...your guide to winning contracts

8 April 2010 - Will public sector procurement become more transparent?

In December 2009 the EU Remedies Directive came into force in the UK - the Public Contracts (Amendments) Regulations 2009, different but similar rules apply to Scotland. The aim of the 2009 regulations is to make public sector procurement more transparent and prevent public authorities from breaking the rules.

I’m sure many companies, especially smaller public sector suppliers, welcome anything that achieves more transparency, but only time will tell how effective the new rules are.

As implied by the name, there are now more remedies to deal with ‘contracting authorities’ that break the rules. They end illegal direct awards that are above the OJEU thresholds, so one authority can on longer just let a contract to another authority without due process.

If the rules are broken a contract can be set aside, so the new rules affect the company winning the contract as well as any company that feels it lost out due to malpractice.

Penalties include fines, an order to rectify defects in the procurement process and contract shortening. The redress for a company that suffers as a result of an ineffective (illegal) contract is proportional to the contract i.e. it may be an amount equal to their profits had they won the contact.

There is a new ‘stand-still’ period of 10-15 days (10 for email notifications, 15 for letters) between the notification of a successful bidder and the actual entering into a contract. The stand-still period is to allow time for a dissatisfied party to request a debrief, or challenge the decision of the contracting party, before a contract is entered into.
Material variations to a contact will now require a re-tender even if the variation is a price reductions by the supplier.

The new regulations only apply to contacts where the procurement process began after 20 December 2009 when the new regulations came into force.

The above is a brief summary of the new regulation as written up from my notes during a presentation at the Procurex national conference in March 2010. You should seek legal advice or expert opinion if it is important to you to understand the full implications of the new regulations.