In this article we look at the so-called Light Touch Regime, or LTR; the procurement rules applicable to the procurement of health, social and other services listed at Schedule 3 of the Public Contracts Regulations 2015. The LTR has been a feature of the public procurement rules since 26 February 2015; however, from 18 April 2016, the LTR now also regulates the procurement by CCGs and NHS England of health services for the purposes of the NHS. In our other LTR article we look at the practicalities of designing a compliant LTR process and offer some tips and tricks for procurement practitioners faced with running procurements under it for the first time.
On 18 April 2016, public procurement law underwent a subtle change. That date marked the deadline for the 2014 EU directives on public procurement to be implemented, in their entirety, into the legal systems of all EU member states; accordingly, any un-implemented parts of the directives – the “rule books” containing the detailed procedural regimes governing public procurements – had to become part of our national laws.
In the UK, most of the public sector Directive was implemented in February 2015, and so public procurers will already be familiar with the changes it introduced. However, a significant exception comes in the form of the so-called Light Touch Regime, or LTR – the part of the Directive containing a more relaxed set of rules for the procurement of certain services not considered as important to the European Single Market as most others – and specifically the application of the LTR to the procurement of health care services for the purposes of the NHS in England. The Government had spared NHS commissioners the LTR for as long as it could, in order to allow time for them to adapt to the prospect of the LTR when it ultimately came. Finally, on 18 April 2016, the day could be postponed no more: NHS commissioners must therefore now follow the LTR when procuring health services. This will have a number of implications for them.
We therefore thought it timely to provide some thoughts on how an LTR procurement might look – pointing to some things which procurers must do, must not do, and might wish to do when running a procurement to which the LTR applies.
The statutory framework
The rules of procedure governing the LTR are set out in Regulations 74 to 76 of the Public Contracts Regulations 2015 (PCR). However, other parts of the PCR are also relevant, and we explore those below.
The LTR replaces the previous EU and domestic rules which concerned the procurement of so-called “Part B” services (those rules were less rigorous than the EU rules regulating the procurement of most other services), and applies to procurements commenced from 18 April 2016. Any procurements already underway before then are not subject to the LTR.
As we have reported on previously, an additional set of procurement rules applies to the procurement of health care services for the purposes of the NHS, by NHS commissioners: the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013. We won’t deal with those Regulations in detail here.
The LTR applies to the procurement of:
- Contracts for any of the services listed in Schedule 3 of the PCR (importantly, the range of services in that schedule is narrower than the old “Part B” range of services, as there is no “other services” category capturing any services not specifically mentioned. This means that there are potentially many former “Part B” services whose procurement now falls into the fully-regulated zone, and is no longer “light touch”).
- Where the total value of the contract is at least £589,148 (ie, EUR 750,000). Why? Because this figure marks a notional value threshold below which, according to Recital 114 of the current EU public procurement Directive, a contract for “services to the person” will “typically not be of interest to providers from other Member States, unless there are concrete indications to the contrary”. If procurers are letting contracts below that threshold, they should therefore still ask themselves whether such “concrete indications” in fact exist: the answer will depend on the factual matrix in each case.
However, even where the LTR does not apply because the contract value is too low, some procedural rules may still bite – in the form of the so-called “Lord Young” rules (more below), and the standing financial instructions of procurers – which may operate in tandem and require advertisement on the Government’s “Contracts Finder” website.
The LTR: a pen-portrait
The LTR essentially requires procurers to:
- Post in the OJEU a contract notice - or a Prior Information Notice - making known their intention to award a contract for any Schedule 3 service above the LTR threshold – thereby, by definition, inviting expressions of interest.
- Thereafter, by definition, hold some sort of (competitive) award process following this.
- Ensure that their award procedures are at least sufficient to ensure compliance with the principles of equal treatment and transparency.
- Run the process in conformity with the information in the call for competition (but may depart from it in certain circumstances which would not result in breach equal treatment and transparency).
- Allow reasonable and proportionate time and time-limits for the whole process.
- Publish a contract award notice (once awarded – these can be grouped for publication quarterly).
An OJEU call for competition (Contract Notice or PIN) can be dispensed with only where:
- The contract is sub-threshold.
- The “negotiated procedure without notice” can be used – ie, where a procurer can legitimately approach one provider direct.
- There is some other reason why the EU rules don’t require a competition (perhaps because what might otherwise have been a procurement is instead an in-house arrangement, or a public-to-public co-operation).
Given that within these parameters there is some flexibility as to the design of an LTR process, our other article offers some tips and tricks as to how to design a compliant LTR process.