News

OGC publishes guidance on the Regulations implementing the new Remedies Directive

Released on 08/01/2010

The Office of Government Commerce (OGC) has published comprehensive guidance on the new Regulations that affect procurement in the public and utilities sectors.

This guidance follows OGC's making of the amending Regulations in November 2009, which were necessary to implement the new European Directive on remedies in public procurement. Those amendments were achieved by two statutory instruments: The Public Contracts (Amendment) Regulations 2009 (SI No. 2992) and The Utilities Contracts (Amendment) Regulations 2009 (SI No.3100).

The amending Regulations bring about several important changes for new public procurements commenced on or after 20 December 2009. The changes follow two OGC led public consultations: the first elicited stakeholders' views on the policy choices available and the second provided draft Regulations and several policy options for comment.

A new penalty of ineffectiveness is introduced by the amending Regulations, which will enable the Courts to prospectively strike down contracts that have been awarded in serious breach of the procurement rules, for example where there as been a breach of OJEU advertising obligations.  Two other new penalties have also been introduced: civil financial penalties and contract shortening. 

The amending Regulations also provide for the automatic suspension of a contract award procedure whenever legal proceedings are started in respect of a contract award decision. 

The amending Regulations make some procedural changes to the requirements of the "standstill period", which is the time between the notification of a contract award decision and the point at which the contract is entered into. These include:

• The reasons for the award decision must now be released automatically to tenderers and candidates at the start of standstill, rather than upon request; 
• The duration of the standstill period must now take into account different means of communication, allowing more time for slower means; 
• A precise statement of the standstill period should be included within the standstill notice; 
• And the standstill period must now end on a working day.

OGC's new guidance describes the changes in detail, and provides advice on ways to mitigate the risks introduced by the new remedies regime. The guidance has been issued in 3 parts, all available on the OGC's Policy and Standards Framework:

Part 1: About the rule change, including transitional provisions.
Part 2: The new rules on the Standstill Period.
Part 3: The new remedies rules.   

For more information about the changes and guidance visit www.ogc.gov.uk

Notes to editor

Background
Public procurement is regulated by the EU, primarily through two directives published in 2004, one applying to the public sector (Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts) and another applying to the utilities sector (Directive 2004/17/EC coordinating the procurement of entities operating in the water, energy, transport and postal services sector).

These directives contain detailed procedural rules for the award of contracts, but they contain no provisions on remedies or enforcement i.e. what happens when the rules are breached.

Those provisions are contained in two separate directives (Directive 89/665/EEC on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts; and Directive 92/13/EEC coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors), collectively known as the "Remedies Directives" (again one applying to the public sector and one to the utilities sector), which have been in place for many years. Both the Procurement Directives and the Remedies Directives are transposed into UK law through one catch-all set of UK regulations for each of the two sectors: The Public Contracts Regulations 2006, and the Utilities Contracts Regulations 2006.

The new Remedies Directive (Directive 2007/66/EC amending Council Directives 89/665EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the award of public contracts "the new Directive") was published on 20 December 2007, with a deadline for transposition by all Member States within two years i.e. by 20 December 2009. The new Directive was adopted following a successful proposal by the European Commission to amend the existing Remedies Directives.

The new regulations that were made and published by OGC in November 2009, and the guidance that was published on 17th December 2009, apply to England, Wales, and Northern Ireland. The Scottish Government has implemented in a similar way but separately under Scots law.

About the OGC

The OGC is an independent office of HM Treasury, established to help government deliver best value from its spending. The OGC works with central government departments and other public sector organisations to ensure the achievement of six key goals:

• Delivery of value for money from third party spend;  
• Delivery of projects to time, quality and cost, realising benefits; 
• Getting the best from the government's £30bn estate; 
• Improving the sustainability of the government estate and operations, including reducing carbon emissions by 12.5% by 2010-11, through stronger performance management and guidance; 
• Helping achieve delivery of further government policy goals, including innovation, equality, and support for small and medium enterprises (SMEs); 
• And driving forward the improvement of central government capability in procurement, project and programme management, and estates management through the development of people skills, processes and tools.

OGC provides policy standards and guidance on best practice in procurement, projects and estate management, and monitors and challenges departments' performance against these standards, grounded in an evidence base of information and assurance. It promotes and fosters collaborative procurement across the public sector to deliver better value for money and better public services; and it provides innovative ways to develop government's commercial and procurement capability, including leadership of the Government Procurement Service.

Media contact:
Michael Dunning, Media Relations Manager, OGC
T: 020 7271 1318
M: 07771 815245
E: michael.dunning@ogc.gsi.gov.uk

Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk