Current issues

Brexit: changes to procurement regulations:

The European Union (Withdrawal) Bill, when enacted, will incorporate the existing corpus (or acquis) of EU law into the UK statute books, including the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, and the Concessions Contracts Regulations 2016. Changes to these regulations will be needed, for example, to remove references to EU institutions and OJEU, but it is unlikely that policy changes will be effected in the short term.

UK to join Government Procurement Agreement in its own right:

Following Brexit, the UK will join in its own right the WTO Government Procurement Agreement, which aims to ensure open government procurement between its members. Currently, the UK is a member by virtue of its membership of the EU. UK government public procurement policy changes in years to come will therefore need to be made in line with the GPA rules.

Recommendations for improvement to running of public procurement procedures:

The inquiry into the Nuclear Decommissioning Agency’s failed procurement for a contract to decommission 17 nuclear power plants has published its interim report. The interim report makes a number of recommendations, including that the NDA should run simpler, more transparent competitions, and should improve record keeping. The final report will likely contain far more numerous and wide-ranging recommendations, which may well influence future procurement policy and guidance more widely.

Claimants should be prepared to issue on the facts available:

The High Court has refused an application to extend time, from the statutory seven day period following issue of a claim form, to serve particulars of claim for a procurement challenge. The court narrowed the grounds on which such applications will succeed; stating that there needs to be a “very good reason” to extend time. The decision makes it less likely that defendants will agree to grant an extension of time, given the likelihood of the court denying such an extension. Claimants will now have to issue claims and be prepared to plead particulars within seven days, on the facts available, and reserve rights to amend pleadings following disclosure if necessary.

Rules on confidentiality rings clarified:

A claimant applied to have an employee and its experts included in a confidentiality ring to examine disclosed documents. The claimant argued that its legal team would not be able to understand the documents, but the application was denied. This might be the start of a more consistent approach by the courts, allowing external lawyer-only confidentiality rings in the first instance, with non-lawyers allowed to see confidential documents only if lawyers cannot understand them and advise without client or expert assistance.

Changes to healthcare procurement:

Following Lord Carter’s 2015 review into NHS productivity, the Department of Health has announced wholesale changes to the procurement of goods by the NHS in England. Under the new rules, medical products will be divided into 11 categories, and each category will be procured centrally by private sector partners. The new structure represents a step towards centralised procurement in order to bring about significant savings. The changes will be implemented in September 2018.

New public procurement thresholds:

The European Commission has increased the thresholds that apply to new procurement procedures commencing on or after 1 January 2018 under the PCR 2016, the UCR 2016 and the CCR 2016.

This is a scheduled increase that occurs every two years. The next threshold increase is expected at the beginning of 2020, although this might not be relevant to UK public contracts, depending on what changes are made to public procurement law as a result of Brexit. The previous thresholds will continue to apply to any procurements that commenced (i.e. the contract notice or prior information notice was published on OJEU) before 1 January 2018. For details of the new thresholds see here.

Dates for the diary

Early 2018 Decision anticipated in Commission v Austria. The case concerns the purchase of services to manufacture biometric passports by the Austrian state. The contract was directly awarded to an Austrian company, with no procurement process, on the grounds of national security. Austrian law requires that a contract to produce any “official” documents is always awarded to one particular Austrian company. The case should clarify the extent to which, and in what circumstances, a government can choose whether to take national security into account when deciding to run a procurement process.
June 2018 Appeal in R (Faraday Development Limited) v West Berkshire Council due to be heard. The original judicial review, which concerned whether a development agreement entered into by West Berkshire Council should have been subject to a public procurement procedure, was unsuccessful.
Spring 2018 Final report of inquiry into failed NDA procurement due to be published.
September 2018 Changes to NHS procurement rules to be implemented.