New procurement directives

With the European Parliament adopting three new directives covering public procurement on 15 January 2014, utilities procurement and the procurement of concessions contracts, we look at the potential implications for the third sector.

On 15 January 2014, the European Parliament adopted three new directives covering public procurement, utilities procurement and the procurement of concessions contracts. The texts have now been approved by the European Council and will come in to force 20 working days after publication in the Official Journal of the European Union (OJEU).

Although the UK has a maximum of 24 months in which to translate the new directives into national law, the Cabinet Office has indicated it is working to an expedited timetable, aiming to introduce new UK Procurement Regulations towards the end of 2014. These regulations will replace the existing Public Contracts and Utilities Contracts Regulations 2006 and also introduce an entirely new regime for concession contracts. The Cabinet Office has already started informal consultation on those new measures where the UK has some flexibility or choice in how it implements the new rules, and further consultations on the proposed draft UK regulations will follow this.

These changes are of particular relevance to charities and third sector organisations who have an increasingly important role to play in delivering public services and invariably have to secure this by successfully navigating their way through a public procurement process. Some charities are also “contracting authorities” in their own right and may need to run public procurement exercises when awarding their contracts.

The new rules bring additional opportunities for the third sector when bidding for public sector work as one of the aims of the new directives is to break down barriers to competition and provide greater access to procurement for smaller organisations and SMEs. It also introduces a new “light touch” regime for health, social and other community services (which will replace the previous Part A/Part B services distinction) including a requirement to place an OJEU notice for contracts valued in excess of €750,000, where previously an OJEU notice was not required. There are also opportunities to “reserve” contracts for “mutuals” that spin out from the public sector but retain their public service objective. Further details on the main changes are included in the European Parliament’s press release (available here). Also useful is this memo of FAQs on the reforms.

The Mills & Reeve procurement team will also be tracking the progress of the new UK Regulations and updating our procurement portal and blog to include the latest developments.

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