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Introduction of New Irish Public Procurement Rules
There are no big surprises in the new Irish public procurement rules that were published on Thursday 5 May 2016, following a long silence since a public consultation in October 2014.
The European Union (Award of Public Authority Contracts) Regulations 2016 and the European Union (Award of Contracts by Utility Undertakings) Regulations 2016 transpose into Irish law two of three 2014 Directives that were intended to modernise procurement laws across the European Union. The Concessions Directive (Directive 2014/23/EU) has yet to be transposed into Irish law, although it also was consulted upon in 2014 and the deadline for transposition of all three Directives passed on 18 April 2016.
Do Ireland’s Choices Affect You?
The 2014 Directives gave Ireland certain choices and Ireland has generally enabled awarding authorities to benefit from this flexibility. For example:
- Ireland did not mandate the division of contracts into lots.
- Ireland did not mandate that tenderers be required to declare their proposed use of sub-contractors or provide for authorities to make direct payments to sub-contractors on request.
- Ireland did not prohibit the use of price-only / cost-only as an award criteria.
- Ireland provided for the possibility of a derogation being granted, in exceptional cases, from the grounds for mandatory exclusion of a tenderer.
In cases where a choice had to be made, Ireland generally followed the approach adopted by the UK in implementing the 2014 Directives. For example:
- Ireland chose to specify five years from the date of conviction as the standard expiration period for the mandatory exclusion of a tenderer.
- Ireland chose to implement mandatory electronic communication, rather than deferring until April 2017.
The new Regulations apply to all procurements “commenced” on or after 18 April 2016 despite the fact that they were only published on 5 May 2016. The term “commenced” under the Regulations means the authority has published an advertisement (eg, sent a notice to etenders / OJEU) or has contacted tenderers seeking offers. This could well cause difficulties for those who are stuck in the middle.
Reminder of the Key Changes Under the 2014 Directives
There are many areas where the 2014 Directives did not require Ireland to make choices and, as expected, a “copy-out” approach was largely adopted in transposing these EU rules.
It would appear that at least one transcription error was made during this “copy-out” exercise. One of the new safe harbours for contract modifications mistakenly includes “either” rather than “and”. The equivalent provisions of the 2014 Directives clearly require that the modification be below both the relevant contract value threshold and 10% / 15% of the value of the original contract, in order to benefit from the safe harbour.
We set out below our summary of the Top 10 changes made by the 2014 Directives:
- Faster Tenders – New and shorter minimum time periods can be given to bidders.
- “Light Touch Regime” – Certain former “Part B Services” are now subject to less extensive procurement rules and others are now subject to the full set of procurement rules.
- Exempt Contracts – Guidance on exemptions for purchasing between public bodies.
- Pre-Tender Activities – Guidance on how to engage in pre-tender market sounding.
- SME participation – New caps on turnover requirements, new rules on dividing contracts into lots and self-declarations, and compulsory e-procurement.
- Abnormally Low Tenders – New guidance on how to handle tenders that may not be credible, including a specific duty to investigate abnormally low tenders.
- Exclusion Grounds – Extended grounds of mandatory exclusion, new discretionary exclusion grounds, and new provisions on “self-cleansing”.
- Award Criteria – Clearer rules on taking into account economic policy goals in tender design and on what criteria can / cannot be evaluated at the award stage.
- Contract Modifications – Greater certainty as a result of new safe harbours for authorities (including some safe harbours that require publication of a standard-form notice).
- Scope of Utilities Regime – Greater clarity on the scope of utilities procurement regulation due to new definitions of regulated activities and the concept of "special and exclusive".
What Does It All Mean?
The guidance note that accompanies the Regulations states that the new Regulations “should allow public bodies to carry out procurement faster and with less ‘red tape’.”
We do not expect that the new Regulations will revolutionise public procurement in Ireland, or remove any commonly experienced headaches for awarding authorities or bidders. However, some changes, such as the new safe harbours for contract modifications, should be welcomed as bringing about greater certainty and simplicity for all.