The government has published proposed draft regulations to implement the new EU Public Procurement Directive (2014/24/EU, the "Directive"). The Directive is part of a package of measures that will The government has published proposed draft regulations to implement the new EU Public Procurement Directive (2014/24/EU, the "Directive"). The Directive is part of a package of measures that will reform public sector procurement across the EU and must be implemented in Member States by 17 April 2016. The government has indicated that it aims to implement the Directive sooner than the 17 April deadline. The government proposes to adopt a "copy out" approach for much of the Directive. Most of the Directive's provisions are mandatory and do not leave room for altering its substance when transposing it into UK law. However, there are areas of the Directive that are not mandatory or where the Directive leaves room for Member States some scope to determine their national rules. This blog looks at three such areas and the government's proposed approach. The Light-Touch Regime In a limited number of circumstances the Directive gives the government scope to make choices about how to implement the Directive. Perhaps the most significant change being brought in by the Directive is the abolition of the distinction between "Part A" and "Part B" ("priority" and "non-priority") services and the introduction of a new "light-touch" regime for social and other specific services set out in Schedule 3 to the draft Public Contracts Regulations (the "Regulations"). Many (but not all) services that are categorised as "Part B" services under the current regime and procurements for these services will be subject to the new light touch regime if the contract value is €750,000 or more. Member States have flexibility to devise their own national rules for the award of contracts for Schedule 3 services. The government has taken a "minimalistic" approach to the UK's light touch regime. Contracting authorities will be able to determine the procedures to be applied in connection with the award of contracts for Schedule 3 services, as long as those procedures are sufficient to ensure compliance with the principles of transparency and equal treatment of economic operators. SME Access/Division of contracts into lots The Directive aims to increase the possibilities for small and medium sized enterprises (SMEs) to participate in large scale public procurements by introducing new mechanisms allowing contracting authorities to award contracts in the form of lots. Members States have a choice over whether the division of contracts into lots should be mandatory under national law. The government proposes to allow contracting authorities to decide whether to award a contract in the form of lots on a case by case basis. Where a contracting authority decides not to divide a contract into lots it would have to provide an indication of the reasons for its decision. The government also proposes to allow bidders to tender for combined lots. Contracting authorities would need to make clear in the procurement documents the possibility that contracts will be awarded for combined lots and indicate the lots that may be combined. Bidders' past performance The Directive gives Member States the option to require contracting authorities to exclude economic operators from participating in a procurement procedure if that economic operator has "shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract … which led to early termination of that prior contract, damages or other comparable sanctions". The current wording of the Regulations does not mandate an economic operator's exclusion from a procurement procedure if there have been significant deficiencies in its past performance and the contracting authority retains discretion over whether or not to exclude the economic operator. The government has proposed that the "default" exclusion period should be three years; the maximum permitted under the Directive. It is anticipated that the Government will publish guidance material for contracting authorities on how to exercise their discretion to exclude bidders based on their past performance.
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