Academies Briefing Note - Procurement
Public procurement expert Leigh Child examines the procurement responsibilities of Academies.
An Academy is a ‘contracting authority’ for the purposes of the EU Public Sector and Remedies Directives and the UK Public Contracts Regulations 2006 (as amended) (the Regulations).
Therefore, with the exception of a limited number of exempt services , any procurement of contracts for goods, services or works by an Academy must adhere to EU procurement law and the Regulations, if the contract value exceeds the financial threshold set out in the Regulations (a regulated contract).
As at 1 January 2012, the specified thresholds are:
• £173,934 – for public goods contracts as listed in Schedule 5 of the Regulations – ‘goods’ includes items such as minerals, metals, various materials, pharmaceutical products etc.
• £173,934 – for public services contracts as listed in Schedule 3, Part A of the Regulations – ‘services’ includes services such as transport, telecommunications, financial, IT, consultancy etc.
• £4,348,350 – for public works contracts as listed in Schedule 2 of the Regulations – ‘works’ includes activities such as construction, various trades etc.
These thresholds will be updated in January 2014.
It should be noted that under the Regulations, an Academy may be required to aggregate the value of any related contracts entered into for a ‘single requirement’ i.e. the values of bi-annual renewable contracts for school supplies would need to be added together. This is to prevent the splitting of an above threshold contract into smaller lots to avoid the Regulations.
A regulated contract must be procured following one of the procurement procedures set out in the Regulations. The main procedures are open, restricted and competitive dialogue. There is a fourth procedure, negotiated, which is less commonly used and is not covered by this note. The choice of procedure will depend on the type and scope of the contract to be procured. Where the contract object is more easily definable by the Academy, then the open or restricted procedures are more appropriate. Typically, competitive dialogue is used for more complex contracts requiring specification or design input and price negotiations with the tenderers.
All the procedures are commenced by the publication of a contract notice in the Official Journal of the European Union (OJEU) advertising the Academy’s requirement. The notice has a prescribed format and must contain certain information.
Thereafter, the Academy must follow the procedural requirements for its chosen procedure as set down in the Regulations.
Various documents are issued to interested tenderers at different stages of the procurement process and both the timing of this disclosure, along with the content of the documents, must adhere to the requirements of the Regulations. For example, a pre-qualification questionnaire is commonly used to assess the objective criteria about a potential tenderer to ensure it is technically capable of providing the services/goods or carrying out the works required, as well as checking its financial and organizational status, namely, that it is financially sound, embraces equal opportunities etc. These are known as the selection criteria and whilst the Academy can specify certain minimum levels, the Regulations set out what information may be requested for the assessment. Finally, an Academy is required to reject any interested tenderer organisation which has been prosecuted for certain criminal offences such as conspiracy, fraud or corruption.
Under the restricted and competitive dialogue procedures, only once a firm is considered suitable for the contract provision will it be asked to submit a tender. Under the open procedure, although each bidder is assessed under the selection criteria, this information and the tender are provided in one submission.
The requesting and evaluating of tenders using award criteria is subject to various additional requirements. There is an abundance of case law clarifying how and when award criteria can be used during a procurement along with how and when those criteria must be disclosed to bidders. An Academy must ensure that there is no cross-over or duplication between selection and award criteria.
The Regulations also set out time limits and de-briefing obligations that the Academy must observe for each stage of the procurement - the most important of which is the ‘standstill period’ requiring a 10 day stay following the contract award but prior to contract signature. In certain circumstances, failure to observe the ‘standstill period’ could result in the contract being set aside by a court. Once the standstill period has finished, and assuming there has been no challenge raised, the Academy can enter into a contract with its chosen bidder.
Failure to carry out a compliant procurement for a regulated contract may give rise to a legal challenge by an aggrieved tenderer against the Academy, which if successful, could result in the Academy having to re-run part or all of the procurement, pay damages to an aggrieved bidder, cancel the contract or pay a fine.
Our role is to guide our client’s through these various procedures and requirements so they need not intimidate you!
Despite the procedural requirements, there are clear benefits to an Academy in carrying out its own procurement exercise, not least that it allows the Academy to ensure that the resulting contract is drafted to meet its own specific requirements.
However, there are a number of different services available whereby both public and private resources provide Academies with the opportunity to buy goods and services from pre-procured frameworks. These frameworks are essentially a panel of providers procured following EU law and the Regulations. These pre-procured frameworks allow an Academy to enter into a contract with one of the panel members without having to run its own procurement process. Often, however, the framework agreements are made up of larger, national companies and so may not sit well with an Academy’s own localism agenda or bespoke requirements. Additionally, an Academy is unable to negotiate the form of contract to be entered into as this is set at the point the provider is appointed to the framework.
Further information on the availability of these frameworks can be found at:
Please note this briefing note is meant as a basic guide on the procurement procedures and in order to avoid or reduce the risk of legal challenge, it is important that any procurement is run strictly in line with the requirements of EU law and the Regulations. An Academy should seek independent legal advice on any planned procurements.