The Public Contracts Regulations 2015 (the “2015 Regulations”) have come into effect.

As with the previous Public Contracts Regulations 2006 (the “2006 Regulations”), the 2015 Regulations govern the process and criteria for the award by public authorities of contracts to provide goods or services to them. The 2015 Regulations replace the 2006 Regulations for all public contracts that ‘commenced’ on or after the 26th February 2015 (commencement includes advertisement via OJEU). Consultation on new public utilities and concessions regulations are expected later this year.

The changes are best seen as evolution rather than revolution, and in many cases simply codify the position as it was prior to implementation of the 2015 Regulations. Key changes in the 2015 Regulations from the position under the 2006 Regulations include:

  • Removal of Part B
    Under the old regime so called Part B Services were exempt from the full application of the procurement rules. These have now been replaced by what is known as a “light touch regime” and there have been various amendments to the categories of services that were previously listed under Part B.
  • Codification of 'in-house' exemption
    The criteria for the exemption from the rules for the award of ‘in-house’ public contracts has now been expressly set out in the 2015 Regulations as is the exemption for joint co-operation between contracting authorities.
  • Rules in relation to under threshold contracts
    These require contracts as low in value as £10,000 to be advertised on the Government’s ‘Contracts Finder’ portal.
  • Rules in relation to pre-procurement engagement and conflict of interests
    There are now express requirements for suppliers to provide information in relation to pre-procurement engagement and conflict of interests in order to ensure transparency between the various bidders.
  • Increase in the number of grounds for mandatory and discretionary exclusion
    The criteria for exclusion of operators from tenders takes into account new law, for example the Bribery Act 2010, and a wider range of circumstances where the Government may exclude private contractors. There are also maximum periods for mandatory and discretionary exclusion of 5 and 3 years respectively.
  • Financial Standing
    There is now a maximum turnover requirement that can be imposed by a contracting authority of twice the contract value, unless there are ‘special risks’ associated with the contract.
  • New rules on award criteria
    All contract awards must now be made on the ‘most economically advantageous tender’ basis.
  • Clarification on modification of contracts
    The rules on whether changes to a contract require retender are now codified: a modification provided for in the original contract in a clear, precise and unequivocal term will not trigger a new procurement process. A substantial modification not provided for will. There are also additional detailed criteria in this regard.
  • Payment of invoices
    There is now an obligation on contracting authorities to pay valid and undisputed invoices within a 30 day period. There is an obligation on contracting authorities to ensure suppliers abide by these conditions in relation to their own sub-contractors.
  • Termination
    There is now an implied right to terminate contracts where there has been a substantial modification, contractors should have been excluded or where there has been a serious infringement under European law.