New EU public procurement rules bring new risks – and rewards

25 June 2014 | Andrew Millross

Andrew Millross is a specialist in procurement and construction law at Anthony Collins SolicitorsOn the face of it, the new EU public procurement directives offer a win-win situation.

For government departments and rest of the public sector they open the door to a simpler, speedier process and greater flexibility. The changes also help to break down some of the barriers for suppliers, particularly SMEs.

But there is a downside. New rules could leave public bodies open to greater risks, particularly if they aren’t prepared for the new regime.

The new directives came into force in April and the UK government is looking to implement the changes this year. That is a very tight timescale and could leave public bodies exposed to having their tender decisions challenged – a message I delivered to procurement professionals at PfH Live yesterday.

Public sector organisations will have to react to changes very quickly to ensure they are fully compliant. The new procedures to select tenderers will involve suppliers self-certifying that they meet minimum requirements. Since this will not be checked until the end of the procurement process, there’s plenty of risks for procurement professionals here.

Public sector bodies will be able to exclude a supplier from the procurement process on the grounds of poor past performance. But this only applies to cases of significant or persistent failings and even then the exclusion is time-limited and the supplier must be given the opportunity to prove it has addressed relevant weaknesses.

Another significant change is the requirement to put tender and contract documents online as soon as an OJEU notice is published. This is far sooner than many public bodies are preparing them at the moment and could catch organisations out.

But let’s focus on the positives. There’s more scope to take advantage of life cycle costs, Fair trade and environmental issues when evaluating tenders. Soft market testing is encouraged, enabling government to see what the market can provide before deciding what to buy. The move towards breaking down contracts into smaller 'lots' will come as welcome news for SMEs, especially as it will be possible to limit the number of lots a single contractor can win.

Greater flexibility around the use of competitive dialogue for purchasing that is not ‘off the shelf’ will make it easier for organisations to develop better solutions with suppliers during the tendering process. It’s an example of how those who are up to speed with the new EU directives are more likely to benefit from greater innovation and, ultimately, better value for money.

Andrew Millross is a specialist in procurement and construction law at Anthony Collins Solicitors. The implications of the new EU directives are among the topics under discussion at PfH Live from 24-26 June

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