Procurement Rules Progress Update

At the end of last year, the European Commission issued draft proposals to modernise the EU Procurement Directives. The aim to simplify the Directives; to assist the participation of small and medium-sized enterprises and to make better use of public procurement in support of common societal goals was strongly welcomed by NAVCA.

NAVCA evaluated and commented on the proposals and has been working with other voluntary sector support bodies to influence at European level. The UK government has been involved in the main EU negotiations, which are now at roughly the halfway point and has published an update.

The area that is possibly of most relevance to local voluntary sector organisations is the proposal to remove the distinction between Part A and Part B services, while recognising that the full procurement rules need not apply to many health, social and education services. It is proposed that a very light-touch regime be implemented for these services and for those below EUR 500,000 the procurement directives should generally not apply. NAVCA supported this proposal, with the proviso that all relevant community based services are included in the new light-touch regime. The Presidency has suggested that a wider range of services should be included and this will be focused upon in the next round of discussions. NAVCA will continue to campaign for this to happen.

The reason the above issue is so significant is that many of the services delivered by local voluntary sector organisations would be removed from the EU procurement regime, which would hopefully reduce risk adverse procurement that does not make use of the flexibilities available.  Where the rules did apply, some positives that have been agreed during negotiations include:

• increased flexibility in the use of negotiation in tendering
• increasing the use of self-declarations so only the winning bidder would have to produce required certificates and documents.
• The encouragement to break large contracts into lots to encourage SMEs. However, it is likely that this decision will be left to the contracting authority, rather than it being a requirement.

On the other hand, not so positive is the agreement to reduce minimum timescales for responding to and preparing tender documents, as many local voluntary sector organisations already struggle in this area.

Another area that will no doubt be welcomed is that poor performance under previous contracts will be explicitly permitted as grounds for exclusion. Amazingly this isn’t the case under the existing Directives, and results in organisations continually winning large contracts after they have failed to deliver on previous ones.

It is also worth mentioning that the revised Procurement Directive text that has been published, taking on board the progress made in the negotiations so far makes explicit reference to grant funding. It says that the mere financing, in particular through grants, of an activity does not usually fall under the procurement rules. In the section discussing social services to the person, the text reminds that “Member States and/or public authorities remain free to provide these services in a way that does not entail the conclusion of public contracts, for example through the mere financing of such services …” A clear indication that grant funding remains a legitimate form of funding in appropriate circumstances.

During the time it takes to continue these negotiations and implement the new Directives, NAVCA will be working with members and commissioners to support them to develop more appropriate ways to secure local services.