Finding your way around the OJEU process and public sector purchasing

  • Published on: 11 May 2015
  • By: Admin

We’ve worked with many public sector organisations, to help guide them through the complexities of EU Procurement Directives which apply whenever public sector authorities seek to acquire goods, services and works above a set threshold.

In short, these directives have been put in place to:

  • Open up the public procurement market
  • Ensure there is free movement of goods and services within the EU
  • Guarantee that public procurement is based on “value for money” which should be achieved through competition

So how do you know if your procurement activity needs to follow this directive?  If the following pre-conditions are met then a contracting authority must advertise the contract in the EU's Official Journal (OJEU) and follow the rules set down in the regulations:

  1. The body doing the buying is a "contracting authority".  This includes central government, local authorities, associations formed by one or more contracting authorities and other "bodies governed by public law" (e.g. universities and housing associations)
  2. The contract is for public works, public services or public supplies. Where contracts are mixed, e.g. the supply and maintenance of computers, the contracting authority must determine which element (the supply element or the service element) is the predominant element and, therefore, which set of rules will apply. This can be important to get right as the rules vary slightly depending on the type of contract and lower financial thresholds apply to services and supplies contracts than to works contracts.
  3. The estimated value of the contract (net of VAT) equals or exceeds the relevant financial threshold. The rules expressly prohibit deliberately splitting contracts to bring them below the thresholds.

The thresholds as of January 2014 are as follows:

  • Supplies: £172,514 (€207,000)
  • Services: £172,514 (€207,000)
  • Works: £4,322,012 (€5,186,000)

Public sector purchasing is subject to much stricter rules than the private sector, and regardless of whether or not the anticipated procurement will exceed the thresholds all public expenditure must be carried out in a manner which ensures equal treatment. Authorities must be seen to treat all tenderers the same way, without prejudice. Specifications should also be written without reference to brand names which would favour certain providers.

Transparency is a key part of the process and organisations should be seen to be open and upfront with potential tenderers, stating clearly conditions for participation, selection criteria, award criteria and the reasons why tenderers were successful or unsuccessful.

Another important element is mutual recognition, and EU member states are required to accept on their territory products which are legally produced and marketed, and services that are legally provided, in other member states.

Failure to follow the procurement procedures set out in the regulations may result in penalties for non-compliance. Challenges may be made, however procurement may still be suspended and damages may be awarded.

It is safe to say therefore that any procurement exercise that falls into this directive must be treated with care and carried out by informed parties who understand its complexities and who will follow a robust, auditable process. eXceeding has gained considerable experience in this area and is well placed to advise contracting authorities on all aspects of this directive and how to ensure that a compliant and auditable process is followed every time, whilst getting the desired best practice outcomes from the process.

For further information on Procurement and OJEU please visit our Procrement Strategy page

Email [email protected]  or call 03333 555 111 for all enquires