Quarterly Procurement Update March to May 2014 1
3 March PPN 4/14 - new model services contract
A new model contract has been issued for use in procurements for IT and business process outsourcing services with
a likely contract value of £10 million or more. For more information please click here.
11 March e-Invoicing - European Parliament adopts Directive and FAQ published
The European Parliament (Parliament) has accepted the compromise text of the directive on Electronic Invoicing in
Public Procurement 2014/55 (e-Invoicing Directive), which was agreed with the Council in January 2014. The
Directive provides for the development of a new European standard for electronic invoicing. Once in force, public
authorities will be required to accept all e-invoices sent by a company which comply with this agreed European
standard. For more information please click here. The Commission has also published a FAQ document, which can
be accessed here. Please also see entries for 7 and 14 April, as well as 6 May, below.
11 March PPN 05/14: Fair Deal for Staff Pensions – Staff Transfers from
Fair Deal is a non-statutory policy relating to how pensions issues are to be dealt with when staff are compulsorily
transferred from the public sector to independent providers delivering public services. Under the new policy,
transferring employees will have continued access to a public service pension scheme. The new policy also sets out
how pensions issues are to be handled when contracts involving staff previously transferred out under the old policy
are retendered; in those circumstances there will be a presumption that staff will be returned back to the public service
pension scheme they previously had access to. For more information please click here.
13 March Local Government Procurement Report
In line with the Government’s concerted focus on public sector procurement reform, the Communities and Local
Government Committee has published a 72-page report which includes recommendations for improving local authority
culture and processes such as: improving collaboration across local authorities, streamlining processes and spreading
best practice. To access the full report please click here.
25 March OFT report on market study into supply of ICT to the public sector
Among other key issues, the Office of Fair Trading’s report highlights the problems associated with complex, long and
costly procurement practices. The report makes a number of recommendations including that the public sector should
continue to seek improvements in the way it procures and manages contracts with suppliers, and that suppliers should
ensure that they have adequate compliance programmes in place to guard against anti-competitive behaviour. For a
link to the report, please click here.
31 March Guidance on procurement transparency in the NHS
The Department of Health has published a guide to transparency in the NHS. It applies to all NHS provider
organisations (although not to independent providers of NHS services) and compliance with it is a new obligation under
the NHS standard contract. The guidance sets out the steps that NHS providers should take to prepare for a new
national expenditure and price benchmarking service, including the submission of accounts payable and price data to
the national service provider. For more information please click here.
Key Policy and Legislation Update
Quarterly Procurement Update March to May 2014
Quarterly Procurement Update March to May 2014 2
2 April Government security classifications
From 2 April, three new classifications (official, secret and top secret) replace the previous five classifications. This will
apply to all information that the government collects, stores, processes, generates or shares to deliver services and
conduct business. For more information please click here.
2 April Crown Commercial Service
The Crown Commercial Service (CCS) has been formally established, consisting of the Government Procurement
Service and other commercial teams from the Cabinet Office and central government departments. CCS will run the
Cabinet Office’s commercial functions, as well as its procurement and commercial management functions. For more
information please click here.
2 April Certain Austrian postal services exempt
The Commission has found that the Utilities Directive 2004/17/EC shall not apply to certain services in the Austrian
postal sector. For more information please click here.
3 April Common ICT specifications
The European Commission has announced its decision to allow the use of six common ICT technical specifications in
public procurement. The specifications were developed by global fora/consortia and can be used in addition to those
developed by European, international or national standard developing organisations. For more information please
6 April Revised World Trade Organisation’s Agreement on Government
For more information on the Protocol Amending the Government Procurement Agreement, please click here.
7 April Contracts excluded from the e-Invoicing Directive
The Council and the Commission have released a joint statement on certain contracts they consider to be excluded
from the scope of the e-Invoicing Directive. For more information please click here.
8 April Project bank accounts in Wales
The Welsh Government’s guidance and procurement advice note requests that Welsh public sector bodies build
Project Bank Accounts into any construction or infrastructure projects with a contract value of over £1 million which
will run for more than four months. In addition, the ability to use Project Bank Accounts should be built into all new
frameworks. For more information please click here.
8 April PPN 06/14: Short form terms and conditions
CCS and the Government Legal Service have developed ‘light touch’ short form terms and conditions for goods and
services (excluding construction works and IT contracts). The terms and conditions will form the basis of contract for
all Government Departments, Executive Agencies and Non Departmental Public Bodies where the likely contract value
is below-threshold. For more information please click here.
10 April Joint Procurement Agreement for pandemic vaccines and medicines
The Commission has approved a Joint Procurement Agreement which will enable all EU member states to jointly
procure pandemic vaccines and other medical countermeasures as a group. For more information please click here.
Quarterly Procurement Update March to May 2014 3
14 April Council adopts e-Invoicing Directive
The Council has formally adopted the e-Invoicing Directive, which was adopted by the Parliament on 11 March.
For further information please click here.
14 April Buying ICT for schools
The Department for Education has updated its resources on the procurement of ICT for schools, including resources
for maintained schools, academies, free schools and FE colleges. The collection includes guidance on effective buying,
exemple forms and templates, and model form ICT contracts. To access the collection please click here.
17 April Public Procurement Directives come into force
Directives 2014/23 (Concession Contracts), 2014/24 (Public Procurement) and 2014/25 (Utilities Directive) are now in
force. Member States will be required to transpose the majority of the new provisions within two years. We understand
Cabinet Office is aiming to implement new procurement regulations in England, Wales and NI in October 2014,
although that date is subject to confirmation and change. For further information and a summary of how the new rules
affect public authorities and utilities, please click here.
22 April Maritime Cabotage guidelines
The Commission has published new guidelines on the interpretation of Council Regulation 3577/92 applying the
principle of freedom to provide services to maritime transport within member states (Maritime Cabotage). The
guidelines clarify the conditions that must be complied with to ensure procurement in the Maritime Cabotage sector is
compatible with general TFEU rules and provide guidance on the award procedure for public service contracts and
their duration. For more information please click here.
6 May e-Invoicing Directive published in the OJEU
The e-Invoicing Directive has been published in the Official Journal. It will enter into force on 26 June 2014 at the EU
level. Member States will then have until 27 November 2018 to implement the Directive. For more information please
9 May Local Authorities (Goods and Services) (Public Bodies) (England) Order 2014
The National Probation Service and community rehabilitation companies in England can enter into agreements with
public companies specified in the Order from 1 June 2014. This power is limited to agreements for the provision of
legal, occupational health, health and safety, human resources or accounting, and provides that agreements for such
services cannot extend beyond 30 June 2015. For more information please click here.
24 May Certain Hungarian postal services exempt Order 2014
The Commission found that the new Utilities Directive (2014/25) shall not apply to certain services in the Hungarian
postal sector. For more information please click here.
27 May Local Government National Category Strategy for ICT
The new National ICT Commercial Category Strategy, published by the Local Government Association (LGA), sets out
the LGA’s strategy and policy for collaborative opportunities in local authority procurement. For more information
please click here.
Quarterly Procurement Update March to May 2014 4
Key Case Law Update
27 February Opinion on Teckal exemption and non-profit organisations
In the Advocate General’s opinion, the in-house exception does not permit a contracting authority to award a contract
directly to a private entity whose members include (even to a minor extent) persons with private interests, including
non-profit organisations pursuing charitable interests or solidarity objectives. For more information please click here.
Case 574/12 (The decision is not yet available in English).
3 March Declaration of Ineffectiveness made in Denmark
The Danish Complaints Board for Public Procurement has declared a contract for the combustion of rubbish
ineffective, following a direct award of a contract to Trekantsomradets Affaldsselskab I/S. A fine of DKK 500,000 was
imposed on Affaldsregion Nord I/S, which is equivalent to approximately £56,000. The finding is not binding in the UK
and we would expect a fine in England and Wales to be significantly higher. The decision is not yet available in English.
10 April Annulment of Commission contract award decision dismissed
In dismissing an appeal, the General Court found that the contracting authority had failed to provide sufficient reasons
for its evaluation of European Dynamics’ bid in relation to certain sub-criteria of the technical award criteria. However,
this error was not sufficient to justify the annulment of the decision to reject the bid as it made no difference to the
outcome of the evaluation. For more information please click here. Case T‑340/09.
10 April Opinion on derogations from the ineffectiveness remedy
In the Advocate General’s opinion, Article 2d(4) of Directive 89/665 (read in the light of the principle of equal treatment
and the right to an effective remedy) allows review bodies the freedom to assess whether the contracting authority
breached public procurement rules on advertising and competitive bidding in a deliberate and intentional way, and
impose appropriate sanctions. For more information please click here. Case C-19/13 (The decision is not yet available
30 April Opinion on direct award of contract for medical transport services
The Advocate General concluded that the TFEU principles and Directive 2004/18 precluded a national law under
which priority is given to voluntary organisations and any contract relating to medical transport services should be
awarded in compliance with European procurement rules. For more information please click here. Case C-113/13.
8 May Contract between separate publicly owned entities does not fall within
The ECJ held that the in-house exception did not apply to the award of a contract by a German university to a
separate company (partly owned and controlled by the City of Hamburg), as there was no relationship of control
between the university and the contractor company. Given the facts, the ECJ did not consider the issue of whether
horizontal in-house transactions were within the Teckal exemption; however this question is soon to be resolved, as
they are expressly permitted under the new Public Procurement Directive (Directive 2014/24). For more information
please click here. Case C-15/13.
8 May ECJ ruling on time limit for bringing a procurement action
Within the context of the Utilities Remedies Directive (Directive 92/13 as amended by Directive 2007/66), the ECJ held
that the time allowed for bringing an action for the annulment of a decision awarding a contract must start to run again
where the contracting authority adopts a new decision, after the original award decision but before that contract is
signed. That period starts to run from the communication of the new decision to the tenderers or, in the absence of
such communication, from when they became aware of that decision. For more information please click here.
This communication is provided for general information only and does not constitute legal or other professional advice.
You should consult a suitably qualified lawyer on any specific legal problem or matter.
15 May Opinion on concept of public works contract
The project involved a contract for the construction (in accordance with a pre-determined contractual specification)
and future ‘lease’ of a building from the contract authority. The Advocate General considered that the main purpose
of the contract was the construction of the building, as the lease had no purpose without the construction. Therefore,
the ‘lease’ constituted a public works contract within the meaning of Directive 93/37. For more information please
click here. Case C-213/13 (The decision is not yet available in English).
15 May Claim form adequately covered detailed claims
In determining that the brief details in the Claim Form adequately covered the detailed claims set out in the Particulars
of Claim (and thereby the detailed claims were not time barred), the High Court’s judgment helpfully sets out the keys
principles to consider when issuing a Claim Form. For more information please click here. Travis Perkins Trading
Company Ltd v Caerphilly County Borough Council  EWHC 1498 (TCC).
30 May Irish High Court declines to lift automatic suspension and rejects
American Cyanamid test
The Irish High Court has defined the basis on which applications to lift an automatic suspension in procurement
litigation under the Utilities Remedies Directive should be determined in Ireland. It rejected the use of the established
American Cyanamid test (established in the case of American Cyanamid Co v Ethicom Ltd) used by the UK courts.
Instead, the Irish court said the appropriate test should be whether the negative consequences of lifting the
suspension exceeded the benefits of maintaining it, taking into consideration the public interest in a fair and
transparent process and avoiding the burden on the defendant to pay damages in addition to honouring the awarded
contract. In the court’s view, the applicable test should not include a requirement for the applicant to provide a crossundertaking
in damages. The Court noted that Regulation 47H(2) of the PCR specifically directs the courts in England,
Wales and NI to apply the American Cyanamid principles when considering whether to lift an automatic suspension,
whereas the implementing regulations in Ireland do not; the judge considered the Irish Regulations as a “more faithful
transposition” of the Remedies Directive. For more information please click here. OCS One Complete Solution Ltd v
The Dublin Airport Authority Plc [2014 No.177 J R].
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