A Quick Guide to EU Procurement Rules

As a public sector body Thanet District Council is subject to the European Union (EU) Procurement Directives, which set out a legal framework for public procurement, the purpose of which is to open up the public procurement market and to ensure free movement of goods and services within the EU. The overriding principles of the European Treaty and to ensure compliance in letting contracts include: Equality of Treatment, Non-discrimination and Transparency.

Revised Regulations

The procurement directives were implemented into UK national law by revised Regulations on

1st January 2010.

Public authorities: (State, Regional and Local Authorities and other Public Bodies). The Public Contracts Regulations 2006 (S1 2006 No 5) and Public Contracts (Amendment) Regulations 2009 (SI 2009 No 2992). These regulations replace the previously separate Supply, Works and Services Regulations.

Utilities: (Certain Operators in the Water, Energy, Transport and Telecommunications Sectors).  The Utilities Contracts Regulations 2006 (S1 2006 No 6).

The Directives cover Supplies, Services and Works

The current financial thresholds are valid from 1st January 2012. (They are reviewed biennially). Value is based on a likely spend for that requirement over 4 years or 48 months:

Supplies: - £173,934

Services: - £173,934

Works: - £4,348,350

How do you know if your tender falls within the directives?

• Multiply an annual cost by 4
• Multiply a monthly cost by 48.

When undertaking initial scoping of likely spend, it is recommended that some leeway on value is given of +10% to minimise the risk of outcome spend exceeding threshold.

There are four procedures:

Open – anybody who responds must be invited to tender.

This is used where there are a limited number of suppliers or you do not know the market you are dealing with.

Restricted – we can limit those invited to bid to between 5 – 20

This is used where there are many suppliers as in the case of stationery companies and you wish to restrict the number of companies you invite to tender.

Negotiated – this procedure is used where there are a very limited number of suppliers for the product or service as in the case of some software packages.

Accelerated – allows access to greatly reduced timescales

This is used when something happens beyond your control i.e. a fire.

The fact that you ‘forgot’ to tender is not a sufficient reason to use this procedure.

Timetable for the Issue of Notices

When planning a project please bear in mind that an EU tender can take up to six months from start to finish. The steps and timescales that follow are fixed. The additional time is needed to evaluate the Expressions of Interest; conduct Supplier Appraisal including financial issues; conduct site visits; allow presentations; tender evaluation; take up references etc.

* When a supplier requests the contract documents, these must be despatched within 6 calendar days (works and services) or 4 working days (supplies).

NB. Tender periods in the open procedure and requests to participate in other procedures may be shortened by seven days when notices are submitted for publication in the format required for submission via the myTenders, see Advertising.

Tender periods in the open and restricted procedures may be shortened by five days when unrestricted electronic access is provided to all tender documentation i.e. documentation made available on Council’s website: www.thanet.gov.uk

Stages in the procurement process

Specification

Requirements must be specified, avoiding brand names and other references, which would have the effect of favouring or eliminating particular providers, products or services. The Regulations now make it clear that authorities may use performance specifications rather than technical specifications. They also provide clarification on the scope to reflect environmental issues in specifications.

Selection

Rejection or selection of candidates based on:

• Evidence that they are not unsuitable on certain grounds, eg of bankruptcy, criminal conviction or failure to pay taxes. NB Certain offences now require, in normal circumstances, a mandatory exclusion;
• Economic and financial standing e.g. that they are judged to be financially sound on the basis of their annual accounts;
• Technical capacity, e.g. that they will be adequately equipped to do the job and that their track record is satisfactory.

Award

The award of contracts is either on the basis of ‘lowest price’ or various criteria for determining which offer is ‘the most economically advantageous’ to the purchaser. Government Policy is to use the latter criterion. This is in keeping with the Government’s Procurement Policy that all public procurement must be based on Value for Money (defined as the optimum combination of whole-life cost and quality to meet the user’s requirement).

Mandatory 10 day standstill period from award of contract

Contracting authorities must inform any economic operator (i.e. supplier, contractor or service provider) that has submitted an offer, of its decision in relation to the award of the contract; or the conclusion of a framework agreement.

With the implementation of the Remedies Directive (Dec 2009) there is no longer a requirement to notify candidates who were excluded or who were not selected at pre-qualification stage provided they were appropriately notified at de-selection.

Notice must be sent to notify tenderers (candidates not appropriately notified at de-selection) of its decision as soon as possible following decision to award. The notice must be in writing, be by the most rapid means of communication practicable and must include

• Award criteria
• Reason for decision including the characteristics and relative advantages of the successful bidder
• The score obtained by the economic operator to whom the authority is writing to and the score and name of the economic operator to whom it is intended to award. 
• Any reasons why the economic operator did not meet technical specification requirements (where relevant)
• A precise statement of standstill period duration and date before which the contracting authority will not enter the contract.

The contracting authority must allow at least 10 days between the date of despatch of this information (notification of award), and the date on which it proposes to enter into the contract, or conclude the framework agreement.

Request for debrief

An economic operator that has been sent a notice of award may request an accelerated debrief, provided it is received by a contracting authority, in writing, by midnight of the second working day of the standstill period. The contracting authority must provide this information at least 3 full working days before the end of the

standstill period. Where this is not possible, the standstill period must be extended to allow at least 3 working days between the provision of the feedback, and the date at which the contracting authority proposes to enter into the contract. If a request for feedback is received outside of the accelerated time limit, a contracting authority must provide a debrief within 15 days of receipt of the request. There is no need to extend the standstill period in these circumstances.

Contract Award Notices

These must be issued within 48 days of the award of contract, no matter which Directive or Procedure has been used. A contract award notice may have to be issued even if the contract itself was not advertised under the EU Directives, this is necessary if the goods/services are classed as ‘residual’.

PIN - Prior Indicative Notice

Forward planning will allow the placement of a PIN in the journal and shorten the timescales. 52 days must elapse between the publication of the PIN and placing the advert. The Directive formalises case law regarding PIN notices. Article 35(1) makes it clear that these are only compulsory where the purchaser wishes to take advantage of the reduction in timescales that are available with their publication.

Advertising

The Official Journal of the European Union is where the advert for your project will be placed by completing details on line at http://www.mytenders.co.uk/default.aspx which must be undertaken by a member of the Procurement Team as TDC has its own workspace on the site.

Thanet District Council opportunities should also be posted on TDC and SECE Business Portal website and other publications as deemed necessary (e.g the national press, a trade magazine etc).  However, you must not:

• send your advert to the other publication(s) before you send your advert to OJEU. Note: you do not have to await the publication of the OJEU advert, your obligation is to ensure that the OJEU advert is despatched before any other advert.
• provide information or detail in the other advert(s) that does not appear in the OJEU advert.

Further Information

Full details of EU Directives can be found at The Office of Government Commerce’s (OGC) website: http://www.ogc.gov.uk/ in the Procurement Policy and EU Rules section.

Remember:

This guidance has been produced by the Procurement section to provide assistance only. This does not negate the need for individuals to consult Financial and Legal services as stipulated in the Council's Financial Regulations and Contract Standing Orders.  Other professional advice should be sought as may be deemed appropriate.

E-mail: contracts@thanet.gov.uk

Tel: 01843 577111