Changes to public procurement

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The European Parliament has approved a new set of procurement rules intended to cut red tape for charities.

The EU Procurement Directives will contain measures to encourage public sector commissioners to break up procurement into smaller contracts or explain why they have not done so.  They will also include a “most economically advantageous” rule so that public sector bodies are encouraged to give more regard to social value when tendering out contracts.

The rules will also raise the threshold over which some types of contract, including social and health services, must go out to tender across the EU.  It is anticipated that the Directives will be implemented into UK law later this year.

Meanwhile from 1 January 2014 the contract value thresholds to be applied by contracting authorities increased as follows:

Type of contract Contracting Authority New Threshold (net of VAT)
Public services – Part A Central government authorities listed in Annex IV and covered by the GPAOther public sector authorities

€ 134,000

£ 111,676

€ 207,000

£ 172,514
Public services  – Part B All contracting authorities

€ 207,000

£ 172,514
Public supplies Central government authorities listed in Annex IV and covered by the GPAOther public sector authorities

€ 134,000

£ 111,676

€ 207,000

£ 172,514
Public works All contracting authorities

€ 5,186,000

£ 4,322,012

Regulated contracts will also be subject to the Public Services (Social Value) Act 2012, which came into force on 31 January 2013. This requires contracting authorities to consider, before they begin a procurement process, how the contract and the manner of its delivery might bring about wider social, economic and environmental benefits.

It is also worth remembering that, even if the contract value falls below the threshold, contracting authorities are still required to comply with the fundamental EU principles of transparency, non-discrimination and equal treatment when advertising and awarding the contract.

For more information please contact Alan Grisedale on 0191 211 7956.