Public Procurement

Public Buyers Community Platform

A new Public Buyers Community Platform is intended to facilitate cooperation and knowledge-sharing between public buyers. It provides access to various communities of practice. It follows the recently launched Public Procurement Data Space which pools data on preparation of tenders, calls for tenders and outcome of tenders.

Electronic Invoicing

The Commission is conducting a survey until 30 June 2023 in the context of evaluating Directive 2014/55/EU on electronic invoicing in public procurement. It seeks feedback on the uptake of e-invoicing, efficiency of the Directive in meeting is objectives and future e-invoicing needs.

Single Market Emergency Instrument

The EU is developing a Regulation establishing a Single Market emergency instrument, aimed at addressing obstacles to free movement of goods, services and persons in times of crisis and shortages of crisis-relevant goods and services. Part V would provide for procurement of goods and services of strategic importance and crisis-relevant goods by the Commission on behalf of Member States during certain periods. The Council has agreed its negotiating position and the next step is for the Parliament to agree its position.

Economic Operators from Third Countries

In Case C-266/22, a Romanian authority procuring inter-regional electric trains and services excluded a bidder on the basis that the lead entity’s registered office was in China.

The Bucharest Court of Appeal referred questions for preliminary ruling, which Advocate General Rantos answered as follows: Articles 2(1)(10), 18(1), 25 and 49 of Directive 2014/24 should be interpreted as meaning that economic operators from third countries who are not signatories to the conventions referred to at Article 25 of Directive 2014/24 do not enjoy the rights provided by Directive 2014/24, and cannot therefore validly invoke an infringement of the principles of equality and non-discrimination, legal certainty and protection of legitimate expectations provided by EU law.

Procurement Bill

It is anticipated that the Procurement Bill may pass into law before the summer recess. However, Regulations will be required to commence various parts of the Act and to provide for transitional arrangements, a process which may continue into early 2024. The UK Government has also indicated that it will give a minimum of six months’ notice before go-live of the new legislation.

Changes to Procurement Rules

Public Procurement (International Trade Agreement) (Amendment) Regulations 2023 effect changes to UK procurement regulations. While the changes are required by Free Trade Agreements between the UK and Australia and New Zealand, they apply to all above threshold procurements no matter which country the supplier is from. An accompanying Procurement Policy Note PPN 05/23 is available. Separate provision is made for Wales (here and here). The main changes provide that:

where the value of the contract cannot be estimated, it is deemed equal to the relevant threshold for that type of procurement such that the full public procurement regime applies,
contracting authorities cannot terminate awarded contracts in a manner that circumvents obligations in the UK-Australia Free Trade Agreement,
prior information notices and periodic information notices cannot be used as a call for competition under the Public Contracts and Utilities Regulations.

Welsh Social Partnership Act

A new Social Partnership and Public Procurement (Wales) Act introduces several duties on certain public bodies in Wales, including a duty to consider socially responsible public procurement when carrying out procurement, to set objectives in relation to well-being goals and publish a procurement strategy, and to carry out contract management and reporting duties to ensure that socially responsible outcomes are pursued through supply chains.

Court dismisses challenge to a Contract Modification

In James Waste Management LLP v Essex County Council ([2023] EWHC 1157 (TCC)), the Council had a Waste Handling Contract with Veolia. There was a separate Framework Agreement with several parties, including James Waste, which was intended to complement the Veolia contract.

Under the Framework, James Waste had 18-month contracts under which they received a price per tonne for waste processing and disposal, though there was no minimum tonnage guarantee.

When the contracts ended, James Waste received further contracts and another company, Enovert, received contracts under a different Lot. Enovert’s sites were further than James Waste’s sites from the authorities delivering the waste, which caused problems for the authorities.

To address the issue, the Council sought to modify the Veolia contract (through an Authorised Change Request) to include a sixth transfer station at which Veoilia would receive and process waste, and then provide haulage services to an Enovert site.

Before the Authorised Change Request was executed, James Waste issued proceedings alleging that the Authorised Change Request and award of contracts to Enovert were unlawful.

The Court considered the legislation setting out circumstances in which a modification to a contract is permitted. (In Ireland, see Article 72 of Directive 2014/24/EU and Section 72 of S.I. 284/2016.) In particular, it considered the gateway at Articles 72.1(e) and 72.4, which permit modifications that are not substantial, that is where they do not render the contract materially different in character from the one initially concluded.

The Court dismissed James Waste’s challenge. The modification did not render the contract materially different in character. The contract had contemplated additional sites which might include further transfer stations, which showed that some flexibility was intended. The modification was a short-term contingency. The additional income was 2% of yearly income or 0.26% of entire income under the contract. The modification did not lead to “additional services in the overall scheme of things” (paragraphs 114-123).

Further, the modification had not considerably extended the scope of the contract. “Considerable” should be interpreted in a common-sense way (paragraphs 124-127).

Further, the Court could not conclude on the balance of probabilities that there was a real prospect that another tenderer would have won the putative counterfactual procurement (paragraphs 128-159).

Further, there had not been a change in the economic balance of the contract in favour of Veolia. The Court did not accept the price in the modification was uncommercial. (paragraphs 160-187).

It is also worth noting that the gateway at Article 72.1(a) could not be relied on by the Council because it had not complied with parts of the procedure in the contract when making the Authorised Change Request (paragraphs 190-218).

The Court also dismissed the challenge to the award of the call-off contract to Enovert. James Waste had argued that Lot 1 was for waste from a specific MBT facility, which was not operating, but the Court’s interpretation was that the scope of Lot 1 was wider (paragraphs 219-250).

The case turned on the evidence, but the Court made general observations.

The gateways at Article 72.1 should be interpreted narrowly, though not so narrowly that they are rendered ineffective (paragraphs 44-45).
While it is for the authority to identify the gateway on which it wishes to rely, it is for the claimant to establish on the balance of probabilities that the gateway relied on by the authority does not apply (paragraphs 46). James Waste argued that the authority would have to raise some evidence which would prima facie go to the establishment of the relevant gateway. The Court considered it did not have to decide this point. However, had the point been required to be settled, it would have held that an authority wishing to invoke a gateway does not bear an evidential (or any other) burden of proof in relation to it (paragraph 69).