Transcript DfE Template (Arial) v1.0 April 2012

BESA Annual Conference
UK & EU Procurement Policy Update
(including the impact these changes will
make on how schools spend their money)
Jack Salter
Head of Commercial Policy
Department for Education
Wednesday 6 November 3.45 to 4.00
QE11 Conference Centre, London
Two main Topics
 New EU Directives / UK Public Contract Regulations
 Wider Public Sector Procurement Reform
Managing Public Money and European Union
Treaty requirements
Requirement is for public bodies to achieve value for
money and do so following EU Treaty principles of
transparency, proportionality equal treatment and nondiscrimination.
The competitive process:
 Helps ensure value for money
 Helps demonstrate Transparency.
 The EU Context
•
Current directives were made in 2004; implemented
by UK as Public Contracts Regulations 2006
• Many calls for change/simplification over the years,
including post financial crisis
• 4 legislative proposals by the European Commission
to update the existing EU rules regime:
Revised Directive on public procurement (“classic”)
Revised Directive on utilities procurement
New Directive on concessions contracts
New Regulation on access to/from 3rd country markets
(reciprocity)
4
New EU Public Procurement Directive Agreed
 The revised EU Public Procurement Directives were agreed
by the European Parliament and the Council on 26 June
2013
 The legislators strove to improve flexibility in the procurement
process for both the public and private sector while at the
same time giving greater importance to quality and
innovation.
• Directive requires transposition in Member States within 2
years of adoption at EU level, UK Cabinet Office Ministers
want to transpose early, to realise benefits quickly.
• Informal consultation in stages on policy choices and legal
drafting (August to January 2014).
• Formal consultation early 2014, anticipated UK law Aug 2014.
EU Directive Agreed – European Parliament Press Notice
 Core changes to the new directives include:
 ‘Most economically advantageous tender’ (MEAT) will
become the standard award criterion replacing lowest price.
This includes an emphasis on quality, environmental, social or
innovative characteristics, transparency in sub-contraction and
rules on abnormally low bids.
 Innovation partnerships: a new tool to issue a call for tenders
without specifying a product but a problem that needs to be
solved. This allow discussion and cooperation between public
and private sector.
 Tender documents eligible for EU-wide bidding will be made
available in all EU languages, and tenders from national
databases will have to be made available to eligible bidders.
“Light Touch” regime for Education & Social Services
 The new Regulations no longer differentiate between
Part A & Part B (local) services.
 At present for certain services there is no requirement to
advertise across Europe and follow the full detailed
procedures for certain services.
 However we have negotiated an exemption for
Education & Social Services (& Health) that enables us
to use a “light touch” regime for services under 750,000
Euros.
 The UK is required to put in place “appropriate
procedures” for the award of contracts under this
process in the UK Regulations, the Cabinet Office will be
sending out consultation after Xmas.
Main UK-inspired changes - Cabinet Office
• Temporary exemption for public service Mutuals
• Much simpler process of assessing bidders’ credentials:
 much greater use of supplier self-declarations
 only the winning bidder should have to submit various
certificates and documents to prove their status
• More freedom for buyers to negotiate with suppliers
• Legally exclude suppliers who have a poor track record
• Greatly simplified rules on Dynamic Purchasing Systems
20 June 2013
Main UK-inspired changes (cont’d)
• Expressly permit use of e-marketplaces for public
procurement.
• Reduced red-tape on suppliers’ response times.
• Legally binding commitment on Commission to review
financial thresholds.
• Take account of relevant skills and experience of
individuals when awarding contracts for consultants, etc.
• Improved rules on social and environmental aspects
Consultation on making wider public sector
procurement more accessible to SMEs

Gov has consulted on a range of measures to make public
procurement more accessible to SMEs.
 The reforms have been developed by the Cabinet Office,
Department for Business, Innovation and Skills, Department
for Communities and Local Government, the Home Office,
the Department of Health and Department for Education.
 A well reasoned response from BESA was received before
the closing date for responses of 16th October 2013.
Consultation on making wider public sector
procurement more accessible to SMEs
 With an annual spend of £230bn, public sector
procurement has the potential to create significant
business and growth opportunities through increased
participation for small and medium sized enterprises
(SMEs), as well as improving the public sector’s access
to SME’s creativity and innovation.

 SMEs are a crucial engine for growth: 99.9% of the UK’s
4.5 million businesses are SMEs; they are responsible
for over 14 million private sector jobs, and account for
almost half of the net growth over that period in jobs.
Consultation on making wider public sector
procurement more accessible to SMEs
 SMEs have historically been shut out of government
business and have found bidding for public sector
contracts excessively, and sometimes prohibitively,
bureaucratic, time-consuming and expensive.
 Since 2010 there has been considerable progress in
central government and many other parts of the public
sector in opening up the procurement process to SMEs.
For example, Pre-Qualification Questionnaires (PQQs)
have been removed for almost all central government
contracts below £100,000, and the proportion of central
government spend with SMEs on goods and services is
increasing.
Consultation on making wider public sector
procurement more accessible to SMEs
 Government recognises that much more needs to be
done. Building on Lord Young’s report of May 2013, in
which he advocated recommended developing a set of
“single market” principles to be applied by all public
bodies in their procurement
 Government now wishes to implement, potentially
through legislation, a simple and consistent approach to
procurement across all public sector authorities so that
SMEs can gain better and more direct access.
Consultation on making public sector
procurement more accessible to SMEs
 These principles should simplify and standardise the
advertising, bidding and payment of public contracts, and
should remove the complexity, cost and inconsistency
when trying to sell to more than one public sector body.
 They would apply to businesses as direct contractors
with government and as sub-contractors or partners in a
procurement supply chain.
Consultation on making Wider public sector
procurement more accessible to SMEs
 Summary of proposed reforms
 Pre-Qualification: eliminating the use of PQQs for low value
contracts, mandating a core PQQ with standard questions for
high value contracts, and allowing suppliers to provide PQQ
data only once.
 Transparency: ensuring all new contract opportunities and
contract awards are advertised online and the public sector
reports its performance on spend with SMEs and centrally
negotiated deals (Proposal is that schools are exempt).
 Payment and finance: ensuring contractors pay their
suppliers on time; use of performance bonds, and
encouraging the use of e-invoicing in the public sector.
Public Service (Social Value) Act
 This new Act requires contracting authorities to consider
at the pre-procurement stage : How what is proposed to be procured may improve the
economic, social and environmental well-being of their
areas.
 How the contracting authority may act with a view to
securing that improvement in conducting the process of
procurement.
 In addition, the contracting authority would be required to
consider whether to undertake any community
consultation on the above matters.
Contacts
Jack Salter - Commercial Policy
 [email protected]
 0114 274 2173 Mobile 0777 541 3122