Procurement in a nutshell – The Public Procurement (Amendments, Repeals and Revocations) Regulations 2016
11th April, 2016
On 18 March 2016, the Procurement (Amendments, Repeals and Revocations) Regulations 2016 (SI 2016/275) were published.
These regulations will come into force on 18 April 2016, and make various amendments to several pieces of legislation but particularly to the Public Contracts Regulations 2015 (PCR 2015) relating to the transposition of the 2014 EU public procurement Directives.
One significant amendment is the one made to regulation 72(1)(b) which deals with modification of contracts during their term. It is amended at the end of the paragraph (i) by substituting “and” for “or” and now states: “for additional works, services or supplies by the original contractor that have become necessary and were not included in the initial procurement, where a change of contractor
- cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement, and
- would cause significant inconvenience or substantial duplication of costs for the contracting authority,
provided that any increase in price does not exceed 50% of the value of the original contract.”
This change has the effect of making both justificatory limbs a requirement for the exemption to be met i.e. to fall within the exemption you need to demonstrate that additional works/services/supplies are required, the value of the change is less than 50% and that the contractor cannot be changed because (1) there are economic and technical reasons AND (2) changing the contractor would cause significant inconvenience or substantial duplication of costs.
The justification for this is that change reflects the Directive’s drafting.
Why is this important?
The result of the change to Regulation 72 is that Contracting Authorities should take a cautious approach when considering any variations. If all limbs of the test are not met, Contracting Authorities will not be able to rely on the provision. Contracting Authorities and bidders need to be aware of the other amendments.
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.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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