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London Councils
Procurement and the law – what you need to knowDavid Mosey and Rhianna WilsherProjects and Construction department
Trowers & Hamlins LLP
1 November 2010
Employment and skills
■ CITB – ConstructionSkills’ Client-based Approach to Employment and Skills
■ Addressing skills deficit in construction industry
■ Clients setting and enforcing their own requirements
Client-based approach■ Employment and Skills Strategy focussing on 12 key areas over
market tested benchmarks■ Employment and Skills Plan (ESP)■ Method Statement■ Contractual commitment ■ Monitoring and support
■ Legal guidance – compliance■ Template clauses and documents (PPC2000, JCT, NEC3, Framework Agreement)
■ Practical advice
Existing workforce
8. Health & Safety training9. Vocational Qualifications10. CSCS cards
Employment & Skills Areas
New Entrants1. Site visits2. School workshops3. Research project4. Work experience 14-16 years5. Work experience 16+6. Apprentices - existing7. Apprentices - project initiated
Skills Culture
11. Short courses12. Progression into employment
Employment and Skills Plan
EU Procurement■ Public Contracts Regulations 2006■ “Contracting Authorities”■ Thresholds■ Principles - proportionality, non-discrimination and
transparency
■ Incorrect tender procedures may result in challenge from aggrieved contractors
■ New remedies under Remedies Directive
OJEU notification
■ EU wide advertisement■ Make clear intention to include employment and skills
requirements
Selection
■ Respond to OJEU Notice with a Pre-Qualification Questionnaire
■ Short list for tendering■ Request indication as to previous experience
Tender process
■ Invitation to Tender■ Minimum employment and skills requirements should be
set out in bid process■ Confirm commitment■ Complete an Employment and Skills Plan■ Method Statement
Contract development
■ Employment and Skills Plan & Method Statement included in contracts
■ No opportunity to negotiate under Open or Restricted EU procedures
■ Two-stage procedure adds flexibility■ Competitive dialogue enables flexibility
Monitoring
■ Project Manager reviews against Employment and Skills Plan and Method Statement
■ Key performance indicators■ Monthly reporting requirements■ Post-project review
Local agenda
■ Political pressure to increase local employment opportunities
■ Public Contracts Regulations 2006 (Regulation 39) - social considerations
■ OCG “Promoting skills through public procurement”
■ “Contract conditions must not discriminate directly or indirectly against national or non-national tenderers”
Local government procurement priorities■ Value for money – need for savings (will arm’s
length lowest price tendering also deliver high quality goods and services or are other processes/closer analysis going to produce better results?)
■ Economic sustainability – maximum opportunities for local businesses and employment/training of local residents (needs close working relationship with contractors/ service providers)
Innovation and partnership
■ Need to think about different ways of providing and buying goods/services
■ Necessary to improve value for money while not reducing quality
■ Need to work within EU procurement, but to look for techniques/exemptions/post- award processes that deliver results
■ Need to work with rather than against contractors/service providers/suppliers
Small Lots
■ £64,826 for services and supply contracts or £810,580 for works contracts
■ Less than 20% of aggregated value of all contracts for the relevant services/ supplies/works
■ An opportunity to reserve particular services/supplies/works for smaller businesses (i.e. local opportunities)
Limits on small Lots exemption
■ Cannot lower overall EU threshold by taking out small Lots
■ Aggregation rules will apply when assessing total of goods/services/works identified as small Lots
Worked examples
■ Framework - £40m of work let to four contractors each undertaking £10m of work over four years
■ Small Lots could comprise total of £8m of work reserved to SME contractors
■ Maximum of £2m worth of small Lots contracts on site at any one time to fall within 20% rule
■ Also, no one small Lots contract exceeding £810,580 in total
Bundling/debundling of services contracts
■ Consider, for example, “estates services” comprising different activities such as graffiti removal/cleaning of common parts/bulk rubbish removal/grounds maintenance
■ Possible identification of one service easily separated from the others and let as a small Lot
■ Provided it does not comprise more than 20% of overall requirement for estate services
Practical assistance to SMEs
■ Procurement procedures need to be simple and not unduly onerous for small companies
■ Advertisement in local press/internet sites where SMEs will have access
■ Review level of administration in terms of questions raised/information requested at prequalification and through invitations to tender
■ “Meet the client” events and other means of easier access
Supply chain re-engineering■ Combination of savings with added value ideas
after completion of EU processes■ Jobs, apprenticeships and other training
opportunities can be achieved through this system
■ Depends on conditional two stage appointment for:
■ Single Project■ Framework Agreement■ Long-Term Contract
Supply chain re-engineering
■ Worked example of Hackney Homes■ Appointment of five Decent Homes contractors, post-
selection review of supply chains and conclusion of joint second tier agreements with suppliers/subcontractors
■ Combination of savings with training and employment activities
■ Proposed as National Skills Academy for Construction project
