Regulated Procurement: What do you need to know about the new Utilities Contracts and Concessions Contracts Regulations?

Following the coming into force of the Public Contracts Regulations 2015 (PCR 2015) in February, the Government has now published drafts of two further sets of regulations, the Utilities Contracts Regulations 2016 (UCR 2016) and Concession Contracts Regulations 2016 (CCR 2016), which will implement
the respective EU Directives for each regime.

The UCR 2016: Evolution, not revolution

The UCR 2016 represent an evolution from the current 2006 Regulations.  Among the key areas of change under the draft UCR 2016 are: 

• the extent to which contracts are permitted to be varied; and
• when utilities which operate under “special and exclusive rights” will be caught by the regulations.

The CCR 2016: A new regime with a familiar feel

The CCR 2016 is a totally new piece of law.  Public bodies use concession contract to engage private sector suppliers to supply services or perform works, with the key feature in those contracts being private firms bearing a substantial
part of the economic risk from executing the contract.  Some examples are
contracts to build and operate public sports facilities or toll roads. 

Previously, the awarding of service concessions in particular was not subject to specific rules, and the EU Commission considered that in many member states, the awarding of concessions was not always subject to sufficient advertising and fair competition.  The CCR 2016 will fill this gap by putting in place
specific rules for concessions.  Having a harmonised legal framework for
the award of concessions across the EU is an attempt to ensure that all
economic players have effective and non-discriminatory access to the EU
market. 

What will happen next?

Although both sets of Regulations have been published as drafts for consultation, we do not expect either to change substantively.  We anticipate they will come into force in early 2016.  If you contract with the public sector or utilities, or think you may be caught under one or both of these regimes, now is the time to prepare for the changes that are coming.