Response to Public Consultation
Getting Value for Money Through the Smarter Procurement of Works Contracts
The following actions would improve VfM and contract performance in relation to works contracts.
1. Under the Public Spending Code, it should be made compulsory that all works projects with a capex in excess of €25m should be procured using the competitive procedure with negotiation. This proposal would result in contracting authorities getting a Best and Final Offer based on a more precise and negotiated understanding of the project brief and costs. The current practice of using the restrictive procedure for large scale projects inevitably results in significant cost overruns: the Children’s Hospital is a case to point.
2. Linked to this proposition, it is also recommended that OGP instruct all contracting authorities to appoint a Procurement Process Auditor for all works projects with a value in excess of €50m. The appointment should be made once the preliminary business case has been accepted. The OGP should procure Procurement Process Auditors by way of a framework. In addition, the June 2004 (Department of Finance) guidance on the role and function of a process auditor could be update.
3. The procurement of construction professionals should be carried by contracting authorities using a Dynamic Purchasing System (using lots by profession category/region). This would greatly simplify the appointment of such professionals and would replace the current requirement of procuring individual advisors via the cumbersome CWMF. DPS procurement is emerging as the default procurement option of choice in the UK and is used extensively in the procurement of construction professionals.
4. Linked to this proposition, all contracting authorities with a requirement to appoint small building contractors should be required to procure works using a DPS. A new simplified template Tender Response Document and small works contract (drawing on the RIAI model form) should be introduced for all works contracts valued at under the EU threshold.”
5. Maintenance contracts below a value of €20m over the term of the contract should be procured using the OGP’s template services RFT/contract and/or framework for facilities management. As services dominate the contact the CWMF should not be used.
6. A new easy to use template RFT, TRD and works contract should be introduced for all
works contracts valued under €50,000.
7. Guidelines (mandatory) should be issued in relation to the use of sustainable (green) public procurement selection and award criteria for works contracts over the EU threshold. The current (draft) version of EPA guidance on GPP (January 2021) excludes works and construction products and services. Using GPP for lower valued contracts might be attempted at a later stage in the light of experience with higher valued projects.
8. Elements of the UK’s Construction Playbook (PPN 09/20) should be incorporated into revised CWMF guidelines.
9. Contractors should be asked to completed a Tender Response Document (TRD) for all works procurements other than high risk, high value contracts where a bespoke approach is needed. A TRD should replace the Suitability Assessment Questionnaire.
10. The CWMF should be made compliant with the 2014 Public Contracts Directive. At a minimum, the following changes should be made:
a. The ESPD should be a requirements for all procurements in excess of the EU threshold. There is no further need for the Declaration of Personal Circumstances of the Tenderer.
b. Only electronic submissions should be sought.”
c. Where used, the Suitability Assessment Questionnaire/TRD should require one signature only. The current SAQ (for use in a restricted procedure) requires eight declarations to be signed and completed).
d. Unless justified on the basis of risk, evidentiary documents should only be sought from the preferred tenderer only.
11. The OGP should procure a provider(s) to deliver the current suite of public sector training materials on works procurement to contractors and construction professionals. Investing in public sector works procurement training only – as is the case currently – will not facilitate the effective implementation of a reformed CWMF.

Peter Brennan
3rd February 2021

Copyright Bid Services Ltd. The material in this post is purely for information and discussion and does not purport to advise on matters of law.

Really pleased we have been approved by Enterprise Ireland as a professional service provider under their Green Start Programme. What this means in practice is that we can support EI clients that need strategic advices and practical assistance in bidding for public and private tenders – in Ireland and abroad – where sustainable procurement criteria are driving the buyer’s decision to purchase

The EPA is developing new guidance for the mandatory use of green pubic procurement (GPP) in Ireland. Embedding GPP in tenders is to be welcomed; it is long overdue. However, the draft guidance document raises a number of important questions as follows.

1. The systematic introduction of GPP selection and award criteria into Irish public tenders (over the EU threshold values) will potentially have a higher impact on reducing national GHG emissions and energy consumption than many other actions identified in the National Energy and Climate Action Plan.
2. The draft guidance is described as a ‘Starter Kit’. Would it not be much better if comprehensive guidance based on the EU’s GPP Toolkit was published now?
3. Quite correctly, the draft guidance hints (but does not require) that the introduction of GPP by a public body should be based on an initial needs assessment (which is a critical element of the EU GPP Toolkit).
4. Only ten product categories have been selected. Why are construction-related procurements such as roads, transport and water and waste water projects and construction products – that are included in the EU GPP guidelines – out of scope of the Irish guidance?
5. The current suite of OGP template tenders and contract documents will need to be changed to give effect to the EPA guidance once it is adopted. Why are no such amendments included in the draft guidance?
6. In compliance with Government guidelines, given the value of public contracts affected and compliance costs, should a full Regulatory Impact Assessment of the draft guidance be undertaken? A RIA could assess whether it makes economic and environmental sense to apply the GPP guidelines to procurements below the EU value threshold as is currently suggested. This requirement is arguably disproportionate. A RIA requires structured stakeholder consultation. To date, to my knowledge there has been no engagement with Irish tenderers. This is a big mistake. The engagement of Irish suppliers is critical to the successful and phased introduction of GPP. Bear in mind that many are at a competitive disadvantage compared to their EU counterparts who are well-accustomed to responding to GPP selection and award criteria for over a decade.
7. The draft guidance has been framed against the background that GPP criteria have been designed to avoid any significant impact on cost or product availability. This is potentially a cop out and could be used, for instance, by some contracting authorities as a justification for ‘doing nothing.’ In fact, Life Cycle Cost calculations, GHG emissions reductions, energy efficiency metrics and the shadow price of carbon should be, where appropriate, a compulsory element of all business cases carried out before a decision is taken to tender based inter alia on GPP criteria. The Public Spending Code could be amended to take account of the proposed mandatory use of GPP.
8. Where is the budget to give effect to the proposed action plan to integrate GPP into procurement practices in Ireland? Why are public bodies only receiving Exchequer support for GPP training and awareness raising? Why is there no counterpart funding for Irish tenderers? In addition, will Exchequer support be provided to encourage Irish tenderers to secure high environmental standards such as ISO14024? If Irish public bodies start insisting on Irish tenderers having mandatory environmental standards as a compliance pre-requisite, more public sector business will go offshore.
9. As a significant amount of energy efficient and sustainable products are imported from the UK, the absence of any mention of Brexit is a gap in the draft guidance.
10. Before detailed sector specific rules are finally agreed, should an assessment of the dynamics of the supply chain in Ireland for the sustainable products to be procured be completed.
11. Could SEAI’s TripleE and energy efficiency standards (IS 399) be explicitly referenced as compulsory selection criteria, where appropriate?
12. A bespoke set of GPP rules could be introduced for significant public sector works projects, such as the €9 billion deep retrofit programme.
13. At present, compliance with GPP guidance is voluntary. Should primary legislation be introduced to make GPP mandatory for tenders above the EU threshold? Could amendments be added to The Climate Action and Low Carbon Development (Amendment) Bill 2020?
14. Who is charge? Should the EPA, OGP, DPER, DECC and/or individual contracting responsibilities be responsible for monitoring compliance with the new GPP guidance? Which organisation will host a GPP Helpdesk?
15. In terms of GPP governance, should a Project Delivery Steering Group, including private sector contractors/tenderers, be set up?

PB
23rd November 2020

The material in this post is purely for information and discussion and does not purport to advise on matters of law. copyright of bidservicesltd.

There is a potential gap in the scope of the Climate Action and Low Carbon Development (Amendment) Bill 2020: green public procurement. Making GPP mandatory is a Programme of Government commitment. So why not do this in the Climate Action Bill in respect of all tenders valued over the prevailing EU threshold? GPP is the most sustainable, quickest, cost effective and most efficient way to drive down GHG emissions and to improve energy efficiency.

Peter Brennan
peter@bidservices.ie

Let’s look at the budget from a procurement point of view. Next year the Public Capital Programme will be at a record level at over €10 billion; the commercial semi-state sector will procure at least €8 billion; and Ireland’s 3,000+ contracting authorities will tender for some €15 billion+ in supplies and services. Ireland’s procurement market has grown to €33 billion. Wow. Busy times ahead for buyers and suppliers.

Peter Brennan
peter@bidservices.ie

As a result of the unprecedented demands for PPE supplies across the NI Public Sector due to the current and ongoing COVID19 situation, CPD are currently seeking supply of PPE supplies and equipment.

In light of the current situation, Bid Services’ Consultants are waiving all fees to assist organisations in getting registered on etenders NI and completing the required documentation.

The link to the tender is as follows:

https://etendersni.gov.uk/epps/cft/prepareViewCfTWS.do?resourceId=2856716&fbclid=IwAR0BKfeTon0BanUnFlLz218gKTKqiGF7Jq8NGgiOd_FkbnXwudA-qhPfb58
Should you have capability in this area, please email info@bidservices.ie.

We all have a part to play.

Top Tips From Ireland’s Procurement Lawyers

I chaired CMG’s www.cmgevents.ie recent conference on procurement and tendering.

Hereunder is a summary of some of the points made by the procurement lawyers who presentted.

Tender Evaluation: Courts look at situations where there is a manifest error. Important that evaluators are not substituted during the evaluation process. The evaluation report, including Conflict of Interest Declarations, should be signed by all evaluators. Keep notes. Give evaluators plenty of time to assess tender responses prior to the evaluation meeting.

Clarifications: Cannot change essential conditions (for example introducing new technical specifications) by means of clarifications prior to submisiosn daedline. Best practice is that clarifications should be sought at evaluation stage, but in so doing a non-compliant submision should not be made compliant as a result of a clarification. Responses to clarifications are contractually binding.

Abnormally low tenders: Should seek clarifications if an abnormally low priced tender (that is not defined) is submitted. Decision taken should be carefully recorded in Procurement Audit Report.

Competitive Dialogue/Competitive Procedure with Negotiation: The use of these procedures must be justified and so recorded in procurement audit report. Main difference is that under CD it is possible to negotiate with preferred tender post Best and Final Offer stage. European Institute of Public Administration has published detailed guidance.

Results Letters: Use OGP templates (January 2019). Communicate characteristics and relative advantages of successful tenderer to compliant tenderers. Only possible to determine ‘relative’ advantages when evaluation of all submissions is completed. Detailed reasons should be given with reference to specifics. Respect tenderer’s confidentiality. A tenderer that is deemed as non-compliant does not need to be provided with a detailed briefing. No need to provide detail debriefing if scores are the same. Detailed narrative should be given to procurements with a contract value below €25,000. No obligation to give a tenderer’s ranking but it is best practice.

Standstill: Essential that a standstill notice letter must give sufficient information to enable an unsuccessful tenderer to decide whether there are grounds for seeking review.
Formal submission of legal papers starts the process.

Debriefing Meeting: Not recommended: ‘too dangerous’. Not a requirement under the procurement rules. Prepare carefully if a de-briefing meeting is agreed. Conduct an independent review of scoring where appropriate. The standstill (30 day) clock will not be reset if a debriefing meeting is held.

Keeping Records: A Procurement Audit Report, with supporting documentation (including evaluators’ notes), must be prepared and kept for three years for all tender competitions above EU threshold and in situations below the threshold where cross-border submissions received. Best practice is to prepare a PAR to support internal audit function.

Pre-tender Consultation: Permissible based on clear rules of engagement but must not result in a violation of the principles of transparency and non-discrimination. No guidance in Regulations about conduct of market consultation. One-on-one meetings most useful. All pre-tender consultation documents must be published. Best practice for high risk procurements.

Estimated contract value: Must be included in contract notice.

Discovery: Recent Court of Appeal ruling may make it more difficult to get discovery of documents.

Confidentiality: Publication of tender price in Contract Award Notice may be withheld if certain conditions met e.g. it might harm legitimate commercial interests of tenderer.

Freedom of Information: Office of the Information Commissioners guidance notes should be consulted. EU procurement law has primacy over Ireland’s FOI Act. Specific rules apply in relation to access to information on the environment.

Know How:https://beta.courts.ie/is a useful web site for sourcing procurement cases.

Peter Brennan

The material in this post is purely for information and discussion and does not purport to advise on matters of law. Any persons affected by the matters discussed in this post should seek legal advice on their particular situation.

In a previous post I looked at some figures for EU-level public procurement activity undertaken by Irish contracting authorities in 2018. In this post I will look at the overall figures for the EU 27 as a whole in 2018.

The following is a summary of the main figures:

Type of Notice	EU 27 in 2018	Notes
Contract Notice	213,731	An increase of 8% over 2017 (197,976 )
Open Procedure	186,047
Restricted Procedure	6,804
Negotiated Procedure	9,084	(Utilities)
Competitive Procedure with Negotiation	10,495	Only available to Public Sector Contracting Authorities since the adoption of the 2014 Directives. Take-up has been rapid and 2018 represents a 55% increase on 2017 (6,739).
Competitive Dialogue	774	An increase of 46% on 2017 (528).
Innovation Partnership	77	Up from 39 in 2017.
Accelerated Restricted Procedure	82
Accelerated Negotiated Procedure	16
Other/Not Specified	352
Contract Award Notice	228,548
Open Procedure	181,245
Restricted Procedure	10,105
Negotiated Procedure	8,875	(Utilities)
Competitive Procedure with Negotiation	9,287
Competitive Dialogue	594
Innovation Partnership	51
Accelerated Restricted Procedure	86
Accelerated Negotiated Procedure	1,939	Of which Portugal appears to account for 1,920?
Negotiated procedure without a call for competition	10,762	Seems very high given that this is supposed to be an exceptional procedure.
Contract award without prior publication/direct award	5,015	This only relates to acknowledged direct awards. There would appear to be a significant number of direct awards which are not declared via OJEU.
Not Specified /Other	589
Other Notices Used in 2018	EU 27	Notes
Voluntary Ex-Ante Transparency Notices	7,061	Often published to proof direct awards against challenge under Remedies Directives.
Modification of a Contract/Concession during its term	11,144	New transparency obligation imposed by 2014 Directives.
Dynamic Purchasing System	660	Usage increasing following simplification in 2014 Directives. UK appears to be the lead user of DPS with 253 advertised in 2018.
Prior Information Notice without call for competition	12,990	Often published with a view to reducing response timescales.
Prior information notice with call for competition	570	New feature of 2014 Directives and not available to central government bodies.
Periodic indicative notice without call for competition	557
Periodic indicative notice with call for competition	102
Qualification system without call for competition	291	Available to Utilities only
Qualification system with call for competition	593	Available to Utilities only

Comment:
The overall scale of activity is truly massive. Anyone who has been involved in just one OJEU-level procedure will appreciate the time and effort involved. The figures suggest that across the EU there are approximately 200,000 procedures in train at any given time. This represents a very large expenditure of effort and resources by public purchasers not to mention the corresponding time, effort and resources of all the economic operators who submit responses.

The most striking trend to emerge from the 2018 figures is the high take-up (10,495) of the new “Competitive Procedure with Negotiation” for which there seems to be a strong demand. It will be interesting to see how the use of this procedure progresses in future years in the light of buyers’ experience. There have always been concerns that, if not used properly, this procedure could shift the balance of bargaining power significantly from purchaser to supplier and lead to adverse outcomes for the taxpayer. A space to be watched.

Another noticeable trend is the increased usage of Dynamic Purchasing Systems (660) and it will also be interesting to follow how this procedure fares in future years. It would seem to have great potential in helping contracting authorities to address recurring purchases of standard “off-the-shelf” goods/services and works.
On the downside, the figures for use of direct awards (5015) and negotiated procedure without a call for competition (10,762) are disappointingly high, considering that these options are supposed to be exceptional and subject to strict limiting conditions.

Another curious feature is the apparently high level of Accelerated Negotiated Procedures used by Portugal in 2018 when it accounted for almost 100% of the use of this procedure across the EU 27.

James Farrell
Senior Procurement Consultant

e: james@publicprocurement.

Procurement Research Ltd. April 2019. The material in this post is purely for information and discussion and does not purport to advise on matters of law. Any persons affected by the matters discussed in this post should seek legal advice on their particular situation.

Background
The EU Procurement Directives make provision for certain very limited situations where a contracting authority may award contracts without advertised competition. These are set out at Article 32 (2)-(5) of Directive 2014/24/EU (Public Sector), and Article 50 (a)-(j) of the Utilities Directive and Article 31 (4) and (5) of the Concessions Directive. Those situations may be summarised briefly as follows:

The works, supplies or services can be provided by only one economic operator because:
(a) no suitable responses received to a previously-advertised tender competition;
(b) where for uniqueness (e.g. artworks) or technical or intellectual property reasons a product or service may be provided by only one economic operator (NB – subject to very significant additional detailed qualifications);
(c) because of extreme urgency brought about by unforeseen events that are not attributable to the contracting authority.

For supply (goods) contracts where:
(a) the products are purely for research purposes;
(b) additional deliveries by an original supplier (and subject to detailed qualification);
(c) for supplies quoted and purchased on a commodity market;
(d) for purchases on exceptionally advantageous terms due to liquidation of the suppler etc.

For new works or services where:
(a) a contract is to be awarded on foot of a previously advertised design contest;
(b) the new works or services consist of the repetition of similar works or services awarded to the original contractor under an advertised competition, provided that such works or services are in conformity with a basic project for which the original contract was awarded, and, when the basic project was advertised, the extent of possible additional works or services and the conditions under which they will be awarded was made clear (and subject to additional qualifications).

The Recitals to the three Directives (which should always be read carefully if contemplating a direct award) emphasise the very limited scope of these exceptions: “In view of the detrimental effects on competition, negotiated procedures without prior publication of a contract notice should be used only in very exceptional circumstances.”

In other words, the EU legislators were conscious that permitting direct unadvertised awards could facilitate anti-competitive behaviour and so these exceptions are very tightly drawn.

Because they are exceptional grounds, they will be construed narrowly by the courts and the onus will always be on the contracting authority to justify their use.
In short, any contracting authority contemplating the use of these procedures should take considerable care, including seeking legal advice, in order to ensure that they are not caught offside in making illegal direct awards.

Logic would suggest that a prudent contracting authority, if faced with any doubt on the matter, should err on the side of caution and conduct an orthodox advertised tender process.

As explained in my previous post on the Eurotunnel case in the UK, there can be serious consequences in the event that a contracting authority is found to have made an illegal direct award, including the risk of having the contract set aside as ineffective, and/or the award of damages and/or fines.

Voluntary Ex-Ante Transparency Notices
In order to mitigate the risk of ineffectiveness in bona fide cases the EU Remedies Directives make provision for the publication of a Voluntary Ex Ante Transparency Notice which allows for a minimal degree of transparency in direct award situations.

In completing the VEAT notice it is critical that the contracting authority gives sufficient information as to the nature and full extent of the contract and its justification for direct award without OJEU advertising, and observe a minimum 14 day standstill period before the contract is awarded.

This allows economic operators the opportunity to challenge the decision of the contracting authority and either force the holding of an orthodox competition or, should the contracting authority persist with the award, enable an aggrieved party to seek to have the award set aside in court. The advantage to the contracting authority of the VEAT procedure is that the penalty of mandatory ineffectiveness does not apply in the event of a challenge to a contract awarded after the 14-day standstill period has elapsed.

Irish contracting authorities may use the etenders portal to publish VEAT notices in appropriate cases.

According to Tenders Electronic Daily, there were 7,061 VEAT Notices published across the EU 27 in 2018, of which 28 were published by contracting authorities in Ireland. (NB – this is by no means the full extent of direct awards: it appears from the data on the TED website that there were 10,762 contracts awarded across the EU by “negotiated procedure without a call for competition” and a further 5,006 by “direct award without prior publication” during 2018. It seems likely too that a significant but unknowable number of over-threshold contract awards are made throughout the EU without any form of notice being published.)

The significant volume of VEAT notices published annually has given rise to concerns of possible abuse whereby these notices are being “sneaked out” in the hope that interested market operators will not pick up on them or be able to mount a challenge within the very tight limitation period of 14 days (or 10 days in some Member-States).

The European Commission in its most recent Report on the Effectiveness of the Remedies Directives does not appear to share that concern, and the use of VEAT notices is barely mentioned in it.

Another ground for concern is where a contracting authority fails to set out clearly the true nature and extent of the contract in the VEAT Notice, a factor which recently led the English Court of Appeal to set aside as ineffective a land development contract awarded by an English local authority in the Faraday Developments case because the Court found on the facts that the VEAT notice being relied on to resist Faraday’s claim of ineffectiveness failed to give a properly detailed description of the contract and therefore was not a valid notice that could be relied on to prevent the court making a declaration of ineffectiveness.

The European Court of Justice ruling in the Fastweb case C-19/13 (cited in the Faraday case) is also significant in the context of ensuring that direct award decisions are made for bona fide reasons in the limited exceptional circumstances provided for in the Directives.

Conclusion.
While it is useful for procurement officials to be aware of the existence of the VEAT Notice procedure which may be a legitimate option in appropriate cases, they should also be aware of the risks involved and the need for extreme care in making use of it.

James Farrell
Senior Procurement Consultant

e: james@publicprocurement.ie

This post is an exploratory discussion of procurement issues of general interest and does not purport to constitute legal advice.