Reviewed by PLC Public Sector in July 2011.
A quick guide to the obligations imposed on public bodies by the public procurement regime and the remedies available to a supplier of goods or services if a public body fails to comply.
This is one of a series of quick guides, see Quick guides.
Public procurement is the purchase of goods, works or services by Government and other public bodies. In order to ensure the free movement of goods and services, the EU issued a series of public procurement directives to provide that:
The EU directives have been implemented in England and Wales by regulations for public contracts (the Regulations) and separate, but similar, regulations for utilities contracts. Scotland has also adopted regulations, which are in much the same form.
In addition, the Government Procurement Agreement (GPA) of the World Trade Organisation (www.practicallaw.com/1-107-7521) gives non-EU suppliers based in GPA signatory countries the right to compete on equal terms for many public contracts awarded within the EU.
The definition of contracting authorities includes:
The Regulations only apply to contracts that are in writing and for consideration (whatever the nature of the consideration). The Regulations may also apply, if an existing contract is renewed or extended on different terms or there are material changes to an existing contract.
Contracts for services that are listed as "Part B" services in the Regulations are largely excluded from the procurement regime and only limited rules apply. However, any contract that may interest providers from a different member state will have to comply with EC Treaty (www.practicallaw.com/2-107-6192) principles. Therefore, procurement processes must be transparent. As a minimum, this will mean that contract opportunities will need to be advertised. All procurements will also need to comply with Government requirements to obtain value-for-money.
For more information on what services are classified as Part B, and the obligations that apply when letting a Part B services contract, see Practice note, Part B, below threshold and other procurements outside the regulations (www.practicallaw.com/6-384-1798).
The Regulations do not apply, if a proposed contract:
Even if it falls outside the scope of the Regulations, any contract that may interest providers from a different member state will still have to comply with EC Treaty principles. (see Practice note, Part B, below threshold and other procurements outside the regulations: If there is likely to be a cross-border interest the provisions of the EC Treaty will apply (www.practicallaw.com/6-384-1798)).
In most cases, the contracting authority must publish a notice (known as an OJEU or contract notice (www.practicallaw.com/9-385-1432)) in the Official Journal of the European Union (www.practicallaw.com/7-385-1433) (OJEU). The notice must be in a standard form, which is available on the EU's SIMAP website (www.practicallaw.com/3-384-2129).
Minimum time limits apply to the various phases of each procedure. The open procedure provides for a one stage procurement, while the other procedures have a short-listing (selection) stage prior to tenders being submitted. Contracting authorities must:
Apply certain selection criteria to choose suppliers to tender.
Apply certain award criteria to assess tenders.
Disclose details of these criteria to the tenderers.
Various reporting and debrief requirements apply to contracts falling within the scope of the Regulations. The most important is that after a contracting authority has made its decision to award a contract, it must send out a notice (known as an Alcatel letter (www.practicallaw.com/4-385-1378)) to everyone involved in the tender process. The contracting authority must then allow a standstill period (www.practicallaw.com/9-385-1366) between the notice being sent out and the contract being entered into. The precise nature of the obligations of the contracting authority will depend on whether the public procurement was commenced before or after 20 December 2009, when a new legislation affecting the debrief requirements came into force. For full details of the applicable obligations, see Practice note, Remedies Directive: the new regime: The standstill period (www.practicallaw.com/0-500-9991).
Compliance with the public procurement rules is a duty owed by contracting authorities to suppliers from member states (www.practicallaw.com/1-107-6833). A supplier harmed as a result of a breach may bring proceedings under the Regulations.
If proceedings are brought, the court can take interim measures to suspend an award procedure. If the court is satisfied that there has been a breach of the Regulations, it can either order a decision to be set aside or award damages for the loss of opportunity. If a procurement was started before 20 December 2009, the court cannot order any remedy other than an award of damages if the contract has already been entered into. However, following the implementation of the a new Remedies Directive, for procurements that started on or after 20 December 2009, courts will be able to declare contracts that do not comply with the Regulations ineffective in certain circumstances. For more information, see Practice note, Remedies Directive: the new regime: Ineffectiveness (www.practicallaw.com/0-500-9991).
The European Commission can also take action against the Government for any breach of the procurement regime by a contracting authority in the UK.
The following public procurement resources are available: