24/10/2012
This update contains brief details of recent key developments relevant to those involved in procurement work.
If you have been forwarded this update by a colleague and would like to receive it direct please email Claire Booth.
All links are correct at the date of publication.
In this update:
Policy and guidance
Cabinet Office Procurement Policy Note 07/12 - Tax Arrangements of Public Appointees
Sets out the recommendations from the recent HM Treasury review of the tax arrangements of public sector appointees, and details regarding how departments must now implement those recommendations. (28 August 2012)
Cabinet Office: Procurement Policy Note 08/12 – Update on modernisation of the European Union Procurement Rules
In December 2011 the Cabinet Office announced and sought feedback on the EC’s proposals for revised Public Procurement Directives and a new Concessions Directive. This PPN sets out the progress with the main EU negotiations and the Cabinet Office's plans for consultation. (28 August 2012)
NHS Confederation: Working with GP commissioners: a guide for local councillors and officers
This briefing explains the implications of the changes introduced by the Health and Social Care Act 2012 and includes tips for councillors when working with health colleagues on Health and Well-being Boards and for strong and cohesive working. There is also an equivalent guide for GP commissioners on working with local government that includes a list of local authorities' responsibilities for public health. (9 August 2012)
Institute for Government: Choice and competition in public services - Learning from history
This study looks at the long history of attempts to introduce market mechanisms in public services over the past 30 years, concentrating on four key areas that have seen the most significant change: welfare-to-work, social care, health care and local government. It considers how this has brought benefits in terms of value for money and the quality of service, but has also led to failures (sometimes spectacular). It concludes that market mechanisms seem to have played some role in improvements in some services (e.g. waste management) over the past 30 years, while proving less useful in others (such as local bus markets). Often, success and failure were seen as resulting as much from detailed aspects of policy design and implementation as from any inherent reasons why choice and competition were or weren’t appropriate. (31 August 2012)
Welsh Government: Maximising the impact of Welsh procurement policy
Sets out the findings of John McClelland's review that was commissioned by the Welsh Government to consider the overall effectiveness of Welsh public sector procurement and how the impact of procurement could be maximised. It looked at: whether Welsh Government had the right operating model and resources in place; if the central resource was being effectively deployed; if the wider public sector resource was adequate; if other Welsh Government policies were appropriately aligned; and whether Welsh public sector procurement was delivering value for money and having an optimal impact on economic growth. (19 September 2012)
Procurement of healthcare (clinical) services: Briefings for CCGs
The NHS Commissioning Board Authority has developed a series of procurement briefings for Clinical Commissioning Groups (CCGs) that summarise the key elements of legislation and guidance currently governing NHS procurement of healthcare services. The briefings also provide an overview of the different procurement approaches that CCGs may adopt and outlines some of the key considerations when undertaking a procurement process.
The briefing papers cover:
- Introduction: Why do CCGs need to understand procurement?
- How does procurement fit with the different stages of commissioning?
- What are the procurement options?
- Which rules apply to a procurement process?
- How should a procurement process be conducted?
- Summary of the decision-making process.
(14 September 2012)
CBI: Open access
This report shows how open public service markets can lead to an increase in quality, choice and value for money. The report identifies how to maintain high quality public services and achieve £22.6bn or more of taxpayer savings by further opening up public service delivery to independent providers. It highlights the challenge of making significant reductions in public spending to balance the budget by the end of 2016/17 and also takes into account the increasing pressure that changing demographics will put on services. Independent providers are already delivering many public services well, but in order to plan investment into new areas they need to know how markets will operate in the future. The report concludes that ploughing on regardless is not an option and urgent action is needed from the Government to deliver its Open Public Services strategy. (24 September 2012)
OFT: A guide to the OFT's investigation procedures in competition cases
The OFT has issued updated guidance on competition investigations that sets out new decision-making processes and procedural enhancements to boost the speed and robustness of Competition Act 1998 investigations and increase engagement with parties involved. (16 October 2012)
Legislation – UK
Assets of Community Value (England) Regulations 2012 (SI 2012/2421)
These regulations, which come into force on 21 September 2012, provide for the Assets of Community Value scheme under Part 5 Chapter 3 of the Localism Act 2011. The Scheme requires a local authority to maintain a list of buildings and other land in its area which are of community value, and ensures that when such land is to be sold local community groups will have the opportunity to delay the sale to enable them to prepare a bid to buy it. The regulations set out the detailed requirements for both local authorities and owners of listed land, including exemptions, rights to appeal and compensation, safeguards against non-compliance and the penalty for non-compliance. (20 September 2012)
See also: DCLG: Community Right to Bid – Non-statutory advice note for local authorities
This advice note, which has non-statutory status, is aimed at helping local authorities to implement the Community Right to Bid scheme under Part 5 Chapter 3 of the Localism Act 2011 and the Assets of Community Value Regulations 2012. The scheme gives communities the opportunity to identify assets of community value and have them listed and, when they are put up for sale, more time to raise finance and prepare to bid for them. It requires local authorities to work with local communities to decide on asset listing, ensure asset owners understand the consequences of listing, enforce the moratorium period and take decisions as part of any appeals process. (4 October 2012).
Bevan Brittan has published an Alert on the practical implications for local authorities of the coming into force of the Assets of Community Value scheme: Community value – It's our asset and we'll bid if we want to.
Equality Act 2010 (Age Exceptions) Order 2012 (SI 2012/2466)
The ban on age discrimination in the provision of services and public functions (and associations)came into force on 1 October 2012. The intention is to ensure that the ban prohibits only harmful discrimination and permits beneficial or neutral differentiation because of age. This Order, which comes into force on the same date as the ban, inserts a number of specific age-related exceptions into Sch.3 and Sch.16 to, and s.195 of, the 2010 Act so as to put beyond doubt that such activities will always be excepted from the age discrimination prohibition in respect of services, etc. (19 September 2012)
Consultations
Securing best value for NHS patients – Requirements for commissioners to adhere to good procurement practice and protect patient choice
Seeks views on proposals for regulations for the NHS Commissioning Board and CCGs under s.75 HSCA 2012 on procurement, patient choice, competition and managing conflicts of interest, that aim to protect patients’ interests by establishing minimum requirements for good commissioning so that commissioners always deliver best value. The consultation invites comments on the five main sections of the future regulations:
- proposed requirements to ensure good procurement practice including requirements to act transparently, avoid discrimination and purchase services from the providers best placed to meet patients’ needs;
- proposed requirements to ensure that commissioners enable patients to exercise their rights to choose as set out in the NHS Constitution;
- proposed requirements prohibiting commissioners from taking actions which restrict competition where this is against patients’ interests;
- proposed requirements to ensure that commissioners manage conflicts of interest, ensuring that particular interests do not influence their decision-making; and
- Monitor’s proposed investigative and enforcement powers.
The closing date for comments is 26 October 2012. DH plans that the draft regulations based on these proposals will be laid in Parliament in January 2013 and come into force in April 2013.
Cases – EU
Evropaiki Dynamiki v European Commission (C-629/11)
This was an appeal by Evropaïki Dynamiki against the judgment of the General Court dated 20 September 2011 in case T-298/09.. The Court of Justice of the European Union (CJEU) rejected Evropaïki Dynamiki’s plea alleging an erroneous interpretation by the General Court of the requirements upon the contracting authority to provide information to tenderers relating to the contract award decision. (4 October 2012)
Cases – UK
Shetland Line (1984) Ltd v Scottish Ministers [2012] CSOH 99 (Outer House)
This case concerned a procurement by the Scottish Ministers of a contract for ferry services to the Northern Isles of Scotland. The procurement was undertaken through the agency Transport Scotland, under the Public Contracts (Scotland) Regulations 2006 using the competitive dialogue procedure. These regulations are very similar (and are identical in many respects) to the Public Contracts Regulations 2006.
Shetland Lines issued proceedings which resulted in the automatic suspension of the contract award. The court granted the application by the Scottish Ministers to lift the automatic suspension. The court took account of the fact that, first, any arguable case for breach of the regulations was on the facts very weak; secondly, that the balance of convenience favoured lifting the suspension because of the importance of the ferry service to the islanders and the potential adverse impact of uncertainty, as well as the interests of the successful bidder; and, thirdly, because damages would in any case be an adequate remedy. (29 May 2012)
Turning Point Ltd v Norfolk CC [2012] EWHC 2121 (TCC)
This case concerned a contract for providing drug and alcohol treatment services tendered by Norfolk County Council using the restricted procedure under the Public Contracts Regulations 2006. Turning Point’s tender was rejected as inadmissible. Turning Point had included a note in the tender indicating that it would wish to enter into further discussion on staffing related issues due to a lack of information on this issue in the tender documents. The Council considered that Turning Point’s tender was qualified and rejected it. Turning point claimed that the regulations were violated on a number of grounds. The Court struck out the claims. It concluded that:
- a claim based on absence of information was out of time.
- the other claims based on breach of the regulations had no reasonable prospect of success. Turning Point had submitted a qualification to its tender and there was no duty or power to seek clarification and amendment in the case of a clear qualification to a tender;
- an implied contract might exist in light of the specific wording of the tender documents, but there was no violation of any contract here.
(26 July 2012)
By Development Ltd v Covent Garden Market Authority [2012] EWHC 2546 (TCC)
This case considered to the extent to which expert evidence could be admissible or relevant in a procurement dispute under the Public Contracts Regulations 2006. The claimant (BD) challenged the CGMA’s award of a development agreement for New Covent Garden Market to a rival bidder. They contended that the CGMA’s evaluation of the respective bids contained a number of manifest errors, particularly in relation to planning matters, and that the decision was unfair and/or arose as a result of the unequal treatment of their bid. BD applied for permission to rely on expert evidence in the fields of both planning and finance.
The court held, dismissing the application, that in judicial review or procurement cases where the issues were concerned with manifest error or unfairness, expert evidence would not generally be admissible or relevant, because the court was carrying out a limited review of the decision reached by the relevant public body and was not substituting its own view for that previously reached, because the public body was likely either to be made up of experts or would have taken expert advice itself in reaching the decision; and because such evidence might usurp the court's function. There might be cases where, unusually, such evidence was both relevant and necessary to allow the court to reach a conclusion on manifest error but this was not one. The court‘s exercise was to conduct a factual investigation of each of the specific matters said to constitute manifest error or unfair and unequal treatment and expert evidence would neither be admissible in nor relevant to such a limited exercise. (28 September 2012)
AG Quidnet Hounslow LLP v Hounslow LBC [2012] EWHC 2639 (TCC)
This case concerned proposals by Hounslow LBC to enter into an agreement with Legal & General (L&G) to permit L&G to develop a parcel of land which was partially owned by the Council. The legality of this proposed agreement was challenged by Quidnet, a developer which also owned land in Hounslow. The challenge was made on the basis that even if the proposed agreement was not a works contract (not an issue dealt with in this case), the proposals were in breach of Art.56 of the Treaty on the Functioning of the European Union – freedom to provide services. Quidnet claimed that on this basis there had been insufficient advertising of the opportunity. The judge held that there was no breach of Art.56. The proposed agreement was essentially an agreement for a long lease of the site. It was not a contract for services: it did not impose an obligation on L&G to provide services and the fact that L&G may itself procure services in the future was not of relevance. (28 September 2012)
News
LGA: Procurement pledge for local authorities
The LGA has launched a Local Government Procurement Pledge to highlight the sector’s commitment to greater collaboration with business, SMEs and the voluntary sector, to help drive improvements and efficiencies in how councils procure goods and services. It aims to ensure that the £62bn that councils spend each year on buying goods and services provides value for money and supports local economies. The Federation of Small Businesses, local authorities and a range of charities have offered their support to the Procurement Pledge. (26 July 2012)
DCLG: Department now publishing all spend over £250
DCLG has announced that it is taking its transparency pledge to a new level by publishing all spend data over £250. Arm's Length Bodies linked to DCLG will now also be asked to follow suit as a matter of routine at the end of each month. (15 August 2012)
OFT welcomes action by NHS trusts to ensure compliance with competition law
Eight NHS Hospital Trusts, which are members of the Southern Region Private Healthcare Association (SPHA), have given voluntary assurances to the OFT that they will no longer exchange commercially sensitive information about their Private Patient Unit (PPU) prices, to ensure they comply with competition law. They will also provide further training to their staff on the importance of complying with competition law where applicable.
Members of the SPHA include:
- Brighton and Sussex University Hospitals NHS Trust
- Frimley Park Hospital NHS Foundation Trust
- East Sussex Healthcare NHS Trust
- Portsmouth Hospitals NHS Trust
- Dartford & Gravesham NHS Trust
- University Hospital Southampton NHS Foundation Trust.
Epsom and St Helier University Hospitals NHS Trust and East and North Hertfordshire NHS Trust have since withdrawn from the SPHA.
The OFT will also be writing to all NHS Trusts and Foundation Trusts which operate PPUs, enclosing guidance on competition law compliance. (16 August 2012)
DECC: Legal framework for Green Deal signals green light for industry
Highlights that the legal framework for the Green Deal is now in force, enabling Green Deal providers, assessors and installers to start to become authorised, and display the Green Deal Quality Mark, and put in place their systems for delivering assessments to consumers. (2 October 2012)
Documents and guidance are available on the Green Deal Oversight & Registration Body's website.
Bevan Brittan have published a Green Deal Alert: Are you ready to deliver Green Deal and ECO? that discusses the key issues for any contracting authority considering the opportunities presented by Green Deal and the Energy Companies Obligation (ECO).
DfT: West Coast Main Line franchise competition cancelled
Announces that the procurement competition to run trains on the West Coast Main Line has been cancelled following the discovery of significant technical flaws in the way the franchise process was conducted. This means that DfT will no longer be awarding a franchise contract to run the West Coast service when the current franchise expires on 9 December 2012 and it is consequently no longer contesting Virgin Trains’ judicial review. The flaws uncovered relate to the way the procurement was conducted by department officials and DfT has since announced that three civil servants involved in the procurement have been suspended. (3 October 2012)
The Transport Secretary has since announced that the DfT is commencing negotiations with Virgin Rail Group with a view to them remaining as operator of passenger services for the West Coast Main Line for a short period of around 9 - 13 months while they run a competition for an interim franchise agreement. This interim agreement, which would be open to any bidders, will then run until a new long term West Coast franchise is ready to commence. The DfT has also paused the on-going franchise programme including live competitions on Essex Thameside, Great Western and Thameslink, and has set up two independent reviews into what went wrong with the West Coast competition and the wider DfT rail franchise programme. (15 October 2012)
Bevan Brittan LLP has issued an Alert: Procurement – evaluation processes off the rails that highlights the impact of this decision for contracting authorities’ procurement processes.
DCLG: New 'Community Shares' to boost local services
The Communities Minister has launched a new Community Shares Unit to help local people claim a stake and become part owners of local assets and services. The new unit, which is run by Co-operatives UK and Locality , will enable more local enterprises to use share offers as a way of raising finance, in particular risk capital, to purchase buildings or get new projects up and running. Investors may also benefit from dividend payments that can be paid in money or in kind, e.g. cheaper energy, cut-price pints or local, fairly-priced food. (5 October 2012)
The Government Procurement Services legal services framework agreement allows customers throughout the public sector to place orders with Bevan Brittan LLP under standard terms and conditions of the agreement. We are appointed to the Full Commercial Panel and can therefore provide advice on a wide range of legal services covered by the framework, including:
- IT
- Property and Estates
- Employment and Pensions
- Intellectual Property
- PPP/PFI projects
- Competition law
- Telecommunications & ecommerce
- Construction
- Corporate & Finance
- Public Procurement
- Outsourcing
- Regulatory law
