Many new regulations that demand attention

Euan Murray is a solicitor with Shepherd & Wedderburn. Picture: Dan Phillips

Euan Murray is a solicitor with Shepherd & Wedderburn. Picture: Dan Phillips

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Procurement and public contracts reform will force the industry to act fast, writes Euan Murray

For procurement professionals working or doing business in Scotland, 2016 is the year of procurement reform. Coming into force on 18 April are the two major pieces of legislation: the Public Contracts (Scotland) Regulations 2015 (the 2015 Regulations); and the Procurement Reform Scotland Act 2014 (the 2014 Act). Additionally, the Scottish Government has published the Procurement Scotland Regulations 2016, which seek to build on some of the provisions of the 2014 Act.

In this article we highlight the major developments which procurement professionals will have to get to grips with, and at speed!

The 2014 Act applies to Regulated Procurements which have a value of over £50,000 for services and supplies, and a value of over £2m for works contract. The 2015 Regulations applies to contracts above the following thresholds:

Schedule 1 Entities

Supplies£106,047

Services£106,047

Works£4,104,394

Other Contracting Authorities

Supplies£164,176

Services£164,176

Works£4,104,394

Prior Information Notices

Supplies£589,148

Services£589,148

Works£4,104,394

Small Lots

Supplies£62,842

Services£62,842

Works£785,530

Conflicts of Interest

Contracting authorities must take appropriate measures to prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures. These include any situation where relevant staff have either directly or indirectly a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence.

Two new procedures, likely to add flexibility to procurements for the public sector have been introduced:

1. The Competitive Procedure with negotiation

2. Innovation Partnerships

From a private sector perspective this is likely to mean two new processes to get to grips with:

• The rules for using the Negotiated Procedure without prior publication of a notice have changed. Contracting Authorities often sought to rely on the extreme urgency provisions under the old procurement regime and this, in particular, will be more difficult under the new regime as the Regulations expressly state that the reasons cannot be attributable to the Contracting Authority.

• The 2015 Regulations emphasise the importance of division of large procurements into lots with a view to ensuring better access for SMEs. The new reporting requirements mean that reasons must be recorded where the Contracting Authority opts not to utilise lots.

• The 2015 Regulations provide for the use of the European Single Procurement Document, which is intended to make the PQQ process easier, and to standardise it across Europe. The rules relating to modifications of contracts during their term, which originated in case law, have been codified and are set out at Regulation 72. This is intended to make it easier for authorities to determine whether or not a variation is actually a separate, new contract, which should be tendered under the 2015 Regulations.

• Although the EU Directive, and the 2015 Regulations, remove the concept of Part B Services, they introduce a light touch regime for Social and other specific services. This also ties into provisions in the 2014 Act and will be directly relevant to many contracting authorities.

Setting these changes against the wider backdrop of Procurement Reform, the 2015 Regulations and the 2014 Act implement two distinct layers of procurement reform, both of which come into force on the same date. There are a number of significant changes and new responsibilities across the legislation; and the public sector will have to adapt to both new regimes simultaneously.

• Euan Murray is a solicitor with Shepherd & Wedderburn

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