article
Procurement academy
18 October 2010
By reason of their financing, it is likely that academies will be
subject to EU public procurement law and, as such, will be required
as a matter of law to comply with the EU rules and principles
regulating procurement by contracting authorities.
The EU rules are designed to protect the European single market
by providing a means by which contracts for building projects and
for the supply of goods and the provision of services can be opened
up to contractors and suppliers across Europe. The way this is
achieved is by requiring contracting authorities to advertise
relevant contracts across the whole of Europe, and to invite
competitive tenders for them from suppliers.
The EU rules apply in their entirety to the procurement of
building projects, goods, and many services, and set out a series
of procedural requirements in relation to the way in which
competitive procurements are to be conducted - wherever the
estimated lifetime value of the contract in question exceeds a
specific financial threshold (currently £3,927,260 for contracts
involving building works, and significantly lower thresholds for
contracts involving goods and services). However, there are
differences in the way in which the rules operate as between
contracts for building works, goods, and services respectively.
Notably, not all services contracts are fully regulated: whilst
some services contracts must always be advertised at EU level
whenever the estimated contract value exceeds the applicable
threshold, others are only partly regulated – with the result that
they need not necessarily be advertised at European level, and may
indeed comply with the law if advertised only at a local level.
Nevertheless, whenever there is any potential for one of these
'Part B services' contracts to attract interest from providers
based in other EU member states, then they must still be advertised
to an extent sufficient to capture the likely level of
interest.
Even in cases where there may no requirement deriving from the
EU rules to advertise a particular contract (for example, because
it is a 'Part B services' contract or because it falls below the
applicable value threshold and in any event would not attract
foreign interest), academies themselves may specify particular
advertising requirements in their own constitutions in relation to
specific types of contract, or to any contract above a particular
likely value. They may also choose to specify an advertisement
requirement wherever the value of a particular contract is likely
to exceed a stated threshold – which may be much lower than the
thresholds prescribed by the EU rules.
The procurement rules now set out pathways for procurement via
various innovative means. Not all individual procurements need
start with an OJEU advertisement, even where fully regulated - and
there has never been a better time to look carefully at the ways in
which procurement could be made more efficient and cost-effective.
Government has singled out for particular focus the fact that
individual procurements, by contracting authorities acting on their
own, could often be avoided by procuring jointly with others.
With that in mind, academies may decide to purchase
collaboratively. A review of collaborative procurement across the
public sector, a joint report published in May by the National
Audit Office and Audit Commission, highlighted the benefits of
collaborative procurement, with the message that value for money
across the public sector would be improved if public bodies worked
together more effectively.
Commoditised or frequent requirements for straightforward
purchases such as bulk stationery or classroom equipment purchases,
and indeed some types of professional services, lend themselves
particularly well (though by no means exclusively) to joint
procurement pathways. For example, special framework agreements or
'dynamic purchasing systems' (which allow for electronic trading)
may be used, as long as they have been set up with a view to being
used by a sufficiently wide grouping of contracting authorities to
include academies – and, of course, as long as the products or
services required can actually be sourced via those agreements.
Care is needed in relation to the use of framework agreements
for purchasing, though. The OGC has just issued a procurement
policy note (PPN) which urges caution in the use of framework
agreements set up by private sector organisations, but which are
ostensibly open to contracting authorities to use. It is up to the
contracting authorities who decide to use these to make sure that
participating in those framework agreements does not place the
contracting authorities themselves in breach of the procurement
rules. This might happen if an Academy found itself purchasing via
an agreement that did not actually amount to a proper 'framework
agreement' as envisaged by the rules, by reason of how it had been
set up. It might also happen if an academy failed to ensure that
all of the purchasing activity was carried out with the express
authority of the academy itself.
This article was first published in
SecEd
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