Procurement news blog

In a recently reported case, the question of the extent to which judicial review proceedings could be used as a challenge to a breach of the Regulations took an interesting turn.

In the case of The Queen (on the application of Unison) v NHS Wiltshire Primary Care Trust and others [2012] EWHC 624 (Admin) a trade union sought judicial review of a decision by the PCT to outsource family health services. The union challenged the decision to outsource without conducting a competitive procurement procedure.

Whilst refusing the application for judicial review in this particular case the judge commented that although there was no reported case of a union seeking a public law remedy in the context of the Regulations there was no reason to suppose that such an application was legally impossible. He could envisage circumstances (although he did not speculate what those might be) in which a breach of the Regulations could so affect the members of a union that there should be a remedy.

It is notable that it is a requirement of judicial review proceedings that the person asking for judicial review must have a 'sufficient interest' in the subject matter to be affected by a decision in some way. Third parties who might have a 'sufficient interest' are not economic operators within the definitions of the Regulations so can only bring a claim by way of judicial review.

In the High Court the judge noted that Unison would need to show that "performance of the competitive tendering procedure might have led to a different outcome that would have a direct impact on it or its members". He further noted that the burden would rest upon an applicant to support such a proposition by some evidence related to the particular facts rather than mere speculative possibilities.

In this particular case he found that Unison could only speculate at what might have happened had a procurement under the Regulations taken place rather than a decision to outsource. There were no identifiable bidders and no details of how a bid might have been formulated. In the circumstances, Unison could not discharge the evidential burden required and accordingly failed in its challenge on that ground.

A timely lesson in how far it is appropriate to stand by a defective procurement process has been thrown up by the recent case in Northern Ireland of Easycoach Ltd v Department for Regional Development.

The Department for Regional Development held a procurement exercise to select providers of pre-bookable transport services for people with disabilities in four geographic areas. At the end of the process it proposed to award 3 contracts to a company called Quinns and the final one to Out and About Enterprises Limited. Easycoach’s bid was rejected.

Easycoach brought an action alleging that the contract selection criteria lacked objectivity and transparency and that, in fact, the two successful bidders did not satisfy the selection criteria.
Easycoach certainly had grounds for complaint in relation to the selection criteria. Bidders were asked to provide details of a “relevant project” similar “in nature and scale to the services”. The court noted that there was no particularity in what the contracting authority was asking for and no benchmarks, minimum thresholds, project volumes, characteristics, duration or value specified. The evaluators were left to form opinions effectively based on the experience and expertise each possessed.

However, the court concluded that all 3 bidders were equally hampered by this vagueness and in any event Easycoach had brought its claim out of time having known of the deficiencies at the date it received the tender documents.

Easycoach were, however, able to prove other deficiencies in the way the selection criteria had been applied. The court in fact described the approach taken by the evaluation panel as “nebulous and incomprehensible”, giving rise to inconsistencies and contradictions. The ad hoc nature of the process encouraged the formation and application of subjective and intuitive judgements and as such was found to be lacking in transparency.

It got worse. Quinns had made it clear in its tender submission that it intended to sub-contract the services. It was a mandatory requirement that those operating the services should have a licence to do so but the evaluation had only considered whether Quinns was licensed and not whether its sub-contractors were. This was a clear failure and yet the contract had been awarded to Quinns.

It got worse. The court found that Quinns had failed to give evidence of reasonably comparable projects, that its tender was manifestly deficient in providing supporting evidence and that a clear falsity had not been identified by the evaluation panel.

It got worse. Out and About, the court found, had demonstrably failed to satisfy any of the four selection criteria.

What is striking about this case is that the court stayed proceedings for a month to allow the Department to carry out a due diligence exercise to verify the successful bidders’ compliance with the tender requirements. At the conclusion of that exercise, however, the Department concluded that the winning tenders were “complete and accurate in all material respects”.

The due diligence exercise gave rise to further arguments by Easycoach firstly that it should be governed by the same principles of equal treatment and transparency as applied to the Regulations or, if not, that there was an implied contract whereby the Department was obliged fairly to assess the allegations against the 2 successful bidders.

The court found that the due diligence exercise was governed by Regulation 26 of the Regulations but, if that was wrong, it went on to say that there was an implied contract requiring the Department to act with appropriate fairness towards Easycoach. However, Easycoach had been treated unfairly, triggered by the information provided, the allegations made by it following the award letter and bringing the claim. The unfairness constituted inadequate enquiry and insufficient scrutiny to the detriment of Easycoach.

Accordingly the contract award decisions were set aside.

On the bare facts of this case it is surprising that the Department reached the conclusions it did and then stuck to them so resolutely. This seems to have troubled the court which commented that where a claim is brought for breach of the Regulations the public authority is not obliged to defend it. There should be a willingness to accept that there may be legitimacy to a challenge and the High Court noted that “in cases where litigation materialises, there is never any shame in acknowledging the commission of an actionable error or errors: au contraire, the public authority sued will be duly commended by the court, will be acting manifestly in the public interest and, further, will thereby ensure that the expenditure of ever shrinking public funds is minimised to a fraction of the amount which materialises when full blown litigation, which in this sphere entails lengthy and expensive trials, eventuates.”

In March, the Public Services (Social Value) Act 2012 received Royal Assent and its substantive provisions will come into force on a date which has yet to be set by the Government, but is expected to be within the next couple of months. The new Act requires that, before starting any procurement process under the procurement Regulations for a services contract (including a services contract incorporating purchase of goods), the contracting authority must consider:

• how the services being procured might improve the economic, social and environmental well-being of the area in which the contracting authority primarily exercises its functions, and
• how, in conducting the procurement process, the contracting authority might act with a view to securing that improvement.

There is also a requirement on the contracting authority to consider whether to undertake any consultation about matters that fall within either of the points above.

All of the requirements above may be disregarded to the extent that an urgent need to arrange the procurement makes it impractical to comply with them, but note that this urgency exemption does not apply where the time available for the procurement has been reduced by the delay of the contracting authority.

Chris White MP, who put forward the initial Bill to Parliament, tells us that:

“The aim of the Act was to support community groups, voluntary organisations and social enterprises to win more public sector contracts and to change commissioning structures so that a wider definition of value rather than just financial cost was considered.”

But will the Act deliver on these aims? After all, the new Act does not require contracting authorities to ensure that the goods or services being procured result in a demonstrable improvement to the economic, social and environmental well-being of the local area.

Furthermore, the procurement Regulations will continue to apply in their current form and so:

• the procurement must not discriminate against economic operators based outside the UK and/or the contracting authority’s local area; and
• the contracting authority must award the contract to the bidder making the most economically advantageous offer or offering the lowest price.

Clearly, there is nothing to stop a supplier from outside the local area delivering a contract in a manner which improves the social and environmental well-being of the public body’s catchment area. For example, any supplier may choose to use local sub-contractors for elements of the relevant contract.

When the new Act comes into force, public bodies will need to consider whether they should include reference to social values in each services specification and whether evaluation criteria referencing the impact on the economic, social and environmental well-being of the local area should be included in the procurement process. Care will need to be taken to ensure that any new criteria are appropriately linked to the subject matter of the contract, and therefore also remain appropriate to determine the most economically advantageous offer.

However, there will need to be a balancing exercise. Public bodies will need to ensure that any criteria looking at the local impact of the proposed contract are not framed in such a way that they might discriminate against suppliers who are not based locally.

It is anticipated that many public bodies will put in place a policy on procurement which includes a statement of their approach to addressing the issues set out in the Act. Public bodies may also elect to carry out consultations locally to discuss their approach, which are envisaged by the legislation. Procurements will then need to be carried out in accordance with any such policy.

Social enterprise campaigners hope that the Act will transform public sector purchasing by looking at the collective benefit to the local community of public spending. The impact of the Act remains to be seen, but what is clear is that it is a rare example of a private member’s bill actually becoming law.

As part of a series of measures intended to make it easier for small and medium-sized enterprises (SMEs) to compete for government contracts, the Cabinet Office published a new Procurement Policy Note earlier this month specifying that:

• for any procurement of goods or services under the EU procurement threshold, Contracting Authorities should not use a Pre Qualification Questionnaire (PQQ) to pre-qualify suppliers;
• for any procurement of goods or services above the EU procurement threshold, a revised set of PQQ core questions should be adopted (although PAS91 should continue to be used for construction procurements); and
• Contracting Authorities must also avoid using a mechanistic approach to their financial appraisal of suppliers (such as requiring an arbitrary minimum turnover) which may either rule out SMEs who are financially stable or which will not provide SMEs with the opportunity to grow their business by winning Government contracts.

The PPN can be viewed here and the revised set of PQQ core questions can be viewed here.

The contents of the PPN are mandatory for all Central Government Departments (including their Executive Agencies and Non Departmental Public Bodies). All other Contracting Authorities are strongly encouraged to apply the requirements of the PPN.

It is now almost six months since the launch in September 2011 of the model short form ICT contract for local government.

The Managed ICT Services Model Agreement, or MISMA, is based on the OGC model agreement which is familiar to many of those involved in public sector IT. The original model agreement was intended only for major IT projects, and work on a slimmed down "OGC lite" has been ongoing for several years. In the end the MISMA is aimed at a local government audience, as local government was perceived to have the greatest need for the short form IT agreement.

At a meeting of the IT suppliers association Intellect earlier today, none of the suppliers and lawyers present had seen any live use of MISMA, and it may be that this is due in part to lack of awareness of the contract amongst local government legal teams.

The document should also be helpful to those in other public bodies, including the NHS, and we are aware of proposed use of MISMA in central government.

A copy of MISMA, together with instructions for its use, is available via the Local Partnerships web site (registration is required).

In the meantime, MISMA's elder brother, the original OGC model agreement, is no longer officially maintained, but it is still in use in a number of IT procurements. A copy can still be accessed online via the National Archives.

The hope is that greater publicity around MISMA will encourage take up, to improve consistency of approach in local government IT procurements, and to take advantage of the considerable work invested in developing the new model.

In a presently unreported decision on 20 January 2012 the High Court considered as a preliminary issue whether Eurostar International Limited ("EIL") fell within the definition of a 'contracting authority' for the purposes of the Public Contract Regulations ("PCR"). The case was argued by procurement heavy-weights Michael Bowsher QC and Sarah Hannaford QC and was the subject of a detailed judgment. Although it focused largely on the Utilities Contract Regulations 2006 the judge gave detailed consideration to the definition of 'contracting authority' for the purposes of the PCR in particular what the definition of 'a body governed by public law' should be.

It is worth noting that under the Regulations as enacted in the PCR, but not under the Directive, a 'contracting authority' can only be a body within the UK. Directive 17 on the other hand applies the definition to a body within any Member State. EIL is a joint venture between SNCF (wholly owned by the French government) 55%, LCR (wholly owned by the Secretary of State for Transport) 40% and SNCB (wholly owned by the Belgian government) 5%. It is currently the sole provider of rail services through the Channel Tunnel and over the years has received a substantial amount of State Aid.

The case was brought by Alstom Transport which argued that EIL was a body 'governed by public law'. It was a body 'governed by public law' because:

• It has a legal personality; and
• It is established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character; and
• It is subject to management supervision by other bodies subject to public law.

The first limb of the definition was uncontroversial.

The second limb has two parts. The court was satisfied that EIL did meet needs in the general public interest. The ECJ threshold on this is not high so, in previous cases, the building of an office block in the town centre was considered to be 'meeting needs in the general interest'. The question therefore was whether the activities were of an industrial or commercial nature. The European jurisprudence on this places a good deal of weight on the extent of competition. The more competition there is the more likely the needs would have an industrial or commercial character. Alstom pointed to the fact that EIL was the sole operator through the Channel Tunnel and also to the fact that it had received a very considerable amount of State Aid.

EIL argued that, taken overall, while it was currently the only operator through the tunnel not only were there other options for crossing the Channel but also the market had been de-regulated and that from 2013 Deutsche Bahn would be running a service through the tunnel. Indeed the services EIL were seeking related to the future and to the prospect of that competition.

The judge agreed that it was right to take all the context into account and the future in which competition would increase and on that basis he found that EIL's activities were of an industrial/commercial character. Accordingly on that ground the submission that it fell within the definition of 'contracting authority' failed.

Notwithstanding this the judge also went on to consider whether EIL was subject to management supervision by other bodies subject to public law. It was undoubtedly true that all 3 of the joint venture partners-SNCF, SNCB and LCR were owned or controlled by the governments of Member States. Under the terms of the Directive this would be sufficient to show management supervision by other bodies subject to public law. The judge however took the view that the UK government had quite specifically implemented the Directive in the way that it had in the PCR so that only UK bodies could be considered contracting authorities. Once SNCF was taken out of the equation then it was not possible to argue that EIL was subject to management supervision by other bodies subject to public law.

This case is interesting because the initial reaction is to assume that EIL would not be caught by the PCR. Once you delve deeper into the structure and set up then it was certainly arguable that perhaps it should be and although the judge in this case eventually agreed that the EIL was not a 'contracting authority' it demonstrates that it is always worthwhile to delve a little bit deeper into the structure and activities of a 'contracting authority' if you consider that a challenge may be appropriate.

A recent Court of Appeal decision contains a useful review of the law relating to the award of “concession contracts”, a type of contract excluded from the main operative parts of the procurement regulations. It also considers the extent to which implied duties to consider a tender can be imposed on a contracting authority, where the contract falls outside the scope of the procurement regime.

The case concerned the Ministry of Justice’s decision to award contracts to bailiffs for recovery of unpaid magistrates’ court fines. The MoJ does not pay bailiffs for this service. Their fees are added to the fine and recovered from the defaulter; the bailiff carries the risk of non-recovery. JBW Group were unsuccessful in tendering. They claimed a breach of the procurement regulations and alleged that the MoJ had provided improper assistance to a rival bidder. The MoJ defended the claim on the basis that the contract was a service concession contract.

The judgment summarised the paradigm case of a concession as being:
“where the applicant is put in possession of a business opportunity which he can exploit by providing services to third parties and charging them directly for those services. The contractor then bears the risks of running the business which are typically greater than those involved in performing a contract for a fixed fee.”

Whilst Elias LJ commented that he found the question of whether the bailiff contracts were a concession “very difficult”, he nonetheless held that the requirements of a concession were met. Accordingly, the procurement regulations did not apply.

JBW’s alternative argument was that the MoJ was bound by an implied contract to consider all tenders in accordance with EU principles of equality and transparency.

The Court considered this argument in light of the earlier Blackpool Aero Club decision. The Court was prepared to hold an implied contract existed, which imposed duties on the MoJ to consider the tender in good faith, both as a matter of public and private law. However, it was not prepared to impose wider duties such as equality or transparency, since they were not necessary to give efficacy to the implied contract.

The Commission published in late December its draft legislative proposals on a replacement EU procurement directive (as well as a draft replacement utilities directive and a proposed new directive on concession contracts).

The revised draft rules are intended to provide clarity in a number of areas which have been the subject of case law under the current regime, to improve and streamline procurement procedures, and to facilitate cross-border competition and opportunities for SMEs. The many changes include the concept of "innovation partnerships" as a new procurement route, and the negotiated procedure becomes a "competitive procedure with negotiation". The draft regulations also contain new provisions on joint procurement by contracting authorities, market testing, tenders presented as an "electronic catalogue", and the concept of a "European procurement passport" which has previously been promoted as a means of reducing administration for SMEs.

The Cabinet Office has issued a Procurement Policy Note asking for feedback on some of the proposals contained within the draft. It expresses concern that the Commission has chosen not to exempt mutuals from the draft regulations, and at the level of governance requirements.

Negotiations on the draft directives are ongoing, and as a result these proposals may change significantly before any new regulations are adopted into EU law (expected to be in 2013), and then transposed into UK legislation.

The Commission and Cabinet Office have confirmed that the relaxation of the rules permitting the use of the accelerated restricted procedure will cease to apply from 1 January 2012.

The Commission had previously authorised use of accelerated restricted where the acceleration would benefit the economy (which was generally taken to apply to most substantial contracts). The Commission's decision therefore appears to reflect an EU view that the economic situation has now improved, which may be a surprise to those watching growth figures for EU member states!

The change will mean that only the more limited justification for accelerating the restricted procedure around urgency preventing the use of the standard time frames (as set out in Regulation 16) will apply for procurements commenced in the new year.

The Cabinet Office has confirmed this in a Procurement Policy Note, which also confirms the new procurement thresholds which will apply from 1 January.

How time flies…the European Commission has recently published the new public procurement financial thresholds which will apply from 1 January 2012.  The new thresholds will apply for award procedures under the Public Contracts Regulations 2006, the Utilities Contracts Regulations 2006 and the Defence and Security Public Contracts Regulations 2011.

In short, the new UK thresholds under the Public Contracts Regulations are:

• Supply/Service contracts awarded by central government- £113,057
• Supply/Service contracts awarded by other contracting authorities - £173,934
• Works contracts - £4,348,350

The new € EUR thresholds can be found here and the equivalent £ GBP thresholds can be found here.

The EU has issued some helpful (if lengthy) guidance called "Buying Green" - a handbook explaining how to introduce environmental factors into the procurement process.

The new handbook deals with the issue which has been the subject of some debate among procurement professionals - is it appropriate to consider green credentials at PQQ stage? The procurement regulations are quite clear on what can be taken into account at PQQ stage (see Regulations 23, 24 and 25). There is a brief reference to "environmental management measures" at Regulation 25(2)(h) but consideration of this is limited to "where it is necessary for the performance of the contract".

There is no clear basis in the Regulations on which you could ask, for example, "do you have an environmental impact policy in place?" and score that as part of the PQQ. However, the Buying Green paper points out, at pages 34 and 35, a number of areas where green credentials could be legitimately built in to standard PQQ questions, for example by asking about past experience of contracts with similar environmental requirements.

Procurement professionals in universities were excited to read the following in a recent Department of Business Innovation and Skills White Paper ("Students at the heart of the system") presented in June by David Willetts, Minister for Universities and Science:
"Changes to the way institutions are funded may also reduce regulatory requirements. For example, because in future most funding will follow students in the forms of loans and direct grant funding from Government will decrease, fewer institutions may be subject to EU Procurement Rules."

So what is the legal position? Are universities now exempt from the procurement rules?

In broad terms, a university will be a "contracting authority" (ie a public body subject to the procurement rules) if in excess of 50% of its funding is public funding. Public funding for these purposes includes sums paid by other contracting authorities in respect of tuition fees.

The relevant change here is that funding in respect of tuition which would have previously been paid to a university by the Higher Education Funding Council for England (HEFCE), will now be paid to the university by the Student Loans Company (SLC). As far as the university is concerned, payments from the SLC are payments for the provision of tuition to a student on a qualifying education programme. Therefore, in terms of the university as a recipient of the payments, there is no material difference in terms of the purpose and/or use of the payments, from the position where the sums were received from HEFCE.

The SLC will seek repayment from students via the tax system on the basis of a contract between the relevant students and the SLC. The university is not a party to the contract, and the money paid to the university is in no way contingent on, or impacted by, whether or not any sums are repaid by students. There is no consideration given by the university to the SLC in respect of the sums received.

The SLC is a non-departmental public body that is wholly owned by government and is therefore itself a contracting authority.

Given the above understanding of the position and the operation of the SLC, our view is that it is clear that sums received from the SLC are public funding for the purposes of the procurement rules - they are sums paid by a contracting authority to universities in respect of tuition fees.

On this basis, our current view is that an increase in the percentage of funding received by a university from the SLC and a corresponding decrease in the percentage from HEFCE will not have any impact on whether the university is subject to the public procurement rules. Those university procurement officers who were hoping to escape from the procurement rules are, for the moment, going to be disappointed.

There are two important points to note:
- Firstly, in the event that the Student Loans Company is privatised (and the government indicates in the White Paper that the sale of its loan book remains a possibility), this may have an impact on the above analysis - the precise impact would depend on what is privatised, and the structure of any privatised loans provider.
- Secondly, if the increase in tuition fees leads to an increase in students paying fees themselves direct to the university (ie students funding their course privately) then that will be relevant for a university in assessing the proportion of its income that comes from public funding. Public funding does not include tuition fees paid direct by students to a university.

Those procurement practitioners who have had to consider whether a contract is exempt from competition under the Regulations on the basis that it is an "in house" contract, will know that the rules in this area have been - at best - somewhat opaque.

The Commission has come to the rescue with a working paper on "public-public cooperation". The paper is intended as a summary of the existing position rather than to create new law, but is a surprisingly readable summary of this complex area, and gives a clear statement of the principles.

For authorities needing to consider whether a contract might be "Teckal exempt" the paper is a good place to start.

Those attending the annual White Paper Conference on procurement law last week were treated to an insight from leading commentators into the likely future direction of procurement law.

Predictions of future developments included:
- an increased focus on value for money and less of a technical and mechanistic approach to interpreting the rules;
- an attempt to breath new life into the competitive dialogue procedure, with reduced (if any) restrictions on its use, and scope for post-tender negotiation;
- the (welcome?) return of the negotiated procedure to mainstream use;
- further increases in the use of electronic procurement, including availability of all tender and contract documentation online earlier in the procurement process; and
- improved training and guidance for those involved in procurement.

Speakers also highlighted the need for clarity about how the government's extensive plans for mutuals would be impacted by the procurement regime. Watch this space!

The White Paper speakers also had some interesting things to say about developments on procurement challenges. Among the views expressed:
- the American Cyanamid test which has been adopted by the courts for dealing with automatic suspension cases is natural to English courts but imposes a real barrier to claimants;
- there may be insufficient weight given to the public interest in getting procurements right as opposed to procuring the service;
- ineffectiveness as a remedy was counter-intuitive to English courts and unlikely to be very…well…effective; and
- there was little prospect of the EU legislation on remedies being amended in the near future given how recently the Remedies Directive has been introduced.

In 2010 Mrs Hossack, the sole principal of a firm of solicitors which has its only office in Northamptonshire submitted a tender to the Legal Services Commission (“LSC”) for a contract to provide publicly funded services in social welfare law from 14 October 2010. The tendering process divided England & Wales into 125 geographical areas and Hossacks tendered for each. The tender documents required, amongst other things, that the prospective service provider should have, at least, a part-time office in each area where services were to be provided.

In making its bids, Hossacks submitted a pro forma containing identical information. That pro forma referred in each case to Wiltshire and contained information specific to that area. In particular it stated (it turned out wrongly) that Hossacks would open a part-time office in Wiltshire.

Accordingly, when it came to submitting a bid for Northamptonshire, where its sole office was situated, the erroneous information that the firm intended to have a part time office there was given.

In July 2011 the LSC rejected all of Hossack’s bids except that for Wiltshire on the grounds that all other tender forms submitted did not relate to the applicable invitations to tender.
So far, not particularly unusual. What was unusual was that rather than bringing a claim under the Public Contract Regulations (“the Regulations”), Hossacks sought leave to bring judicial review proceedings to challenge the LSC’s decision.

The usual counter to such proceedings is that the Regulations provide an alternative remedy in these cases and generally judicial review is only allowed where no other remedy is available.

This was probably accepted when the application for leave to bring judicial review proceedings was rejected on paper. On appeal, this position was certainly accepted by the judge who even indicated a willingness to transfer the claim to the Chancery Division so that it could proceed under the Regulations.

Hossacks maintained however that the Regulations did not give it an alternative remedy and this argument was accepted by the Court of Appeal handing down judgment on 8 July 2011. It allowed an appeal to bring judicial review proceedings in respect of the LSC’s rejection of the tender for the Northampton area.

The Court of Appeal considered whether judicial review was rendered inappropriate by the existence of an alternative statutory remedy in the form of an application under the Regulations and found that it was not. If Hossacks was to succeed in proceedings for judicial review the LSC’s rejection of its tender could be quashed and the LSC asked to reconsider with the possibility that a contract may be awarded at the end of it. It was not clear that the same result could be achieved under the Regulation where there was a risk that the only remedy was damages. Hossacks wanted the contract, not damages.

The judicial review was heard on 27 October 2011 and was rejected for reasons that are interesting but not the main focus of this blog post. What has been interesting is the willingness of the court to accept the argument that the Regulations do not always provide an adequate alternative remedy and that judicial review may be appropriate where the Claimant is seeking, effectively, a second chance at the tender process.

As the case law develops on the Regulations and the courts have so far seemed reluctant to apply the ineffectiveness remedy perhaps judicial review will be used as an option instead to secure a second bite of the cherry.

The Office of Government Commerce website (formerly at www.ogc.gov.uk) is now offline, as OGC's main activities have now been transferred to the Cabinet Office. However, the site contained a number of resources used by many procurement professionals (and linked from this and other websites, including the website of the Cabinet Office).

Old OGC content can be viewed as part of the National Archives by adding the following text before the original OGC web address: http://webarchive.nationalarchives.gov.uk/20110601212617/

Click below for example links:

• Example link 1
• Example link 2

Going forward, procurement guidance now falls under the "Transparency" heading of the Cabinet Office site, and the most recent Procurement Policy Notes are available here.

The Cabinet Office has issued new guidance, effective immediately, on the transparency obligations relating to the publication of contracts and tender documentation. The guidance applies to central government departments, agents and agencies and non-departmental public bodies as well as NHS bodies and trading funds.

There are a number of amendments to the guidance, including updates to address dynamic purchasing systems, and new guidance on the "consultancy value statement" which must be completed relating to all consultancy purchases of over £20K.

The guidance is available to download in two parts - Publication of New Central Government Contracts, and Publication of Tender Documentation.

The EU has recently been considering the problems faced by small and medium-sized enterprises (SMEs) in competing for public contracts under the current EU procurement regime. SMEs win only 31-38% of public procurement contracts by value which is substantially less than their overall share in the economy (52% of combined turnover) suggests they should. Ironically therefore measures designed to increase competition and to free the market for all potential bidders is actually having the opposite effect by making it too costly for most SMEs to participate in tenders for public contracts.

The Committee for the Internal Market and Consumer Protection has recently considered this point and unanimously approved measures to remove the administrative barriers for SMEs to allow them to participate more effectively in competitive tenders. Those measures include a proposal for an EU-wide "electronic procurement passport" which would prove that the holder complies with EU rules on public procurement without the need to go through a substantial paper exercise for each new bid. MEPs also backed a proposal to divide public contracts into lots to give SMEs a better chance of bidding.

Although we are still a long way from any firm proposals, let alone the introduction of further legislation, the mood in Europe is clearly to lighten the load for SMEs, not-for-profit and social economy operators when it comes to the current requirements for bidding for public contracts. The Commission has been seeking views since January 2011 on this and is currently preparing a series of legislative proposals which will be tabled later this autumn.

Further up-dates on this will be available via our blog in due course.

On 27 August, European Commission Implementing Regulation 842/2011 was passed, introducing new proformas for various OJEU notices (for example, prior information notices, advertisements, award notices and voluntary ex ante transparency notices). The regulation will come into force on 16 September, meaning the new proformas must be used from that date.

The regulation is available here; the new proformas themselves are contained in the annexes to it.

From 1 October 2011 new Regulations (the Public Procurement (Miscellaneous Amendments) Regulations 2011) will implement the judgment in the Uniplex case into UK law.

In Uniplex the European Court of Justice considered Regulation 47(7) of the Public Contract Regulations and in particular the requirement to bring proceedings for infringement "promptly and in any event within 3 months from the date when grounds for the bringing of proceedings first arose, unless the Court considers there is a good reason for extending the period". This was very much in line with practice in English courts in particular in judicial review cases.

In Uniplex the ECJ held that in order to guarantee the effectiveness of the remedy provided by the EU Remedies Directive:

• The limitation period for bringing proceedings to establish an infringement or to obtain damages should not start to run until the date on which the potential Claimant knew or ought to have known of the alleged breach of the procurement rules; and
• That the requirement to bring proceedings promptly, which left the court with a discretion to dismiss an application before the 3 month time limit for bringing a claim had not yet expired, was inconsistent with EU law as it was not precise and made the limitation rules uncertain.

Judgment in Uniplex was handed down in January 2010. In November the Cabinet Office began consulting on the necessary amendments to the Regulations in order to implement it. The conclusion of the consultation was to amend the Regulations so that the time limit for bringing legal proceedings should be 30 days starting from the date of knowledge of the matters which might give rise to a claim but preserving a discretion for the court to extend the period to an absolute maximum of 3 months from the date of knowledge.

Ahead of the formal implementation of Uniplex the courts have ignored the word 'promptly' in Regulation 47(7) thus largely implementing the judgment of the ECJ by default. As a result, the principal battleground has been over the date of knowledge. The Cabinet Office have chosen not to define this any further than the date on which the potential Claimant first knew, or ought to have known, that grounds for starting proceedings had arisen. The leading case on this is Sita UK Limited v Greater Manchester Waste Disposal Authority which held that the time period begins to run when the potential Claimant has knowledge of the basic facts which apparently clearly indicate (although do not necessarily prove) an infringement of the Regulations.

As a result of implementing Uniplex there are some further consequential amendments dealt with in the new Regulations. These include:

• A provision that for the purposes of the automatic suspension provisions under Regulation 47G6 the claim need only be issued and not served on the contracting authority;
• The issued claim must, however, be served, within 7 days of issue; and
• If the contracting authority is in any event aware that proceedings have been issued then the automatic suspension will still apply.

There is also a modification of the requirements for sending standstill notices. It will no longer be necessary to send a standstill notice to all tenderers who submitted an offer. There will be no requirement to send the notice to those economic operators whose tenders have been 'definitively excluded'. A tender has been 'definitively excluded' where that exclusion has either been held to be lawful in proceedings or where the time limits for bringing a claim have already expired