“The entry into force of the Utilities Contracts Regulations 2016 and Concession Contracts Regulations 2016 (together with their Scottish counterparts) on 18 April 2016 completed the biggest modification of UK procurement law in a decade.
On the longer-term horizon, contracting authorities, utilities and central purchasing bodies need to complete their move to fully electronic procurement, and suppliers will have to be ready to embrace electronic procurement systems, from April 2017.”
Catherine Wolfenden, Partner, Osborne Clarke
18 April 2016 – Utilities Contracts Regulations 2016 (UCR 2016)
The UCR 2016, which refresh the rules around utility procurement, came into force on 18 April 2016.
Among the key areas of change under the draft UCR 2016 are:
- a new definition of a utility, including removal of the method of identification of utilities by list;
- codification of the rules on pre-procurement market engagement;
- removal of the distinction between Part A (fully regulated) and Part B (lightly regulated) services;
- limitation of the duration of framework agreements to eight years;
- introduction of a positive requirement for utilities to investigate abnormally low tenders; and
- limitations on the modification of contracts during their term (also referred to as material variation).
The thresholds above which the regulations apply, and the rights and remedies of bidders in the event that a utility is in breach, will remain unchanged under the UCR 2016.
Similar regulations applicable to Scotland – Utilities Contracts (Scotland) Regulations 2016 – came into force on the same day.
8 April 2016 – Concession Contracts Regulations 2016 (CCR 2016)
Wholesale codified regulation of concessions contracts is almost entirely new in UK law, with previous regulations applying only to works concession contracts.
The CCR 2016, which came into force on 18 April 2016:
- introduce codified regulation for procurement of public utility and concessions; and
- provide remedies for suppliers in the event that a utility or contracting authority fails to adhere to CCR 2016 in procuring a concession contract.
Similar regulations applicable to Scotland – The Concession Contracts (Scotland) Regulations 2016 – came into force on the same day.
18 April 2016 – “Light Touch” procurement regime
In place of the previous distinction between Part A and Part B services in the Public Contract Regulations (PCR) 2006, the PCR 2015 introduce a new “light-touch” procurement regime for social and other specific services, which applies to procurement exercises commenced from 18 April 2016.
The threshold for the light-touch regime is EUR 750,000. Where this regime applies, contracting authorities will have a high degree of choice in how they run tender exercises and the evaluation criteria that they can take into account when awarding contracts.
Q2 2016 – Energy Solutions v Nuclear Decommissioning Authority
Substantive judgment is expected soon in the much-anticipated case of Energy Solutions EU Limited v Nuclear Decommissioning Authority (NDA). Energy Solutions brought a damages-only claim against the NDA after expiry of the standstill period (the statutory period following the award of a contract, before the contract can be entered into, during which unsuccessful bidders may decide to challenge that award). On appeal on a preliminary issue, the Court of Appeal confirmed that issuing a claim within the standstill period was not a precondition to be able to bring a damages claim, and the case continued to trial.
If Energy Solutions is successful in its claim for breach of the Public Contracts Regulations 2006, the case will be a landmark decision in the award and quantification of damages in public procurement challenges.
Q2/Q3 2016 Enhancing transparency of beneficial ownership information of foreign companies
In March 2016, the Department of Business, Innovation and Skills (BIS) issued a discussion paper on enhancing the transparency of beneficial ownership information concerning foreign companies either purchasing property or bidding for public contracts in England.
BIS’ discussion paper (available here) sets out options under consideration by the government, which would require bidders for public contracts above £10m in value to declare fully their beneficial ownership or face exclusion from the procurement process.
The closing date for responses to the discussion paper was 1 April 2016. We are expecting BIS’s response later in 2016.
June 2016 Australian accession to the World Trade Organisation’s (WTO’s) Government Procurement Agreement (GPA)
Australia intends to complete its membership negotiations with the WTO and existing GPA members in 2016, following the launch of its bid to join the global agreement on access to public sector supply markets in June 2015.
As part of the deal proposed, Australia would open up a procurement market to GPA parties valued at over A$ 100 billion (US$ 71 billion) at the federal, state and local levels. Australian businesses would in return gain access to markets (and protection of their rights under relevant procurement legislation) in other GPA signatory states.
August 2016 – European Commission report on the EU Defence Procurement Directive
The European Commission is conducting a review of the operation of the Defence Procurement Directive 2009 and is due to report its findings to the European Parliament and Council of the EU in August 2016. This may be a precursor to a refresh of the Directive in line with the recent public and utilities sector Directives.
18 April 2017 – E-procurement: Central Purchasing Bodies (CPB)
Under PCR 2015 and UCR 2016, CPBs have until 18 April 2017 to implement fully electronic systems covering all documents and communications in their procurement processes.
18 October 2018 – E-procurement: contracting authorities and utilities
Following on from CPBs, contracting authorities and utilities have until 18 October 2018 to implement fully electronic systems covering all documents and communications in their procurement processes.