Procurement - New Draft Regulations Published
The Cabinet Office has published the government's response to consultations on the UK transposition of:
- Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sector (Utilities Directive)
- Directive 2014/23/EU on the award of Concession Contracts (Concession Directive)
The results of the consultations confirmed that the draft regulations implement the Directives effectively and do so in the best way. The UK government intends to implement the new directives by 18 April 2016 for England, Wales and Northern Ireland.
The Scottish government has published the Concessions Contracts (Scotland) Regulations 2016, which will also come into force on 18 April 2016.
Utilities Directive
The Utilities Directive replaces Directive 2004/17/EC and introduces the Innovation Partnership as a potential procurement route for utilities.
The Utilities Directive will apply in full to contracts with a value equal to or greater than:
- €414,000 for supply and service contracts as well as design contests
- €5,186,000 for works contracts
- €1,000,000 for service contracts for social and other specific services (listed in Annex XVII of the Utilities Directive)
Concessions Directive
Once implemented, contracting authorities will, for the first time be required to comply with new procurement rules for the award of works or services concession contracts with an estimated value equal to or greater than €5,186,000.
Authorities will be required to publish concession notices for the intention to award an above threshold concession contract, and comply with time limits for the receipt of tenders. Above threshold concession contracts for social and other specific services will be subject to a 'light touch regime'. Authorities will be required to publish a prior information notice in the Official Journal of the European Union for 'light touch' concession contracts.
A concession is a fixed fee term contract (the Regulations envisage up to 5 years) where the operational time of exploiting the asset and generating the income is transferred to the operator. Common types of concession contract include leisure centres, parking facilities and catering units in public buildings.
One feature of the new rules provides flexibility in the design of contract award procedures. The design of the procedure should comply with the overarching EU Treaty principles of equal treatment, non-discrimination, transparency and proportionality. There are expected to be transitional provisions to deal with concession contracts started before the implementation date.
Comment
The implementation of the new directives will represent a significant development in regulating concession contracts for the first time. Authorities will want to update their purchasing rules to reflect the new changes.
The Concession Directive will replace the basic rules for procuring public works concessions under the Public Contracts Regulations 2006 and introduce new, explicit procurement obligations for the procurement of public services concessions.