Procurement Pulse UK – September 2023Global Government Contracting: Insight Series
This is the Procurement Pulse, DLA Piper’s bulletin for clients with an interest in developments in public procurement law. In this issue we report on recent UK case-law, policy and legislative developments and the entry into force of the EU Foreign Subsidies Regulation. We also provide an update on materials added to Global Government Contracting, our online platform which supports businesses to source and win new government contracting opportunities, and supports governments, and other regulated entities, to do business with the private sector.
Recent Court Judgments
English High Court Decides that Contract for Enforcement of Debts is a Concession Contract and Grants Summary Judgment
In this case the claimant, the incumbent provider, challenged the award of a contract for the provision of debt enforcement services by a contracting authority to another supplier. The claimant argued that the Public Contracts Regulations 2015 (PCR 2015) applied and that the award was unlawful on several grounds within the PCR 2015. The contracting authority opposed this argument and sought summary judgment on the basis that the contract was not a public contract but a below threshold concession contract to which the Concession Contracts Regulations 2016 (CCR 2016) applied. The court agreed with the contracting authority. It held that the contract was a "concession contract" under the CCR 2016 and that none of the obligations or remedies within the PCR 2015 were relevant. The application for summary judgement was therefore granted. The decision is important and will be of interest to contracting authorities and suppliers who need to consider whether a contract is governed by the PCR 2015 or the CCR 2016 in future.
Policy, Guidance and Other Developments
Procurement Bill Progress
The Bill was passed with amendments by the House of Commons in June. The Bill is now with the House of Lords for further consideration. The Lords are due to consider the Bill as amended on 11 September 2023. Various publications relating to the Bill have been produced over recent weeks, including:
- Cabinet Office consultations on draft regulations to implement the Bill. Part 1 of the consultation was published on 19 June 2023 and focused on areas of the Bill that require lists, calculations, or further definitions to be used in practice. It closed on 28 July 2023. Part 2 was published on 17 July 2023 and focuses on the transparency provisions and notices contracting authorities will use to fulfil their legal requirements under the Bill. It closed on 25 August 2023. The same consultations have also been published by the Welsh Government.
- The Welsh Government published a notice flowchart to assist stakeholders across the Welsh public sector understand which notices are required at different stages of the procurement lifecycle under the new procurement regime.
We have published articles discussing the cabinet office consultations here and the progress and future timeline of the Bill here. We will also shortly launch a UK public procurement reform webpage which will collate expert analysis on the new procurement regime, commentary on developments and key materials and resources.
Economic Activity of Public Bodies (Overseas Matters) Bill
The UK government has recently introduced the Economic Activity of Public Bodies (Overseas Matters) Bill to the UK Parliament. The Bill seeks to ban public authorities from imposing their own boycott or divestment campaigns against foreign countries and territories. Clauses 14 and 15 of the Bill set out the Bill's relationship with procurement legislation and the related changes to local government contracting restrictions contained in the Public Procurement Bill. The Bill has now had its first and second reading and has been sent to the Public Bill Committee which is expected to report to the House of Commons by 14 September 2023. A House of Commons library research briefing explaining the main clauses of the Bill is available here.
New Procurement Policy Notes
Several new procurement policy notes have been issued by the UK, Scottish and Welsh Governments:
- PPN 06/23 setting out which organisations are in-scope of the Commercial Playbooks and how their principles should be applied.
- PPN 07/23 providing details of the Government Security Classifications Policy which was updated on 30 June 2023.
- PPN 08/23 setting out Standard Contracts and their use by in-scope organisations.
- SPPN 3/2023 on supporting innovation through procurement.
- WPPN 01/23 on sustainable risk assessments in procurement.
Scotland: Consultation on the Impact of the Procurement Reform (Scotland) Act 2014
The Economy and Fair Work Committee in the Scottish Parliament has launched a consultation seeking views on what the experience of bidding is like since the introduction of the Procurement Reform (Scotland) Act 2014. The consultation closes on 3 October 2023.
Wales: Social Partnership and Public Procurement (Wales) Act 2023
The Welsh Government has issued a written statement announcing the commencement arrangements for the Social Partnership and Public Procurement (Wales) Act 2023.
EU: Foreign Subsidies Regulation to Enter Into Force
The Foreign Subsidies Regulation contains a set of rules for addressing distortions caused by foreign subsidies granted by non-EU countries to businesses that are active in the EU. One rule introduced by the Regulation is a public tenders notification requirement. The notification obligation applies from 12 October 2023. In terms of this rule a participant in a public procurement procedure launched after 12 July 2023 must notify its “foreign financial contributions” to the contracting authority with its tender when:
- It is tendering for a works, supply or services contract or a concession estimated to be worth at least €250 million, and
- It (or its holding companies, any subsidiary companies without commercial autonomy and/or its main sub-contractors) was granted foreign financial contributions of at least €4 million per third country over the three preceding years.
“Foreign financial contributions” cover any form of direct or indirect contribution from non-EU governments or any public or private entity attributable to a third country. They can include direct grants, interest-free or low-interest loans, tax incentives, state-funded R&D, government contracts, and grants of exclusive rights without adequate remuneration.
The Regulation provides for fines of up to 1 % of aggregate turnover for incorrect or misleading information in the notification, and up to 10 % of aggregate turnover for failure to notify or circumvention of the requirements.
The template filing form was issued within the European Commission Implementing Regulation (EU) 2023/1441 on 10 July 2023.
Global Government Contracting Online: New Materials
DLA Piper has recently launched Global Government Contracting Online. The platform contains information about how to find procurement opportunities in 77 countries across Africa, Asia-Pacific, Europe and the Americas, the structure and content of their procurement laws and key in-country resources and publications. We have recently uploaded a spotlight interview with Roddy Maciver, Executive Legal Manager, Glasgow City Council to the platform.
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