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UK: Better, quicker procurement?

David Hansom, Procurement Partner at Clyde & Co writes for The Executive Magazine on the scrutiny of the way that public services are contracted out to private sector businesses and how the UK may achieve a better, quicker procurement process.

The European Commission has recently published its latest procurement initiative: “Making Public Procurement work in and for Europe”. This reflects a recent review of the way public procurement operates across the EU and is of interest to contractors and buyers alike.

Fundamental to the initiative are the overarching themes of strategy and partnership. The partnership is a broad one, between national authorities, local bodies, businesses, stakeholders and the Commission, who are together encouraged to adopt a more “strategic approach” to procurement. The Commission recognises the need to create a more receptive, “needs based” procurement process in which data can be collated and where instances of non-compatibility and delays are reduced.

In summary, the proposal comprises four elements:

  • A “strategic approach” focused on six areas identified for improvement;
  • A voluntary scheme for buying authorities to obtain advice about their procurements and to share best practice (known as the Ex-Ante Assessment Mechanism and knowledge sharing platform);
  • The further professionalisation of public buyers; and
  • A planned consultation with stakeholders.

Amongst the areas identified for improvement within the strategic approach is the need to digitise and simplify procurement processes (for instance by rolling out the planned E-certis e-form system), to increase accessibility for SMEs (by promoting the use of first instance review bodies), and to address the lag in the growth of innovation procurement (through the wider use of the pre-existing innovation partnerships procedure).

Of interest from a Brexit standpoint is a renewed focus on reciprocity in free trade agreements and a desire to conclude “ambitious procurement chapters” within those agreements. The Commission also calls for an end to the current impasse in the European Council around an International Procurement Instrument, with its potential post-Brexit ramifications.

The concrete expression of the “needs based” approach is the Ex-Ante Assessment Mechanism. This is aimed at large infrastructure projects (worth EUR250 million or more) where an EU helpdesk will answer questions relating to the initial stage of the procurement process. For larger projects (worth €500 million or more), authorities will be able to request a confidential and non-binding “notification” as to the compatibility of a procurement plan with EU procurement legislation.

For initial stage queries, answers must be provided within a month, though an authority may need to wait up to three months before it receives a full “notification.” Despite being labelled an ‘ex-ante’ mechanism, the Commission envisages that feedback will be available “throughout project implementation”.

The assessment mechanism will operate alongside an information exchange database for use by national authorities and contracting entities. This database will include tender files, contracts, guidelines on procedures and court rulings, and will be supplemented by a separate information exchange platform that will allow those involved in large infrastructure projects to share their knowledge. Both the database and platform will be operational by early 2018 and will complement existing initiatives, such as the JASPERS’ Knowledge and Learning Centre.

There is a planned consultation with stakeholders (operative from 3 October to 31 December 2017) to focus on the means of stimulating innovation through the procurement of goods and services.

At the core of the Commission’s proposal appears to be an emphasis on providing practically focused advice and guidance.

For contracting authorities in the UK, these proposals will be legislated on in due course and, depending on timescales, it remains to be seen what will be adopted by the UK post-Brexit.

The more strategic approach to procurement, especially on major projects, is to be welcomed. It remains to be seen how widely used a nonbinding mechanism will be, particularly given the possible three month wait for a notification, but this could be a useful mechanism to reassure public bodies undertaking ‘bet the ranch’ projects.

In light of recent contractors’ instability sending shockwaves through the industry, increased scrutiny is likely on larger projects in the UK. An improved procurement process could be their saving grace.

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