IMPORTANT NOTES
The legal framework for public procurement includes:
- EU Treaty Obligations
- EU Procurement Directives, as implemented in national legislation; and
- European Court of Justice and national caselaw
The EU Treaty applies to all public procurement activity regardless of value, including contracts below the thresholds at which advertising in the Official Journal of the European Union is required and including contracts which are exempt from application of the EU Procurement Directives.
Fundamental principles of the Treaty include:
- Transparency - contract procedures must be transparent and contract opportunities should generally be publicised;
- Equal treatment and non-discrimination
- Mutual recognition – giving equal validity to qualifications and standards from other Member States, where appropriate
The EU Procurement Directives 2004/17/EC and 2004/18/EC set out detailed procedural rules which are based on the principles outlined in the EU Treaty and which are intended to support the single market by harmonising procedures for higher value contracts, ensuring that they are advertised in the Official Journey of the European Union.
- These Directives are given effect in Scots Law by The Public Contracts (Scotland) Regulations 2015 and the Utilities Contracts (Scotland) Regulations 2016
(i) Open Competition and Advertising
We have a legal obligation to provide adequate publicity in calling for tenders, even in circumstances when the procedural requirements of the EU Procurement Directives do not require advertisement in the Official Journal.
The main impact is the need to advertise more widely and to include tenders of a lower value than were previously advertised. The use of Public Contracts Scotland portal, and the Procurement Department external website will allow us to advertise our requirements and offer contracting opportunities with RoS in manner that complies with the Regulations.
Budget holders should be aware that, in some cases, this will result in a change in the way in which we can select suppliers and as such may lengthen the procurement process. Procurement staff will require budget holders and requisitioners to provide adequate advance notice of any requirement in order to ensure RoS complies with these Regulations (see Enforcement below).
Below is a précis of the Regulations. Procurement staff will provide advice on the interpretation and application of this policy.
(ii) Legal obligation to ensure adequate publicity for Public Contracts - Enforcement
Regulations mean that the award of a contract without any advertising or competition may be challenged by aggrieved suppliers in the Sheriff Court or Court of Session, even where the contract is itself exempt from the detailed advertising and procedural requirements in the Scottish Regulations.
It is for individual contracting bodies to decide whether advertising is required (and in what form) and to defend their decisions as necessary. Decisions which are documented and based on legitimate business needs and objective criteria are likely to be defensible. Decisions which are not documented, are arbitrary or which are based solely on convenience to the contracting body or a long standing relationship with a particular supplier is unlikely to be defensible.
(iii) Advertising
a) RoS’s procurement policy requires that Value for Money must be sought in all procurements, and that this is to be achieved through competition unless there are compelling grounds to the contrary. This is likely to involve some degree of publicity – which may range from seeking a number of quotations, to regional/trade/website advertising. In addition, increased publicity of below-threshold contracts has been implemented in an attempt to encourage participation of SMEs and ethnic minority businesses to bid for Public Sector business.
b) The Regulations do not lay down any rules on the form that an advertisement must take or for the means of publication. It is for individual contracting bodies to determine the form and means of publication taking into account the value of the contract and the extent to which it is likely to be of interest to the market. The Scottish Government has set guidelines that recommend any proposed purchase with a value in excess of £50,000 must be widely advertised and RoS will comply with this guidance. In addition RoS have set a policy that advertising may be required for purchases with a value between £25,000 and £50,000. In all instances of proposed purchases with a value exceeding £25,000 individuals must contact the Procurement Department for advice and support prior to embarking on such an exercise.
c) Publication on RoS’s website and the Public Contracts Scotland portal or on recognised websites and portals created for the purposes of publicising contract opportunities (including the various commercial sites) will usually be enough to ensure “adequate publicity”.
d) Other means of advertising could include publication in relevant trade journals or specialised publications and also in national newspapers.
e) In all cases, the method of publication should reflect the relevance of the contract to the Internal Market. For example, where a requirement is likely to be only of interest to small, local firms, publication in a local newspaper may suffice. On the other hand, an advert in a local newspaper is unlikely to constitute “adequate publicity” for a high value service contract. As a rule of thumb, the greater the value of the contract or market interest in the contract, the greater the coverage of the advert should be. In all cases, the form of advertising should be sufficient to allow interested companies a reasonable prospect of identifying the opportunity through their own market research.
(iv) Level of Detail to be Publicised
The level of detail contained in the advertisement should be sufficient to enable prospective suppliers to decide whether they are interested and should be proportionate to the value and complexity of the requirement. In most cases the requirement will be satisfied by the provision of a short description of the essential details of the contract to be awarded and of the award procedure, e.g. lowest price or Most Economically Advantageous Tender (MEAT) which would include publishing the relevant evaluation criteria (and where appropriate an approximate value of the contract), together with an invitation to contact the contracting body in order to obtain additional information.
(v) Specifications
Great care must be exercised in setting/accepting all or any technical or other specifications as they will form the basis of a contract which will be legally binding.
(vi) Acknowledgement of Invitation to Tender
Where the ePS Electronic Tendering system is not being used and when considered appropriate, sets of 'tender' documents issued to potential sources of supply should also include some form of instruction asking the bidders to email (or fax/post) an acknowledgement of receipt.. This arrangement helps protect RoS in that evidence exists to show that the documentation was issued to and received by the potential supplier.
(vii) Use of Tenders
a) Tender documents must be issued for all major purchases with a value exceeding £25,000 and in the case of purchases exceeding £50,000 sealed tenders may be required including the hiring and leasing of goods, services and works contracts.
b) Where the aggregated annual (or term of the contract, including options to extend) requirement for similar types of goods or services is likely to exceed the current (January 2016) EU Threshold of £106,047.00 (excluding VAT) then the Procurement Department must be advised at the earliest possible opportunity in order that RoS is fully compliant with The Public Contracts (Scotland) Regulations 2015 and the Utilities Contracts (Scotland) Regulations 2016
c) The minimum number of tenders required (normally 3) must be related to the approximate value (ex VAT) of the proposed order or contract. When pre-defined threshold values are reached then EU legislation will regulate all aspects of the tendering process. RoS has set the financial limits above which the following actions contained in Overview of Procurement Procedures must be followed.
(viii) Tenders.
Each set of Invitation to Tender documents shall, in all respects, be uniform and contain details of technical and other specifications and must also include a copy of appropriate set of RoS standard Terms and Conditions of Purchase (or any amended Terms and Conditions as approved by Legal Services) [see Appendix B],
(ix) Competition Levels
Note: More detailed information on Competition Levels can be found in Appendix C
(x) Non Competitive Action (NCA)
It is RoS policy that goods, services and works must be bought by genuine and effective competition. Non Competitive Action (NCA) is only granted in exceptional circumstances. It is strictly limited to situations where competition is not deemed appropriate.
A member of Procurement staff must be consulted about any proposal to award a contract without competition. NCA procurements must be approved, in advance, by Head of Procurement. Add link and annex.
NCA will only be approved when a genuine business need exists which outweighs the need to compete the requirement. All evidence in support of NCA must stand up to scrutiny or challenge by a potential supplier
The Application for Non Competitive Action form must be completed and submitted by email with any supporting documentation to the appropriate approver:
Below £10,000 | Head of Procurement |
Above £10,000 | Deputy Keeper / Accountable Officer |
These values are exclusive of VAT and are for the total duration of the contract (including any extension periods).
(xi) Formal challenges/complaints
Regulation 47 of the Public Contracts (Scotland) Regulations 2015 and Regulation 44 of the Utilities Contracts (Scotland) Regulations 2016 allows suppliers to bring proceedings in the Sheriff Court or Court of Session against contracting authorities which have infringed their obligations to comply with the Regulations, or any other enforceable European Community law provision which may be relevant to awarding a public contract.
Any individual may bring an alleged breach of the EU Procurement Directives to the attention of the European Commission, In the event of proceedings by the Commission against a Scottish contracting authority, Scottish Government will co-ordinate the UK response under the arrangements set out in a subject specific Concordat on public procurement.