Implementation of the Public Procurement Directives in the UK Peter Bennett

1. Implementation of the Public Procurement Directives in the UK Peter Bennett Office of Government Commerce Vilnius 9 December 2004

2. PROCUREMENT POLICY UNIT (OGC) DOMESTIC VFM POLICY EC AND INTERNATIONAL DEVELOPMENTS APPLICATION of EC RULES • Ensuring value for money (vfm) policy is understood and applied • Working with OGDs to ensure that pursuit of other objectives through pp does not undermine vfm eg fairtrade, race relations, sustainable development • Developing policy eg on remedies • Handling UK infraction cases • Advice on what the rules say …. • eg thresholds, procedures • ….and what they mean. • eg can you include incumbents in a new bid team? Can you exclude offshore companies • Representing the UK:- • - negotiating new rules eg two revised EC Directives • influencing the development of EC Commission policy, and EC line in WTO • - “margins” work influencing other WTO members EUROPEAN PUBLIC PROCUREMENT NETWORK PPN = cross border, pre-contract problem solving network with a best practice dimension

3. UK Domestic Policy • Requires all purchases of goods and services to be based on value for money, having due regard to propriety and regularity • Requires all purchases of goods and services to be based on value for money, having due regard to propriety and regularity (Value for money = "the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer's requirement“)

4. Policy and law • Directives and Treaty complement UK policy • No UK law before implementation of Single Market Programme, early 1990s • Directives implemented by Regulations (Statutory Instruments) under section 2(2) of the European Communities Act 1972 • 4 basic Regulations, each of which show how remedies can be sought • References on OGC web site (www.ogc.gov.uk) and link to text of regulations

5. THE LEGISLATIVE PACKAGE: KEY DATES 1996 – Green paper 1998 - Communication May 2000 – Legislative package January 2002 – European Parliament (EP): 1st reading March 2003 – common position: public sector & utilities July 2003 – EP second reading - amendments adopted December 2003 – agreement on conciliation text March 2004 – adoption of 2004/17/EC & 2004/18/EC (public sector)

6. Aim of legislative package • Simplify - 1 public sector directive • Clarify - use of frameworks - central purchasing bodies • Bring up-to-date - electronic methods - introduces competitive dialogue procedure - takes account of liberalisation in utilities

7. UK implementation . Member States have 21 months from date of OJEU publication – 30 April 2004 • UK implementation likely to require full 21 months • Process set out in implementation plan • 2 rounds of consultation planned • Aim to copy out as much as possible • Helpful that many of the basic provisions remain substantially the same as in the existing Directives

8. First consultation • Consultation documents for public sector and utilities circulated May 2004, allowing 3 months for comment • PPU wanted to know : - do consultees want us to make use of options - reactions to our suggested approach on reserved contracts & mandatory exclusions - responses sought on particular issues, such as the need to elaborate where text is difficult to understand

9. ‘Optional’ issues • Central purchasing bodies (cpbs) • Competitive dialogue • Framework agreements • Dynamic purchasing systems • E-auctions • Can utilities themselves apply for exclusion

10. Outcome of consultation • 255 responses, mostly on reserved contracts • many covered both public sector & utilities, only 9 concerned just the utilities • general support for making maximum use of options • numerous requests for specific guidance

11. Outcome of consultation (2) - CPBs – fully implement, but many questions • competitive dialogue – stick to text, need for guidance • frameworks – guidance good, new Article helpful • DPS – need for clarification & guidance • e-auctions – welcome article, need for guidance

12. Outcome of consultation (3) • On issues just concerning the Utilities, the majority agreed that: • the structure of the UK Regulations indicating scope & coverage should be maintained, • the text of the affiliated undertakings provision was sufficiently clear for it to be copied out, and • Utilities should be allowed to apply for exclusion direct.

13. Next steps & other activity Regulations will be drafted A further round of consultation will take place Regulations will be finalised & put in place by January 2006 Training module on the new Directives is on the OGC website