Public Contracts Regulations: everything you need to know

Written by: Juli Lau | Published:

The result of the EU referendum has thrown into question the future of the procurement regime in the UK. However, until the UK has actually withdrawn from the EU, the Public Contracts Regulations 2015 remain in force and the procurement rules are unchanged. Juli Lau explains the key aspects of these rules

According to Regulation 53 of the Public Contracts Regulations 2015, at the same time as advertising a procurement in the Official Journal of the European Union (OJEU), contracting authorities must also make procurement documents available online.

Procurement documents are defined in the Regulations to include “the contract notice, the prior information notice where it is used as a means of calling for competition, the technical specifications, the descriptive document, proposed conditions of contract, formats for the presentation of documents by candidates and tenderers, information on generally applicable obligations and any additional documents”. This has commonly been interpreted to mean documents relating to all stages of the procurement, but authorities are sometimes unable to provide these at the outset.

On the other hand, the Crown Commercial Service in its Guidance on electronic procurement and electronic communication’ considers that the meaning of ‘procurement documents changes as a procurement progresses, and in the early stages, fewer of the documents, if any, would be included. Some in the industry are hesitant to adopt this approach, and it remains untested in the courts.

The crux of the matter and the intention behind Regulation 53 is that the contracting authority must provide sufficient information at the outset of the procurement to allow potential bidders to make an informed decision about whether to participate. In light of this, as a minimum it is advisable to:

• Make available at the same time as the OJEU notice all pre-qualification documentation and background information about the procurement.

• If possible, publish a draft invitation to tender and draft contract.

Bidders who suspect a breach of Regulation 53 must commence proceedings within 30 days of knowledge of the breach, which in practice would probably start running from publication of the OJEU notice.

Thirty days

• Proceedings for any procurement breach must be commenced within 30 days of the date on which the claimant knew or ought to have known that it had grounds for making a claim.

•Where the claimant is seeking for a contract to be declared ineffective by the court, it has 30 days from the date of the contract award notice or standstill letter, or where none is published, six months from the date of contract signature, to commence proceedings.

Contract variations

Regulation 72 codifies the extent of modifications that can be made to an existing contract without running a fresh procurement:

1. The contract includes a “clear, precise and unequivocal review clause” which prescribes the scope and nature of, and the conditions for, permitted changes, and which must not alter the overall nature of the contract.

2. Additional works, services or supplies are needed, and a change of contractor cannot be made for economic or technical reasons and would cause significant inconvenience or substantial duplication of the authority’s costs. The change must not increase the contract value by more than 50%, and the authority must publish a notice in the OJEU when relying on this permission.

3. Unforeseen circumstances arise which a contracting authority, acting diligently, could not have foreseen. The overall nature of the contract must not

be altered and its value must not increase by more than 50%. The authority must publish a notice in the OJEU when relying on this permission.

4. A new contractor replaces the original contractor, specifically as a result of “corporate restructuring, including takeover, merger, acquisition or insolvency”, or where envisaged in an unequivocal review clause.

5. The modifications are not substantial, which for these purposes means:

• the contract becomes materially different

• had the modification been implemented initially, other candidates or tenders would have been accepted

• the economic balance shifts in favour of the contractor

• the scope of the contract extends considerably

• the contractor is replaced but not as a result of corporate restructuring or an unequivocal review clause.

6. The value of the change is below the relevant minimum threshold and is less than 10% of the contract value (for supplies or services) or 15% (for works), and does not alter the overall nature of the contract. For multiple changes, the cumulative value of the changes is the relevant
value. RWW

Juli Lau is an associate with Sharpe Pritchard LLP


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