The case for reform
Cabinet Office Minister Francis Maude recently urged public procurement staff to back the UK’s proposed changes to EU procurement regulations. Peter Smith reviews the government's suggestions – and sets out how likely they are to win Brussels' approval.
Raise the threshold for goods and services procurement
Yes, seems very reasonable – the threshold doesn’t seem to have increased for years, and when you’re talking about a four or five-year contract, a threshold of around £100,000 just seems to catch too many contracts within the whole panoply of EU regulations – OJEU adverts etc. But the EU may consider that this will reduce the openness by an undesirable amount – they like OJEU ads as they are the most open form of advertising.
Sensibleness rating : High
Chance of change: Medium
Allow temporary exemptions for employee-led organisations/mutuals
This is a tricky one. And incidentally, isn’t the Tory-led Government’s love of this type of organisation rather strange? All very Keir Hardie and old-fashioned socialism: my north-eastern mining forebears would approve! I can see where they are coming from but it does raise some issues around preferential treatment. Personally, I think there are bigger issues around employee-led organisations than public procurement rules (pensions for instance) but I think there is perhaps a happy medium to be negotiated with the EU. However, the EU may be nervous of this sort of relaxation; it may depend on how socialist the EU is feeling!
Sensibleness rating: Medium
Chance of change: Medium
Improve framework agreements and similar models (eg DPS), with much greater flexibility to add new suppliers
It would be a great help to be able to do this and would actually open up markets and competition if frameworks weren’t set in stone for four years. So I can see some movement here – but there will still have to be some sort of competitive process, perhaps falling short of an entire full-scale new competition, in order to select new suppliers.
Sensibleness rating: High
Chance of change: High (with constraints)
Enable faster procurement. Pare-back mandatory timescales to the absolute minimum
Particularly as so many competitions are now run with eSourcing platforms such as BravoSolution, Emptoris and similar, it seems sensible and entirely feasibility to tighten the timescales. But the Commission will want to keep to reasonable periods – you can’t issue a 100 page ITT and ask for it back tomorrow! And there may be a feeling that this will play into the hands of local suppliers who have an inside track on what is going on – which the Commission wouldn’t like – so I don’t think this is a “done deal” by any means.
Sensibleness rating: High
Chance of change: Medium
Allow procurers much more freedom to negotiate
This seems a great idea but this way madness lies. There are good reasons why the public sector is restricted in its ability to negotiate – go and ask other countries about the downsides of allowing “negotiation”. I need to stretch out a bit on this one so we’ll discuss it further in a further post on the Spend Matters blog. And this is one where reading the full UK response document is important; the detailed proposal is not quite as it sounds in this summary headline and in the PPN. So the rating here applies to the high-level statement rather than the detailed description, which is actually less controversial.
Sensibleness rating: Medium/Low
Chance of change: Low
Allow more flexibility on when and how suppliers’ and service providers’ past performance, skills and quality of service can be taken into account
This is the whole business around the separation of what you can ask at PQQ compared to tender stage. The current rules do appear complex and bureaucratic but there is some logic to them. For instance, would it be right to get a supplier to tender stage, and then suddenly decide they don’t have the skills to do the work? (You can’t do that at the moment). So I know where the UK thinking is coming from, but we probably need some good debate around this, and I suspect the EU will want to think carefully about this issue which is surprisingly complex.
Sensibleness rating: Medium
Chance of change: Medium
Simplify and reduce the burden of supporting documents which candidates have to provide
The detailed document says: “Provide that only short-listed candidates/the winning bidder should be required to submit and verify supporting evidence regarding selection criteria”.
I must confess – I didn’t know that it was the EU Regs that required the “burden of supporting documents". I thought it was usually the risk averse nature of the contracting authorities themselves who require lots of documents. But if the Regs can be changed to help, then yes, certainly a good idea!
Sensibleness rating: High
Chance of change: High
Provide more flexibility in the use of electronic marketplaces by public authorities
Absolutely yes – as long as we can keep the principles of fairness and transparency, the regulations need to move with the times and make it easier to use marketplaces, eSourcing, perhaps even optimisation platforms and technology. I think we will see some relaxation/change here, although perhaps not as much as we might ideally like.
Sensibleness rating: High
Chance of change: High
Provide clarification and clearer guidance on how social and environmental issues can be taken into account, and how they can help to achieve value for money
There’s no doubt that there can be merit in considering this type of issues for certain contracts. But the regulations are currently unclear; I’ve heard procurement people arguing that using “equalities” as a marked evaluation criterion for an office supplies contract is fine – not my interpretation! More clarity would be much appreciated.
Sensibleness rating: High
Chance of change: High
Peter Smith is a former President of the Chartered Institute of Purchasing and Supply, a consultant to public and private sector organisations, and editor of Spend Matters UK / Europe, the leading procurement blog.
