Organisations in the public sector are once again under increased scrutiny to reduce budgets through savings strategies and cost-reduction initiatives.
However, life will get more difficult if organisations are not seen to be implementing new requirements for procurement in the Public Contract Regulations, which came into effect February 2015.
On the positive side, these regulations will give public-sector bodies, new opportunities to win contracts, including the ‘innovation partnership’ rule. This will also give greater clarity and certainty for local authorities, registered providers and other agencies.
The European Union’s overall intention is to overhaul and streamline public procurement, but the unprepared could fall foul of the new regulations.
Public-sector organisations need to be aware of key areas that need to be addressed, such as the following:
1) Making amendments to contracts after they have been agreed – Changes can be made if they’re not considered to be ‘substantial’, or fall into one of the new exemptions. However, if this is not the case, organisations could leave themselves open to challenges if they do not complete the full procurement process again.
2) More contracts will need to be formally advertised as tenders – Previously, only certain services needed to go through formal tender processes. This now covers all service contracts – the old ‘part A’ and ‘Part B’ distinction has gone, although for some services, a new lighter touch approach has been introduced.
These new rules will bring benefits for local government, NHS and registered providers. The lighter touch approach can be used in health and social care and certain other contracts. For these kind of contracts, a new higher threshold of £625,000 has been introduced, although, they are not as regulated in terms of tender procedures. They must be advertised, with contracting authorities can set their own process, and even alter it while it is underway. They must however, take into account the changing needs of a service user, encouraging greater flexibilities.
In addition, the Cabinet Office want all contracts that fall between £25,000 (£10,000 for central government), and EU thresholds to be formally advertised on contracts finder, with all documentation published in full at the beginning of the tender process, making sure there is greater transparency.
3) Beware the exclusion of suppliers – Alterations to the shortlisting process will mean that public bodies can no longer exclude bidders on the basis of the old rules and tighter grounds have been introduced.
In summary, new EU procurement rules are an evolution, not revolution, registered providers and other public-sector bodies must be proactive in revising their procurement process. If they rely on previous documents and systems, they may find themselves faced with a challenge, which could mean their process could falter, or altogether collapse in front of them.
