A lot has been said about the Procurement Act 2023, but there hasn’t been much focus on the Public Contracts Regulations 2015 (PCR 2015). This is largely because they remain unchanged under the new Act and this is because they are still relevant in public procurement, meeting or providing for the Act’s aims, including transparency and fairness in the procurement process.
Crucially, Public Contracts Regulations 2015 simplified the procurement process for buyers by removing a lot of barriers, like red tape, and improving the supplier selection and contract awards process.
Crucially, the Procurement Act simplifies the procurement process for suppliers by removing a lot of red tape and encouraging SMEs to enter the public sector procurement market.
We’re going to delve into the public procurement framework and its key regulations.
Your Guide To UK Procurement Obligations
Two of the more important policies in the Public Contracts Regulations involve financial thresholds and procedures. Thresholds for UK procurement regulations indicate price restrictions above and below certain amounts. They are adjusted every two years.
Let’s take a closer look at the thresholds
Several factors come into play when calculating financial thresholds, including the purpose of the contract – whether it’s for supplies, services, or public works. The type of contracting authority also plays a role.
PCR 2015 applies fully when the contract value is equal to or greater than the relevant threshold. The calculation includes VAT.
The current thresholds came into effect on the 1st of January 2024.
They apply to:
1) Contracting authorities specifically listed in Schedule 1 of the Regulations
- Supplies: £139,688
- Services: £139,688
- Works: £5,372,609
2) Other public sector contracting authorities
Supplies: £214,904
Services: £214,904
Works: £5,372,609
Below threshold contracts
Below threshold procurements are covered in the Public Contracts Regulations 2015, but they are applied loosely. For instance, public bodies needn’t publish them on Contracts Finder. They can publish contract notices on Contracts Finder if they wish, but then they must also publish Contract Award Notices (CANs) when they’ve selected their suppliers.
Let’s take a closer look at the procedures
Procedures are a subset of thresholds. They have to do with the procurement processes, including the tendering method used to award contracts. There are two overarching procurement procedures:
- Open tendering
- Restricted procedure
1) Open tendering
This is the tendering method most people are familiar with. A contract is published and all interested parties can bid on the initial tender. It is the most transparent procurement method.
2) Restricted procedures
In this method, a contracting authority pre-selects suppliers according to strictly defined criteria. This is usually where you see PQQs and Invitations to Tender (ITT).
What Types of Contracts Are Impacted By The PCR 2015?
The Public Contracts Regulations apply to five types of contracts:
- Public supply contracts
- Public works contracts
- Public services contracts
- Framework agreements, including call-off contracts
- Contracts awarded under dynamic purchasing systems
Light Touch Regime
The light touch regime applies to some service contracts – they don’t have to go through the full procurement process.
Light touch contracts include:
- Health and social services
- Education services
- Legal services
- Recreational or cultural services
(See Schedule 3 of the PCR)
The light touch regime only applies to Schedule 3 services when the contract value exceeds the threshold. Contract values above the threshold must publish contract and award notices on Contracts Finder. However, they can choose their own procurement process.
Selecting The Best Fit: Evaluation Criteria
There is a difference between selection criteria and award criteria. The primary difference is that selection criteria are bidder-focused while award criteria are bid-focused.
Selection Criteria for Tenders
The contracting authority’s selection criteria are described in the technical specifications. Suppliers must meet selection criteria (or minimum requirements) to proceed to the next step in the procurement process. Suppliers that don’t meet these criteria are excluded.
Selection criteria fall under three broad categories.
1) Suitability to pursue professional activity
This relates to suppliers’ capabilities. Public sector bodies might require proof, in which case suppliers must belong to professional bodies or trade registers, for example, Gas Safe Register.
2) Economic and financial standing
This relates to suppliers’ financial stability and can be used as a measure of risk, i.e., do they have the funds to deliver the contract? Data required includes turnover (within reason), annual accounts, and insurance.
3) Technical and professional ability
This relates to suppliers’ ability and experience. Examples include case studies, references, and testimonials. Examples must be relevant to the contract in question. Qualifications are also important, especially for high-risk or highly skilled contracts.
Award Criteria for Tenders
Award criteria identify the most suitable suppliers based on merit – not just price. This means the overall value bidders can provide in their initial tenders. Evaluation is based on MEAT, the Most Economically Advantageous Tender. The only time the Most Economically Advantageous Tender isn’t used is when it doesn’t comply with certain legal conditions in environmental, social, and labour law.
Note: The award process must be clearly documented to ensure transparency, consistency, and fairness in procurement procedures. This also relates to legislation regarding equal treatment (non-discrimination), environmental and social value, and prohibited behaviour or conduct.
Transparency Throughout: Notices and Contract Clauses
Contracting authorities are obligated to publish various contract notices. These ensure their procurement procedures are above board and avoid penalties; for example, reversing the contracting authority’s decision.
One of the most important notices is the Contract Award Notice (CAN). CANs announce the outcome of a specific contract. Essentially, the contract has been awarded and is now closed. Once again, this demonstrates transparency, fairness, and accountability in UK government procurement.
Contractual clauses in public procurement ensure everyone is on the same page when it comes to certain critical regulatory aspects of local and central government authorities’ public procurement, including intellectual property rights, termination clauses, and dispute resolution mechanisms.
You can get detailed information on the Sourcing Playbook, Model Services Contracts (MSCs), and contractual clauses in public procurement on the GOV.UK website.
What About Crown Commercial Service?
The Crown Commercial Service (CCS) also remains largely unchanged by the new Procurement Act because it still serves as a convenient, easy-to-use central hub or framework. It provides, among other things, resources, and guidance on how to implement the policies in the Public Contracts Regulations and the new Act, as well as standard contact clauses and pre-qualification questionnaires (PQQs).
Some of the policies include:
- Non-discrimination – equality of treatment
- Free movement of goods
- Freedom to provide services
- Freedom of establishment
- Transparency
- Proportionality (criteria/price/value)
Enhance Your Understanding Of UK Procurement Regulations And How They Pertain To Your Procurement Processes With Delta eSourcing
This post is the first step in demystifying the UK procurement process, touching on key aspects, including financial thresholds, selection criteria and the contract award decision, contract types, and Crown Commercial Service.
The next step is to contact Delta eSourcing for guidance on how to make contract regulations work for you, enhancing your contract development and setting fair selection and award criteria.
Contact us to book a free demo of our comprehensive set of eSourcing, eProcurement, and eTendering services
