south west employers
DESCRIPTION
South West Employers. Legal Aspects & EU Procurement. Trainer:. Date:. Activity 1 - Icebreaker. How many points do you have? _______. One unusual fact I have found out about someone here is? ____________________________ (5 points). Activity 2 - Groundrules. - PowerPoint PPT PresentationTRANSCRIPT
South West Employers
Legal Aspects & EU Procurement
Trainer: Date:
Activity 1 - Icebreaker
Is a middle child
(1 point)
Likes to eat Japanese food
(1 point)
Is wearing pink
(1 point)
Plays a team sport
(1 point)
Speaks another language
(1 point)
Wears glasses
(1 point)
Is over 6’ tall
(1 point)
Has less than four letters in his/her
first name
(1 point)
Has a last name that starts with a W
(1 point)
Has green eyes
(1 point)
Owns a Vauxhall car
(2 points)
Likes classical music
(2 points)
Preferred Maths to English in school
(2 points)
Knows someone famous
(2 points)
Has red hair
(2 points)
Has more than 2 children
(3 points)
Has made a parachute jump
(3 points)
Has visited more than 10 countries
(3 points)
Has more than 7 letters in his/her
first name.
(3 points)
Has a birthday in the same month as me
(3 points)
One unusual fact I have found out about someone here is? ____________________________ (5 points)
How many points do you have? _______
Activity 2 - Groundrules
Groundrules help to create a positive and safe learning environment. Discuss and agree a list of between 3 and 5 rules that all participants are comfortable with
Objectives
At the end of the session, participants will have knowledge and an understanding of:
Some of the key legal and procedural requirements of the EU public procurement directives
Public Contracts directive:
• Application of threshold values and competition requirements
• Procurement routes: tenders, frameworks and negotiated approaches
• Best practice tendering
• Legal challenges and implications for public procurers
• Selection and Award
Remedies directive:
• ‘Alcatel’ and managing challenges
Freedom of Information Act and transparency
Sections
1. Legal framework and thresholds
2. EU procurement procedures
3. Legal challenges and implications
4. Tendering practice
What is procurement?“ . . . process of acquiring supplies, works and services, covering acquisition from
both third parties and in-house providers. The process spans the whole cycle from identification of needs, through to the end of a service contract or the end of the
useful life of an asset”
Planning
Enquiry
Implement
Define & review need
Define & review need
Develop specification
Develop specification
Determine procurement strategy
Determine procurement strategy
InviteInvite
Pre-qualify suppliers
Pre-qualify suppliers
Issue RFQ or ITT
Issue RFQ or ITT
Evaluate tenders
Evaluate tenders
Negotiate?Negotiate?
Contract award
Contract award
Manage implementation and transition
Manage implementation and transition
Manage contract performance
Manage contract performance
Exit & termination
Exit & termination Includes:
• Revenue expenditure
• Capital expenditure
• Strategic commissioning
• Acquiring third sector services
• Grant-funded opportunities
• Collaboration with others
Regulations & governance
EC Treaty (Recital 9)
EU Consolidated Directive 2004/18/EC
Public Contracts Regulations 2006 (A)
Your local Contract Procedure Rules
Competition Act – a more generic law
These rules and regulations are enforced with statutory powers and there would be specific legal ramifications in our failure to comply.
The recent growth in legal claims and challenges – combined with an evolving backdrop of legislation and case law – places increasing responsibility on all public
officers to ensure adherence to procedure and due process
Key principles:
• Equal treatment
• Non-discrimination
• Transparency
• Mutual recognition
• Proportionality
• Value for Money
Types of procurement
Supplies Corporate and operational expenditure (the supply of goods and commodities)
Services People and teams to plan, guide, advise, design, develop, consult, care, operate and provide services to your authority and its partners
Part A Services (primary)
Part B Services (residual)
Works Construction and commissioning of facilities, buildings, infrastructure and major capital assets
. . . same principles, same policies, similar procedures
Shared Services and collaboration
Trading between two independent public sector bodies (non-Crown) is also subject to the competition requirements of the Public Contracts Regulations
In-house service provision is exempt
Three key tests for ‘in-house’ provision:
• Structural dependence – do we have strategic ownership/control over the party?
• Economic dependence – is the other party wholly funded by us?
• No private sector participation
If explicitly set up as ‘central purchasing body’ such as OGC, then exemption may apply
EU Thresholds
As of 1 January 2010
Remember:rules of aggregation apply when estimating contract value
Goods and services = £156,442Works [projects] = £3,927,260
Aggregation rules
Apply to the total contract value, not simply an annual or monthly amount and including extensions
Ongoing requirements (supplies and services) require aggregation over minimum of 48 months
Either aggregate projected values over next 4 years
Or, take last 12 months’ expenditure and x 4
Need to aggregate total expenditure across an authority
Avoid disaggregation
Limiting contract length to reduce value below thresholds
Breaking up needs to multiple contracts, each below threshold
Considered breach of EU procurement directives
Activity 3 - Aggregation
Work in pairs or small groups and for each of the scenarios, identify the aggregated value of the contract opportunity and state whether this is above or below the relevant EU threshold
Sections
1. Legal framework and thresholds
2. EU procurement procedures
3. Legal challenges and implications
4. Tendering practice
EU procurement routes
EU procurement procedures
Open procedure
Restricted procedure
Framework agreement
Central purchasing
Bodies
Competitivedialogue
procedure
Dynamic purchasing
systems
Negotiatedprocedure
Acceleratedprocedure
Electronic auctions
Process overview – Open Tender
Publish PIN in OJEU (optional)
Manage tender clarifications
Debrief unsuccessful tenderers
Publish Contract Notice in OJEU
Award contract
Send out Invitation to Tender
Receive tenders
Evaluate tenders(exclusion and selection)
Mandatory standstill period
Publish Award Notice in OJEU
Receive Expressions of Interest
Min: 52 daysMax: 12 months
Min: 45 days40 days if hosted15 days with PIN
Min: 10 days
Max: 48 days
Max: 6 days
Process overview – Restricted Tender(assumes electronic submission)
Publish PIN in OJEU (optional)
Manage tender clarifications
Debrief unsuccessful tenderers
Publish Contract Notice in OJEU
Award contract
Send out Invitation to Tender
Receive tenders
Evaluate tenders
Mandatory standstill period
Publish Award Notice in OJEU
Receive Expressions of Interest
Min: 52 daysMax: 12 months
Min: 30 days
Min: 10 days
Max: 48 days
Max: 6 daysSend out PQQs
Receive completed PQQs
Evaluate to determine shortlist(exclusion and selection)
Min: 35 days30 days if hosted17 days with PIN
Framework Agreements Act as ‘call-off’ arrangement for 1, 3 or more suppliers
No commitment to specific volume – ideal where demand not really known
If pre-existing, considerable time/efficiency advantages – no full tender – however can be time-consuming to set up
Maximum length: 4 years
Examples: stationery, spares, consultancy
Examples of framework suppliers are Buying Solutions and Pro5
Risk that suppliers can consider the mini competitionas a ‘double tender’
Negotiated approach (single supplier) EU requires specific justification to use these
procedures
Specific limited circumstances: When all tenders have proven irregular/unacceptable No applications or tenders have been received Where artistic/technical rights are exclusively protected Extreme and unforeseeable urgency Goods for R&D or experimentation only Partial replacements of existing goods Raw material commodities from exchange markets Liquidation/bankruptcy conditions Design contests Specific relation to existing works
You should refer to your legal advisers for clarificationSome CPRs require prior written consent before negotiation is permitted
Services & works
Supplies
Services
Works
Comparison
Advantages Disadvantages
Open Tenders Quicker than restricted
Simple/easily understood
Can generate many tenders
Can cause confusion between evaluation and selection
Restricted Tenders
Most popular
Selection of suppliers
Fewer tenderers to manage
Most commonly used method
Additional procedure so takes longer
Call off orders from a Framework
Avoids tendering process
Quick, easy (once set up)
Pre-qualified
How tailored to your need?
Best deal?
Time consuming to set up the FWA in the first place
Activity 4 – Procurement routes
Work in pairs or small groups and for each of the scenarios, identify which procurement route you should adopt given the requirements of the EU Directives
Point of No Return
Stages in the procurement procedure
Ability to influencethe procurement
outcome
Once the OJEU contract noticehas been published and the tenders invited, there is limited opportunity to influence the outcome
A full EU procedure can take 6 -12 months to award the contract
Sections
1. Legal framework and thresholds
2. EU procurement procedures
3. Legal challenges and implications
4. Tendering practice
What is a challenge?
Any third party has the right to challenge the procedures and decisions we make
Derived principles of EC Treaty (Recital 9):
• Equal treatment
• Non-discrimination
• Mutual recognition
• Proportionality
• Transparency
Alcatel provides a specific formal opportunity – but there are wider general opportunities for challenge too
General trend: challenges are on the increase
New Remedies Directive
Remedies Directive 2007/66/EC - incorporated into UK law by 20 December 2009
Key provisions:
EU-wide adoption of the minimum 10-day ‘standstill’ period
Requirement to suspend procedure once challenged
Contracts to be considered ‘ineffective’ where serious infringement (eg no prior contract notice, no standstill etc)
What is the impact of a challenge? Potential suspension of process (…delay and
disruption)
Investigation and discovery of documentation
Consultation with relevant third parties
Potential legal involvement/action (…cost)
And if outside of procedure:
• Potential injunction/set aside
• Potential damages
• Reputational issues
• Potential disciplinary action for the relevant officer(s)
Recent case law - implications
Case OutcomeEMM G Lianakis AE and others v Dimos Alexandroupolis and others (2008)
Letting International Ltd v London Borough of Newham (2008)
McLaughlin & Harvey Ltd v Department of Finance & Personnel (2008)
Henry Brothers (Magherafelt) Ltd and others v Department of Education for Northern Ireland (2008)
• Tenderers must be on equal footing with transparent criteria• Can not evaluate suitability or experience of supplier at ‘award’
stage
• Must provide full transparency of evaluation criteria• Can not award marks for ‘exceeding’ requirements
• The full sub-criteria needs to be disclosed
• Award must be based on stated evaluation criteria• Cannot be selective in choice of which price elements to consider• MEAT implies cost has to be one of the criteria
Activity 5 - Learning Points Summary Selection and award are two ________ processes within the
restricted procedure
Tenderers must be treated on an ___________
Once selected, cannot __________ selection
Must provide full ____________ of evaluation criteria
Award decision must be based on ______ criteria
____ must be one of the award criteria in MEAT
Cannot be _______ in your evaluation
Cannot score additional marks for ___________
separate equal basisre-evaluate transparency
stated Costpartialadded value
Restricted Procedure: Selection & Award
Stage 3:Award
Stage 2:Selection
Stage 1:Exclusion
• Ineligible tenderers (offenders, insolvencies, etc) (Regulation 23)• Failure to meet “minimum standards” (Regulations 24 and 25)
• Selection of firms to invite to tender [short-list] (Regulation 16)
• Award the tender to MEAT (or lowest price) (Regulation 30)
“A contracting authority shall use criteria linked to the subject matter of the contract to determine that an offer is the most economically advantageous, including quality, price, technical merit, aesthetic and functional characteristics, environmental characteristics, running costs, cost effectiveness, after-sales service, technical assistance, delivery date, delivery period and period of completion.” (Regulation 30)
Activity 6 – Selection & Award
Work in pairs or small groups to consider each of the criteria and decide in which part of the Selection & Award process you should be assessing them
Sections
1. Legal framework and thresholds
2. EU procurement procedures
3. Legal challenges and implications
4. Tendering practice
Restricted tendering Most popular route – two-stage process
‘Pre-qualifies’ acceptable suppliers
Basic process:
Issue PIN (optional)
Advertise OJEU notice
Pre-qualify expressions of interest – selection decisions
Invite tenders (typically 5 – 9 tenderers)
Evaluate tenders – award decision
Standstill period
Award contract
Notices
PINPrior Indicative Notice
Non-mandatory
Helps provide prior notice (up to 12 months)
Helps reduce timescales
OJEUmandatory above threshold
Advertisement
Serves as public notice of contract opportunity to respond
Timescales are mandatory
Required, irrespective of procurement route
Pre-qualification questionnaire
Use your authority’s standard PQQ template, which should:
Identify all suitable and capable providers
Assess regulatory compliance
Assess key assurance criteria (such as E&D)
Identify and regulate sustainability
Evaluate the PQQ responses:
Minimum standards
Shortlist for tendering
Notify and debrief
Avoid repeating the PQQ evaluation criteria in the subsequent ITT
Tips for pre-qualification
1. Ensure every pre-qualified can fulfil the requirements
2. Check basic compliance documentation
3. Credit check
4. Check available references
5. Avoid subjective and unsubstantiated selection
6. Document your evaluation and archive
ITT – what to include
Background information
Instructions to tenderers
Form of Tender
Terms of Reference/Specification
Terms and conditions
Pricing schedule
Acceptance procedures, award criteria (and subcriteria) and timescales
Contact and process for queries
Non-collusive declaration (bona fide tender)
Managing clarifications
Bidders will sometimes ask questions for clarification
Sometimes for genuine reasons
Sometimes for other motives
The basic golden rules:
Keep all communication written (and recorded)
Communicate with all bidders equally – same message, same time
Avoid 1:1 communications of any kind
Avoid controversy – keep it wholly professional
Remember this correspondence could become part of the contract documentation
Tender submissions
Observe the deadline
Comply with procedures in your CPRs – there are strict legal implications
Provide written receipt
Keep securely stored on your premises until agreed time of opening
Record opening details
Tender evaluation
Evaluation criteria – as published on your OJEU notice and recorded in the ITT
Appraisal logistics:
Who?
When?
How?
Security and commercial sensitivity
Ethics and impartiality
Document the output
Who does the evaluation?
Subject to scale and complexity
A good buyer will include a wide mix of expertise in the evaluation
Team should have been decided during the procurement planning phase – it needs to reflect the procurement outcomes and score with objectivity
Make sure you manage clarifications with equality
Record all correspondence and evaluation scorings
Qualified bids
Qualified tenders = non-compliance
Depending on your ITT instructions, the supplier has chance to remove qualifier or face disqualification
You must follow this rule strictly – what is fair for one, must be fair for all
Make sure any correspondence on this isrecorded on file
Making the award
Follow the procedures
Document it
Write to successful and unsuccessful tenderers
Debrief unsuccessful tenderers
Provide for a standstill ‘alcatel’ period (10 days)
Make the award conditional on acceptance of all final agreements
Follow up with contract – avoid ‘letters of intent’
‘Alcatel’ standstill period
The standstill time limits:
The standstill period is a minimum of 10 days where notice sent electronically
When sent by other means, either:
15 days from day of sending; or
10 days from day of receipt
The Standstill period must end on a working day
i.e. if standstill period would end on a non working day then the actual standstill period ends at the end of the next working day
The standstill period ends at midnight
Standstill Notice (Award Decision Notice) has to include:
The award criteria unless already published
The reasons for the decision, including the characteristics and relative advantages of the successful tender
The scores obtained by the recipient and the party to be awarded the contract
The successful party's name
A precise statement of when the standstill period is expected to end
Debriefing suppliers All unsuccessful tenderers should be written to stating the
reason they lost and how they ranked
Include comparisons to the winning bid
They may request further debriefing with more detailed feedback
Unsuccessful tenderers have the right to know the reasons for rejection
Assists suppliers in improving performance if the debriefing includes weaknesses of unsuccessful bid
Assists in establishing open and honest reputation
Debriefing must be tailored to the tenderer
Buyers should record the results of the debriefing forfuture reference
Documenting decisions Regulatory compliance
Audit trail
Due process
Compliance
Public interest
Probity
Political sensitivity/interest
Freedom of Information Act 2000 implications
Activity 7 – Reflecting on learning
Discuss examples that group members have been involved in for a recent tendering situation
Reflect on the content of the entire training day to explore what you might do differently having now attended the training session
Objectives
At the end of the session, participants will have knowledge and an understanding of:
Some of the key legal and procedural requirements of the EU public procurement directives
Public Contracts directive:
• Application of threshold values and competition requirements
• Procurement routes: tenders, frameworks and negotiated approaches
• Best practice tendering
• Legal challenges and implications for public procurers
• Selection and Award
Remedies directive:
• ‘Alcatel’ and managing challenges
Freedom of Information Act