The Legal Framework of Procurement in the Public Sector

We’ve talked about the way public procurement can be fairly inflexible due to the laws that surround it, but what of the actual legal framework itself? Before we delve into any definitions and specifics, it’s worth noting that while EU and UK law legislate for the process of procurement itself, they do not stipulate what outcomes must be achieved, aside from ensuring that processes are non-discriminatory and are open to fair competition.

The over-arching requirements of public procurement policy is that the process must be based on value for money, defined as “the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought”. Public sector procurement is subject to a legal framework which encourages free and open competition and value for money and is compliant with internationally and nationally agreed obligations and regulations. Therefore, the government aligns procurement policies with this legal framework, as well as with its wider policy objectives.

The Legal Framework for Public Procurement

Business people negotiating a contract. Human hands working with documents at desk and signing contract.Broadly speaking, public procurement is governed by three fundamental sets of rules and regulations, as follows:

  • The EU Treaty sets out the fundamental principles that govern the EU, which apply to all contracts.
  • There is a broad framework of law that all public bodies must follow, including laws that govern contracts and regulatory framework that defines public bodies’ duties and powers. These public bodies then establish their own internal procedures.
  • EU Procurement Rules are set out in the EU’s ‘consolidated directive’ and implemented across the UK by the public contracts regulations 2006.

The EU Treaty puts forward further principles that public procurement is subject to, namely: non-discrimination, free movement of goods, freedom to provide services and freedom of establishment. In addition to these, some general principles of law have emerged from the case law of the European Court of Justice. In the context of procurement, the most important of these include: equality of treatment, transparency, mutual recognition and proportionality.

In terms of EU Procurement Rules, these are as follows:

  • Awards Criteria

    Public authorities may use different criteria when evaluating tenders, such as the lowest price offered. In this case, each applicant should be informed of the different weighting given to the different criteria (price, technical characteristics and environmental aspects).

  • Publication

    Certain notices must be published for any public tender exceeding the thresholds that trigger the EU-wide rules. This includes contract notice, wherein the public authority may publish the notice nationally, as well as the sending it to the EU Publications Office. The notice is published in full in an official language of the EU and a summary is translated into other languages.

    Public authorities may choose to publish other information notices, such as the prior information notice for a possible upcoming tender. If this is the case, then the time limit to submit and receive tenders can be reduced. Electronically publishing the tender is also another way of reducing the time limit.

  • Transparency

    Public authorities may only begin to evaluate tenders until after the deadline for submission has expired. If you have submitted a tender, you are entitled to know as soon as possible whether or not you have won the contract. If it’s the case that you haven’t been selected, then you are entitled to a detailed explanation of why your tender wasn’t chosen. In doing this, the public authority must observe strict confidentiality regarding the exchange and storage of your data

  • Technical specifications

    These define the characteristics of the service, supply or works that the public authority intends to buy. They may include aspects of environmental performance, design, safety, quality assurance or conformity assessment. For public works contracts they may also include tests, inspection and construction techniques.

The Public Contracts Regulations 2015

REGULATIONS CONCEPT

After enacting the 2014 EU Procurement Directives, the government worked to prioritise the Public Contracts Directive for early implementation, in order to deregulate and simplify the rules for where most procurement spend, and activity takes place. On 26 February 2015, the implementation of the Public Contracts Regulations 2015 took effect, enabling buyers to speed up their procurements in a more streamlined manner, with the onus on getting the right supplier and best tender in accordance with sound commercial practice.

Companies buying supplies, services or works for central government, a non-ministerial department, executive agency, or non-departmental public body, must follow the procedures detailed within the Public Contracts Regulations before awarding a contract to suppliers. Wider public sector bodies, such as local government, health and education are also subject to the Public Contracts Regulations.

Public procurement is also subject to the World Trade Organisation Government Procurement Agreement, which upholds much of what has already been mentioned, including open, fair and transparent conditions.

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