Procurement In A Nutshell – Government response to the Utilities Contract Regulations 2016

For further details on the draft regulations, please click here for our Procurement in a Nutshell from 14th September 2015.

For the full Government response to the Utilities Contract Regulations, published by the Cabinet Office please click here.

What’s new?

The consultation process

The consultations on the draft Utilities Contract Regulations 2016 were published on 21 August 2015 and closed on 18 September 2015. A link to the consultation documents was provided to a number of known stakeholders and was also made available online on GOV.UK

Twelve responses were received from the following category of respondents; Business, Devolved Administrations, Legal, Local Government, Utility.

The respondents raised the following points:

• The ‘copy-out approach;’ whilst some favoured this, others suggested that such an approach prevented the possibility of clarification.
• It was highlighted that there was no comprehensive list of the utilities. Others suggested that no list would be required as it would need to be updated.
• Concerns were raised in relation to the consistency between the transitional provisions in the PCR 2015 and CCS Guidance regarding contract modifications and requested legal certainty on this issue in any corresponding provisions in the Utilities Contracts Regulations 2016.

For full details of the comments raised, please click here.

The Government’s response

This Government response follows on from the consultation on UK transposition of Directive 2014/25/EU1 on procurement, by entities operating in the water, energy, transport and postal services sectors.

The main points are:

• Directive 2014/25/EU1 will replace Directive 2004/17/EC for Utilities Contracts.
• These regulations will be important to any Contracting Authorities or Utilities. The change and clarification of the definitions mean that entities will have to scrutinise the regulations to see whether they and their activities are covered by the regulations.
• The UK and other EU Member States have until 18 April 2016 to transpose the Directives in national implementing regulations.
• Following discussions with the Scottish Government, the Government decided to maintain the territorial approach, which currently applies under the Utilities Contracts Regulations 2006, so the new Regulations will not extend to Scotland. The Scottish Government intends to make corresponding provisions in their regulations.

In response to the comments made during the consultation process, the Government made the following points:

• A copy out approach has been adopted which is partly the reason for not adding a comprehensive list of utilities. They assured that there is already a substantial body of guidance available and reiterated the comments received that such a list would need to be regularly updated.
• The position on when the rules on contract modifications come into force has been set out in the guidance on amendments to contracts during their term. For further information on this guidance, please click here.

Other information

The new Directives make an important contribution to the Government’s strategy for growth, which frees the public procurement market through simpler and flexible procurement rules. This in turn will cut red tape and assist UK companies make the most of the EU’s single market.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.