Public Contracts Regulations 2015 - Regulation 35

Regulation 35 - Electronic Auctions

On Regulation 35 we can find the rules establishing how electronic auctions can be used within public procurement. These are very prescriptive rules, particularly when compared with the ones for framework agreements and dynamic purchasing systems. Regulation 35 transposes Article 25 and overall it tries to clarify the content by changing the structure in ways similar to most of Regulations we covered so far.

Electronic auctions allow a contracting authority to introduce a phase in a public procurement procedure (open, restricted or competitive procedure - paragraph 4: framework agreements, DPS - paragraph 5), after full evaluation of tenders and whereby tenderers are invited to bid down their prices or change quality elements (paragraph 1) that can be measured objectively across all participants. Effectively, they allow for a modicum of competition or "negotiation" to be used in procedures where it is not usually accepted. With the caveat, of course, that contracting authorities know what they are doing and plan accordingly. Every time I hear that "we need more negotiation in public procurement" all I do is highlight that even the 2004/2006 rules already allowed for competitive dialogue, framework agreements, DPS and electronic auctions. The toolbox was already well stocked, which ties in with my long held view that the underlying "negotiation disorder" is more due to lack of capacity from people in the field than to the lack of actual tools to do that work.

By their nature, electronic auctions need to be done over an electronic platform and as such are subject to the vagaries of e-procurement adoption in the UK. Electronic auctions need to be disclosed from the start (paragraph 7) and can only be used if the technical specifications have been established with sufficient precision (paragraphs 4 and 5), hence my comment above about planning.

To use electronic auctions, contracting authorities must disclose the award criteria and the mathematical formula used to compute scores, once again underlining the need for planning and technical capacity by the contracting authority to understand this issues. Electronic auctions also force the contracting authority to be comfortable in disclosing a lot of information which they may not be inclined to do so otherwise, such as the relative position of each tenderer in relation to the others.

The enhanced transparency however does not extend to the identification of tenderers' identity (paragraph 25), in what I believe is a concession to competition worries that will make Albert smile (and that I agree with). Now, if only they had extended that crazy idea of taking care of competition in the competitive dialogue or framework agreements, that would have been great.

My good friend (and former colleague) Dr. Ama Eyo has written extensively about e-auctions in the UK and you can find an ungated paper she presented at a conference in 2012 here.