18 April 2016 was a significant date for procurement practitioners. As well as the new regimes for utilities and concessions contracts procurement coming into force on that date, it was also kick off day for The Public Procurement (Amendments, Repeals and Revocations) Regulations 2016. These regulations make amendments to several pieces of legislation but particularly to the Public Contracts Regulations 2015 (PCR 2015). From 18 April 2016, you will need to refer to an updated copy of the PCR 2015 that reflects the changes made. You can find one here on our procurement portal. In this article we highlight the main changes to be aware of.
The following are some of the more interesting amendments made to the PCR 2015:
Regulation 57 (Exclusion Criteria) is amended so that an offence under section 1, 2 or 4 of the Modern Slavery Act 2015 (ie, slavery and human trafficking) becomes a mandatory exclusion offence. We understand from the Crown Commercial Service that it intends release a new standard form PQQ plus guidance that will include this new ground (and that it will also include amendments to reflect the fact that the European Single Procurement Document is now in force; see our article here for more on this).
Duration of Exclusions for tax offences - Regulation 57(11) used to impose a five year exclusion period where there was a mandatory exclusion for an offence of non-payment of taxes and a three year period of exclusion where discretion to exclude was exercised in relation to a lower level breach. Although there remains an obligation to exclude where this kind of offence has been committed and discretion to exclude for lower level breaches, the “five year/three year” period appears to have been removed for these particular exclusion grounds.
Permitted modifications - Regulation 72(1)(b) is amended so that, to fall within this safe harbour, you need to demonstrate that additional works/services/supplies are required that were not included in the procurement initially, the that the value change is less than 50 per cent, and that the contractor cannot be changed because (1) there are economic and technical reasons (eg, interoperability with existing equipment/services) and (2) changing the contractor would cause significant inconvenience or substantial duplication of costs. The “and” here reads “or” in the current version of the PCR 2015 – so this safe harbour has narrowed significantly in scope from what is currently stated on the face of the regulations. However, the change has been made to reflect the fact that the parent Directive also uses “and” rather than “or”; our advice has been and continues to be that contracting authorities should assume that “and” is correct.
Permitted modifications (2) – we have already had the Edenred case and guidance from the CCS which tells us that we must apply Regulation 72 to modifications proposed after 26 February 2015, even where the original contract is governed by the 2006 Regulations, and that the Regulation 73(3) termination rights are to be implied in this situation as well. Regulation 118(5) of the PCR 2015 will now states this expressly, which provides some useful clarity on the position.
An area of interest to Commissioners and Providers in the health sector is around the coming into force on 18 April 2016 of the PCR 2015’s Light Touch Regime for the procurement of health services by CCGs and NHS England.
This area is already regulated by the NHS Procurement, Patient Choice and Competition) (No.2) Regulations 2013 (the NHS Regs 2013) and there is a certain dissonance between the two regimes. There was a possibility that these amendment regulations might amend either the PCR 2015 or the NHS Regs 2013 to give us a clearer steer on how the two are intended to gel. However, no such amendments feature and it looks like the government intends to leave it to practitioners to work out how to apply the law. You can read more about the two regimes, and our advice as to how to interpret the law post 18 April 2016, in my colleague Christopher Brennan’s articles on the Light Touch Regime here and here.