Procurement in a nutshell – below-threshold procurements
20th February, 2015
In this Procurement in a Nutshell update we will be looking at the finalised below-threshold regime under the now published Public Contract Regulations 2015.
The regulations are available in full here.
What’s New?
Commencement
Regulations 110 and 112 come into force on:
- 26 February 2015 for authorities who perform their functions on behalf of the Crown; and
- 1 April 2015 for other Contracting Authorities.
Otherwise, the below-threshold regime comes into force on 26 February 2015.
Application of the Below-Threshold Regime
As with the draft regulations, under regulation 109, procurements that are:
- Above £10,000 (central government authorities); or
- Above £25,000 (sub-central contracting authorities or NHS Trust)
but below the threshold amounts set out at regulation 5 are caught by the new below-threshold regime (although the procurement of health care services for the purposes of the NHS (within the meaning and scope of the NHS (Patient Choice and Competition) (No 2) Regulations 2013) are excluded from this regime).
Where the rules on below-threshold procurements do apply, Part 4, Chapter 8 sets out the requirements (regs 109-112).
Please note regulations 110 and 112 (described below) do not apply to maintained schools or academies.
Advertising opportunities on Contract Finder (Regulation 110)
Regulation 110 only applies where a Contracting Authority (CA) chooses to advertise a below-threshold contract award opportunity. Where it does so:
- The CA must publish the information on Contracts Finder, regardless of any other means used to advertise it (reg 110(2)), and it can choose to publish it on Contracts Finder even if it doesn’t advertise it in any other way (reg 110(4));
- It must do so within 24 hours of advertising in any other way (reg 110(3));
- Certain information must be included in the advertisement and the information has to be available for a sufficient period of time for interested economic operators to become aware of it (regs 110(8) – (10));
- The CA must by means of the internet, offer unrestricted, full, direct and free access to all contract documents for all contracts advertised on Contracts Finder (reg 110(12)).
Regulations 110(5) and 110(6) assist CAs in working out when these obligations apply:
- Reg 110(5) explains when a CA will be “advertising an opportunity,” namely if it does anything to put the opportunity in the public domain or to bring the opportunity to the attention of economic operators generally (or a class of them) with a view to receiving responses.
- Reg 110(6) defines a “contract award opportunity” as the opportunity to be awarded a public contract by a CA, regardless of how specific the opportunity is. This means that PINs used under Part 2 as a call for competition amount to advertising even if specific contracts are not identified individually in that advertising. However, if a CA merely approaches 3 potential suppliers for quotes, that probably doesn’t amount to “advertising an opportunity.”
Assessing Suitability – (Regulation 111)
There is a prohibition on using a prequalification stage for all procurements that are under £111,676 (for central government) and £172,514 (for subcentral contracting authorities)
Advertising information about contracts awarded on Contract Finder (Regulation 112)
Certain minimum details of any contracts awarded must also be published on Contracts Finder
Other considerations
- The Regulations still provide that the validity of awarded contracts should not be affected by failure to comply with below-threshold requirements, although this regulation had been moved to 114(1).
- Presumably regulation 18 (openness, fairness and transparency) still applies (as caught by general Treaty principles) but it is not specifically referred to in this Part.
- The remedies set out in the Regulations do not apply.
Why is it important?
CAs must be aware of the circumstances in which they must advertise an opportunity on Contracts Finder and must stop using a PQQ for low value tenders.
There should be a thorough review of all standing orders and procurement processes to ensure that these new requirements are complied with from 26 February 2015.
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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