17/03/2015
On the 26 February 2015, The Public Contracts Regulations 2015 ("The Regulations") came into force across England, Wales and Northern Ireland. Implementing the European Union Public Sector Procurement Directive (Directive 2014/24), they contain a number of changes to the way public bodies’ manage their procurement processes.
One of the main developments pertaining to the Regulations is the implementation the recommendation put forward in 2013 by David Cameron’s Enterprise Advisor, Lord Young of Graffham. Known as the Young Reforms, the recommendations were made with the intention of freeing the public procurement process of much of its notorious red tape, allowing SMEs to compete for tenders on an equal playing field with large corporations.
So what are the Young Reforms, and what changes have been implemented into the new Regulations that might affect your business?
Here are 5 fast facts that you need to know today.
Payment Within 30 Days
The Regulations dictate that all undisputed invoices are to be paid within 30 days of receipt. This is in order to encourage small business to bid for public work contracts, secure in the knowledge that they will not run into any cashflow problems due to late payment after work is completed.
Abolishment of PQQs for Contracts Under a Certain Threshold
Pre-Qualification Questionnaires (PQQ) have been abolished for any procurement for goods and services under £112,000 in central government and £173,000 outside central government and NHS Trusts. In an article published in the Daily Telegraph on the 10 February 2015 , Lord Young wrote that often PQQs ran to 40 pages asking for often irrelevant information which caused many SME directors to “throw up their hands in horror”. This change will allow SMEs to bid for contracts on a more equal footing to large corporations who have always had the required resources to turn PQQs around quickly.
The Contracts Finder
The rebuilt Contracts Finder goes live on 26 February 2015. All public authorities will be required to add contracting opportunities to the Contracts Finder and organisations will be able to search, not only for new tender opportunities, but discover who has been awarded existing contracts. This opens up the process to more transparency and is aimed to encourage greater competition.
Regard to Cabinet Office Guidance
Under s107 of the Regulations, contracting authorities have a statutory obligation to have regard to government guidance around the selection and exclusion of suppliers. If procurement officials do not comply with these guidelines they must submit a report to the Cabinet Office outlining their reasons for their eventual decision*.
Keeping Records
Contracting Authorities will be required to keep records of their compliance with their obligations in relation to the Young Reforms featured in the Regulations and publish them on the internet offering SMEs another layer of transparency (and possibly fertile ground for future litigation if compliance is no adhered to).
So there you have it, five fast facts about the Lord Young Reforms and how the Government hopes that there implementation into legislation will help support SMEs compete for public procurement contracts alongside and against large corporations.
If you have any questions regarding the Regulations which came into force last week please call our office on 0207 993 6917 or click here
Do you have any comments to make on the new Regulations? Feel free to drop us a line below.
*Procurement of health services under the NHS Regulations are excluded.
Fisher Scoggins Waters is a leading construction, engineering and manufacturing litigation firm, specialising in disputes and disasters. For further information on this article or any of our litigation services, please contact us on: +44 (0) 207 993 6960.