The Public Contracts Regulations 2015 - 12 Months on
The Public Contracts Regulations 2015 (PCR 2015) commenced on 26th February 2015, this guidance note summarises some of the key changes and lessons learnt in the 12 months since their introduction.
PCR 2015 implements the updated EU Procurement Directives into UK law; they have also brought in additional requirements for below threshold procurements through the Lord Young reforms.
Some of the key points are:
Contract notices and awards must go on Contracts Finder;
All procurement documents must be available and published when the advert goes out;
Ban on Pre Qualification Questionnaires (PQQ) below threshold;
Mandatory standardised PQQ for above threshold restricted procedure;
New procedures and paperwork
Contracts Finder lists public sector tendering opportunities, PCR 2015 mandates that all contracts above £25k that are advertised must also be advertised on Contracts Finder within 24 hours of the original advert being placed.
For the purposes of the Regulations ‘advertising’ is classed as bringing the opportunity to the attention of economic operators. This may include openly advertising the tender on In-Tend, if we chose to have a closed list (invite 5 suppliers) on In-Tend and do not publish the opportunity in the current or future tenders section of the system then we are not deemed to have advertised the contract.
If we place details of the opportunity in magazines, newspapers, trade journals etc. then this is also classed as advertising.
Mills and Reeve have noted that whilst we do not have an obligation to advertise a below threshold contract, if we advertise the opportunity elsewhere we must include a notice on Contracts Finder. There is a possibility that the general EC Treaty principles may require the advertisement of under threshold contracts if there is likely to be cross border interest.
There is no guidance as to how we determine if there is cross border interest, it is likely that case law in this area will provide clarification in the future.
PCR 2015 requires that all contract awards above £25k are posted to Contracts Finder, this is regardless of whether or not the original advert was placed on the system.
In-Tend is now set up to allow publication of opportunities and awards on Contracts Finder, for details please contact the Purchasing Team who have a guide. If you do not use In-Tend you must ensure you place the notice direct on Contracts Finder.
To make public sector contracts more accessible to SME’s the use of Pre Qualification Questionnaires below the thresholds has been banned.
Crown Commercial Services (CCS) has released a standardised PQQ for above threshold procurements, this must be used for all procedures where a PQQ is required. If the University alters any of the wording of either the core or additional modules it is classed as a reportable deviation. All deviations must be reported to CCS, they have a mystery shopper which will be checking to ensure public sector authorities are complying with this requirement.
Within the PQQ most sections are ‘self-certification’, the University is not allowed to verify the information suppliers provide until the point we are about to award the contract.
In practice the new standardised PQQ is very inflexible and as a result there have been a lot of complaints from the public sector. CCS is currently working on a revised version.
Payment of Invoices and Sub-Contracting
Regulation 113 puts an obligation on the University to pay all valid and undisputed invoices within 30 days. We must also ensure that our suppliers apply these payment terms to their own sub-contractors that are undertaking work for the University. You must ensure your terms and conditions of contract set out this requirement. The University must produce an annual report on the proportion of invoices paid on time.
In practice it is not clear how we will monitor payment terms through the supply chain.
Where the University is procuring works or services that are to be provided at a University facility, we must comply with the new Regulation 71. This states that following an award decision and before the contract commences the University must get the main contractor to provide details of all the known sub-contractors they will be using. We must ensure our terms and conditions reflect this and also require the contractor to keep the University aware of any changes to their supply chain.
Regulation 84 Report
The University must write a report for each above EU threshold contract or framework awarded. This does not include framework call-offs. Regulation 84 sets out the information that must be included in the report, the reports can be requested for submission to the Cabinet Office at any time.
The Purchasing Office have produced a template should you require one. The University’s external audit team have also asked that the University gets sign off on all contracts prior to award, the Purchasing Team have included this in the section 84 report and produced a smaller award report for below threshold procurements.
Electronic Availability of Procurement Documents
The University must give suppliers free, electronic and unrestricted access to all of the procurement documents from the date that the OJEU notice is published.
This includes but is not limited to the PQQ, tender document and terms and conditions of contract, drawings etc. It is no longer permissible to release the PQQ and finalise the tender documents whilst the PQQ is out.
You must ensure that any terms and conditions you include as part of your contract give the University the right to terminate the contract in the following instances:
There has been a substantial modification to the contract within the meaning of Regulation 72;
The Contractor should have been excluded under Regulation 57 (exclusion clauses);
The Contract should not have been awarded in view of a serious infringement under European law which has been declared as such by the Court of Justice.
The new timescales for the standard procedures have been shortened – remember these represent the minimum time allowable. You must ensure you allow suppliers a reasonable amount of time to complete the tender.
There are two new procedures:
1) Competitive with negotiation
2) Innovation Partnership
These both allow negotiation with suppliers.
There is still a lot of confusion amongst the public sector as to the application of the new Regulations, in reality case law will provide more clarity as it comes out. If you are in any doubt please contact the Purchasing Team.
Where the procurement exercise is not being undertaken by the Procurement Team, it is the responsibility of the individual undertaking the procurement to ensure all of these rules are followed.
The next planned communication covers the standstill period. If anyone has any areas they would particularly like covered or has any feedback on this guidance note please let me know.