Reforming the relationship: Guidance for charities and procurement teams on the Public Contracts Regulations

The new European Directive on public procurement seeks ‘a better integration of social and environmental considerations in the procurement procedures’. Certain changes have been widely publicised, but many may not be aware of the extent of its impact on the ability of purchasers to take social and environmental issues into account—nor of the implications for charitable organisations when bidding for public contracts. This briefing aims to prepare both parties for the opportunities it offers.

The new Directive came into force in April 2014 and requires EU Member States to implement the majority of its provisions by 18 April 2016. The UK government has now implemented these provisions into domestic law, publishing the Public Contracts Regulations 2015 (the 2015 Regulations) on 5 February 2015. The 2015 Regulations repeal the Public Contracts Regulations 2006 (subject to certain transitional provisions) and came into force on 26 February 2015.

What do the new rules aim to achieve?

Overall, the 2015 Regulations aim to remedy some of the perceived deficiencies of existing rules by simplifying the regime and providing more flexibility. They offer a less bureaucratic approach and the opportunity to negotiate more with providers, to encourage purchasers to take non-economic factors into consideration when carrying out their procurements, and to make it easier for smaller organisations such as charities to participate in the bidding process. In this way, it complements the Public Services (Social Value) Act (that sits alongside procurement law) and does not seek to replace it.

However, it is important to recognise that areas of ambiguity remain, and to inspire confidence when interpreting and applying the regulations, further clarity is required. We may need case law to remove some of this uncertainty. Yet, in time, as both the 2015 Regulations and the Social Value Act are applied more frequently, we hope all actors embrace the opportunities they present.

The purpose of this guidance

The aim of this briefing is two-fold: to help charities understand the changes brought about by the new regulations, and to illustrate to commissioners and procurement professionals how certain provisions can be used to help them achieve their outcomes by working effectively with charities and other SMEs. As a result, we hope that:

  • Charities and other voluntary sector providers anticipate and adjust to changes in existing procurement practices.
  • Charities and other voluntary sector providers better understand the framework within which commissioners and procurement teams are working, and engage with them in informed discussions about appropriate commissioning practices.
  • Procurement teams who see that certain practices make it harder for small providers, including charities, to participate in a procurement exercise, become aware that the new regulations provide flexibility that could work to expand the pool of potential providers.
  • Procurement teams recognise that the regulations present opportunities to improve the quality of services, by making it easier to consult on the service specification and assess bids based on quality as well as cost.