Procurement in a Nutshell – The New Year Nutshell
12th January 2018
With 2017 behind us, we thought it would be useful to look back at some of our favourite 'must-read' Nutshells which have been published over the past year.
As such, we will focus on various notable procurement updates which have been published throughout 2017 covering:
- Case law; and
If you have any queries on any of the aspects of procurement mentioned below, or you have any other general procurement issues, please contact us via our procurement hotline on 0191 204 4464.
The UK’s decision to leave the EU is particularly relevant to organisations involved in procurement processes particularly when considering the European influence on, and the European dimension to, the UK’s procurement rules.
However, despite the high levels of publicity following the invocation of Article 50 and the commencement of the two-year negotiation period, it is highly likely that there will be uncertainty as to the post-Brexit outlook until a final settlement agreement is formalised.
Nonetheless, various position papers have been published on the subject and in September Ward Hadaway published a Nutshell analysing the European Commission’s Position Paper on Public Procurement.
On the basis of this, it appears that when the UK leaves the EU, any ongoing public contracts will still be protected until completion – meaning that interested parties are less likely to be subject to Brexit associated risk. Accordingly, those involved should feel somewhat reassured that their interests will remain secure at the departure date.
Consequently, the paper has gone some way to providing a degree of certainty to interested parties and has somewhat redressed what was a previously unclear aspect of law.
The High Court provided guidance on the ability of non-economic operators to bring procurement challenges by way of judicial review. The court held that non-economic operators can only claim judicial review where they can show that performance of the competitive tendering obligation might have led to a different outcome, which would have had a direct impact upon that operator. On the facts, the court held the claimants, who were five taxpayers unhappy about the grant of a development agreement for their town centre, came nowhere near to satisfying this test.
Sysmex, an unsuccessful bidder, challenged the lengthy nature of a procurement process on a number of allegations. Consequently, issuing these proceedings meant there was an automatic suspension and the Trust was unable to enter into the contract with the successful bidder – subsequently the Trust applied for the suspension to be lifted. When considering whether the suspension could be lifted, the court paid particular attention to looking at whether damages would be an adequate remedy, they found that, on balance, the contract was not very prestigious and represented less than 10% of Sysmex’s annual turnover. As such, there was no good evidence of damage to reputation or of wider losses. The court found there was overwhelming evidence demonstrating that the public interest favoured lifting the suspension and ordered it to be lifted.
In this Lithuanian case, she CJEU considered the boundaries of public procurement obligations for entities under the control of a Contracting Authority. The subsidiary in question was established and wholly owned by the Contracting Authority. The CJEU held that the subsidiary’s activities consisted primarily of meeting needs in the general interest for the parent Contracting Authority and they must be regarded as a ‘body governed by public law’ and therefore subject to the ordinary public procurement rules. Any other subsidiary that satisfies this test will also be subject to the ordinary rules of public procurement.
The European Free Trade Association Court ruled, in a case concerning a Norwegian procurement for ferry services, that a simple breach of procurement law is sufficient to trigger liability; there is no requirement for a Contracting Authority to reach the “sufficiently serious” threshold, a decision which is in contrast to that of the EU and the UK Supreme Court decision of EnergySolutions v NDA.
As mentioned above, this year the European Commission (EC) published its position paper on the future of procurement procedures after the UK has left the EU. It has secured the EU protection for public procurement contracts ongoing on withdrawal date.
The paper sets out three key principles:
- Administration – EU administrative procedures should continue to apply for any contracts started before the UK’s withdrawal date from the EU.
- Non-discrimination – UK Contracting Authorities should continue to comply with the core EU principle of non-discrimination.
- Review procedures and legal remedies – The existing review procedures and legal remedies should remain available to the procedures and framework agreements which continue after the date of withdrawal.
The CCS reissued its procurement policy in December, for the procurement of supplies, services and works for the public sector. It highlights that UK procurement is still subject to the EU Treaty principles and that the over-riding requirement of public procurement frameworks is to guarantee value for money whilst achieving the best mix of quality and effectiveness.
The CCS sets out a range of policies which all central government buyers must implement, including: Procurement policies for value for money and savings, Procurement policies for the conduct of procurements, Procurement policies in support of enterprise and growth and Procurement policies for promoting greater transparency as well as a range of others.
PPN 03/17 – Changes to Data Protection Legislation & General Data Protection Regulation
This CCS policy note explains how government buyers should bring existing and future commercial arrangements concerning data processing into line with new Data Protection Legislation, which can be viewed here.
PPN 04/17 – New Threshold Levels 2018
At the end of December, The CCS released their new threshold levels for procurement, these came into force on 1 January 2018, details of which can be found in our latest update, here.
We hope you have enjoyed the 2017 series of Nutshells, we will continue to wait in anticipation for what 2018 has in store for procurement, there is no doubt that case law and guidance will be plentiful, particularly with Brexit looming ahead of us and the need for clarity on our procurement processes once we have left the EU.
In the coming year there is also likely to be a big focus on GDPR as we try to tackle the impact of this legislation and a further push for more digitisation both in our procurement processes and a rise in the digital goods and services being procured.
Throughout 2018 we will continue to provide you with a round up on all the topical and relevant procurement updates and developments.
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.