham University Public Procurement Course

Negotiating strategy

EU flag iStock 000009228887XSmall 146x219There have been some wins for the UK in negotiations over the new EU procurement directive, reports Andrew Millross.

Negotiations within the EU on the draft EU procurement directive are progressing and on 19 October the Commission issued a revised draft. The Cabinet Office expects the Directive to be in its final form by early 2013, with UK law adopting the rules coming into force by mid-2014.

This article updates readers on the key changes to the proposals as the negotiations have progressed, and how these are likely to affect local authorities, registered providers of social housing, ALMOs and other contracting authorities.

Oversight body

The original proposal was that each EU member state would be required to set up a body responsible for overseeing the EU procurement rules, with power to review procurement decisions. We have suggested before that such an “oversight body” would become an alternative route, outside the courts, for contractors to challenge procurement decisions. At that stage, it looked as though the EU procurement rules were going to be enforced by a regulator with “teeth”. However, following lobbying by the UK and other EU member states, this proposal has now been dropped.

Mandatory division into lots

The original draft Directive required a contracting authority to give reasons if they chose not to split larger contracts into lots. This would have applied to any works contract above the OJEU tendering threshold and any supplies contract worth over €500,000. Since this was perceived as an administrative burden, albeit one that would not be difficult to comply with, this requirement to “divide or explain” has now been removed.

Competitive procedure with negotiation

There have been some changes to the availability of the “competitive procedure with negotiation”, which is proposed to replace the negotiated procedure. In response to criticisms that the EU procurement rules are too inflexible, the Government has pushed in the negotiations for competitive dialogue and this new competitive negotiation procedure to be made more widely available.

The current proposal means that either of these procedures will be able to be used for any contracts that go beyond “off the shelf” purchasing. The Regulations include a number of examples of contracts that are regarded as being not “off the shelf”.  These include construction contracts for “non-standard buildings”, construction contracts which involve design or innovative solutions and supplies and services contracts that require the adaptation or design of supplies or services. It remains to be seen how widely the courts will interpret this, as potentially this wording could encompass any works or services contracts.

Prequalification checks at end of process

The significant changes that are proposed to prequalification are likely to go ahead. These include allowing bidders to “self-declare” that they meet the minimum prequalification requirements. Only the winning bidder will have to prove they meet a contracting authority’s minimum requirements at the end of the process.

This proposal has been backed by the Government, and has received widespread support in the negotiations. As we have said earlier, whilst this proposal may be helpful in reducing administration, it is likely to increase the risk of challenge where a contractor “wins” the contract but is then deselected for failing to meet the authority’s minimum prequalification criteria.

Availability of procurement documents

The proposed new rules will require all “procurement documents” (including the contract documents) to be made available on the internet from the date of the OJEU notice. This requirement appears unchanged in the revised draft. It means that contracting authorities will need to ensure that all procurement and contract documentation is ready before placing the OJEU notice. While this is good practice, at present it does not always happen. It is also difficult to see how this will work in procedures like competitive dialogue where the documentation is developed throughout the procurement process.

Contracting authorities will also have to move to 100% electronic tendering by mid 2016. While the Government supports 100% e-procurement, it is still arguing that such an absolute deadline may not be achievable.

Part A/Part B Services

The proposal for the full EU tendering procedures to apply to Part B Services, although opposed by the Government, is supported by a majority of member states.  As a compromise, the Commission has suggested maintaining a “light-touch” regime for a wider range of services, such as grounds maintenance, site security, agency staff and legal services. The Government is keen to ensure this is as “light” as possible and extends to as wide a range of services as possible. However, potentially this could mean that there are three separate regimes:

  • one for the current and any new Part A services;
  • one for Part B services other than health and social care; and
  • one for health and social care and any other services that eventually fall within the proposed “light-touch” regime.

Although 2014 may seem some way off, contracting authorities must begin to adapt their procurement processes so that they will be fully compliant with the new regime in time. This process needs to begin as soon as the text of the new Directive has been finalised.  

Andrew Millross is a Partner at Anthony Collins. He can be contacted on 0121 212 7473 or by This email address is being protected from spambots. You need JavaScript enabled to view it..