Links I Liked [Public Procurement]

1. France's transposition of Directive 2014/24/EU is almost done and Le Moniteur had access to the current working draft (French only).

2. A Spanish vision of public procurement of innovation (Spanish only). Plus, the national Government produced a new version of its innovative public procurement guide, also only in Spanish.

3. The UK Government cannot save £10 billion by moving procurement online. Peter Smith is sanguine about the savings claims included in the Reform report Cloud 9: the future of public procurement. I am not fully convinced either, but it could be added to the report's figure that if competition in public procurement increased by being moved online then the ability of (some) suppliers to extract rent would be limited. This affects not only the prices today (potentially leading to their immediate reduction) but also prices in the future as the increase in competition would lead in my view to a gentler slope of increase going forward.

4. Whitehouse adopts a Open Source Software policy:

"This policy requires that, among other things: (1) new custom code whose development is paid for by the Federal Government be made available for reuse across Federal agencies; and (2) a portion of that new custom code be released to the public as Open Source Software (OSS)."

Very interesting approach by the US Federal Government. I have to wonder however how many Federal agencies will end up reusing custom code contained in the repository. This policy does have implications for procurement.

5. We're hiring: Professors, Associate Professors, Senior Lecturers and Lecturers.

Links I Liked [Public Procurement]

1. Are urban developments subject to procurement rules (or at least principles)?

Good case report by Paul Henty. I remember vividly a discussion back in 2007/8 with my then Ph.D supervisor about how come development contracts are not considered relevant for the internal market and as such subject to EU rules? My overarching point is that procurement rules should cover not only the buying strictu sensu but also contracts where money flows the other way around. I posed the same question in 2005 or 2006 to the team then drafting the Portuguese Public Contracts Code (which regulates procurement above and beyond EU requirements) about similar land deals after witnessing first hand some trainwreck examples of horrible practice.

2. PPP trouble dans la France

Again, I remember another discussion (this time in 2009) sponsored by the Commission where PPPs were being bandied around as the best thing since sliced bread. Being a killjoy I argued that they have significant issues such as information asymmetry, regulator capture and the like, problems we saw in Portugal. One of the respondents happened to be the head of the PPP observatory in France who remarked drily that "the Portuguese have no idea how to run PPPs." Oh, well...

3. Should we have Procurement Ombudsmen in Europe like Canada does?

I think so, and have defended it since 2012. In some countries (UK, Ireland) there are not enough legal challenges in procurement, whereas in others (Portugal, Spain), whole court systems have ground to an halt due to an avalanche of procurement related cases.

4. How good (and EU compliant) is the Slovakian procurement law?

Not much it appears, but I will reserve passing judgement until I talk with some local colleagues.

Public Contracts Regulations 2015 - Regulation 1

As promised yesterday, myself and Albert Sanchez-Graells are kicking off 122 days of running commentary on the new Public Contracts Regulation 2015 which transpose the Directive 2014/24/EU to (part of) the UK.

Before diving into Regulation 1 I would like to make a couple of comments regarding the style and timing of transposition.

Transposition style

As with the previous Regulations, the Government opted to more or less copy and paste the Directive into national law. There are a few sections that do not come from the Directive itself (ie, Chapter 8) but by and large we are talking about of taking the content of the Directive and present it on a “legal” format/style similar to other laws of the country. In my civil law mind I still find it easier to understand the Directive than the transposition even though the content is fairly similar.

The larger point to make here, however, is that by transposing the Directive by simply copying and pasting it, the Government missed the opportunity to fill in the blanks and/or solve any discrepancies left in the original. This produces the benefit of ensuring a degree of real harmonisation with other Member States that followed a similar approach. The caveat of course is that any unclear provision in the Directive will remain unchanged in the national law which compounded with copious amounts of guidance, guidelines and suggestions which will surely follow will make for significant differences in practice. Again, to my civil law mind it made more sense to try and solve those issues directly in law instead of patching them up with guidance further down the line. Personally, between certainty and flexibility, I mostly prefer the first. This is the approach taken in Portugal and Spain for example, where successive procurement Directives are woven into national law, albeit with varying degrees of success and confusion!

If this “light transposition” will make the procurement regulations for England and Wales be similar to some of the other Member States, it remains to be seen how comparable will it make to Scotland. Procurement is a devolved power in Scotland and the Scottish Government is now in the process of transposing the Directive. As both Governments have very different policies for procurement (just think about Community Benefits and what it means in Scotland vs in Central Government) I would not be surprised if both sets of Regulations diverge a lot more than the outgoing ones. I think that looking into the performance of cross-border tenderers over the next few years (ie, English companies in Scotland and vice-versa) will make for a nice research project a few years down the line.

Timing

The second preliminary point I would like to point out to is the timing. As far as I know, the new Public Contracts Regulations 2015 is the first transposition of Directive 2014/24/EU (please feel free to correct me in the comments). Denmark is not far behind but I do not think they are there yet.

Why this sudden rush to get a new law out less than 11 months after the Directive’s publication? The cynic's view can only be that Central Government wanted to get it out of the door before the general election of May 7th, 2015. The actual laying date is an indication of this intention: February 5th is exactly 3 months and 2 day before the election date, pretty much right before the cut off date of the last 3 months of Parliament.

The timing may indicate the fear that the current Government will not be in power come May or an intent of Francis Maude (Minister for the Cabinet Office) in ensuring its legacy as he will be standing down in May as well. The real reason is less important than the consequences: we will be saddled with these Regulations for the foreseeable future. Yes, they can be amended by the next Parliament, but the stake is already firmly planted in the ground that “this is it” in terms of transposition.

It is no surprise then that to comply with the timings Government decided to go for the copy & paste approach instead of a more considerate approach. However, the rush shows some cracks in typos and minor mistakes (there is one right in Article 2).

As an alternative to the full transposition the Government could have done what France did, by transposing temporarily some bits of Directive 2014/24/EU it considered important, while taking its time before undertaking the complete job.

With this interlude out of the way, let’s talk about Regulation 1 then.

Public Contracts Regulations 2015 - Regulation 1 Citation, commencement, extent and application

In addition to the transposition rush, Regulation 1 states that most of the contents will come into force before the end of the month. This is a very short time frame to let contracting authorities and the market now about what is changing and adapt practice accordingly. One can argue that we are mostly talking about the Directive as it was published last year so the rules are not entirely new or unexpected but I digress.

There are a few exceptions to this short vacatio legis though. For example paragraph 3 states that rules on communications and e-certificates of Regulation 22 and 61 come into force only in October 2018, except in the cases where the contracting authority is trying to use electronic means to shorten the usual time limits of a procedure (26th of February) or for central purchasing bodies (18th April 2017). In my view, the new rules on communications are beneficial for both contracting authorities and suppliers and should have had a shorter transition period. I still remember the doomsday discourse in Portugal back in 2008 about the end-to-end e-procurement requirement in 2009 or 2010 (“no one is ready!”; “the fields will remain untended!”; “the sun will not rise tomorrow!") and when the switch was finally flipped, everyone adapted pretty quickly. I am certain the same thing would happen here even if the transition period was shorter.

Regulations 106, 108, 110 and 112 of Chapter 7 and 8 will also come slightly later into force for contracting authorities not performing their functions on behalf of the Crown (April, 2015). These regulations cover mostly contracts below thresholds and they constitute one of the major departures from the Directive 2014/24/EU as they are not covered by those rules.

The final part of Regulation 1 states the extent and application of Public Contracts Regulations 2015. As mentioned in the intro, Scotland is not covered at all. Furthermore, Part 4 (covering Chapters 7-9, which are not part of the Directive) do not apply to the contracting authorities in Wales and Northern Ireland whose functions are wholly or mainly devolved functions. It is actually a shame that this is the case as below-threshold procurement should be the main battleground for regulation and transparency for the next decade.

Albert's post is up here and full of good info.

That’s it for today. Join us tomorrow for Regulation 2.