Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
Crown Commercial Service (“CCS”) Public Procurement Action Note (“PPN”) 07/16 says that:
"Contracting authorities must ensure that any procurement opportunities and contract awards above certain low value thresholds are published on Contracts Finder."
As regards contract awards, this is entirely correct. However, it is dangerously misleading in suggesting there is a requirement to advertise all contracts valued over £25,000 (or £10,000 for central government).
The obligation to advertise prospective contracts on Contracts Finder is set out in Regulation 110 of the Public Contracts Regulations 2015. This obligation applies only,“where a contracting authority advertises a contract award opportunity”. It does not apply where there is no “public advertisement” of the contract opportunity, such as where a contracting authority approaches a single contractor (for example, the incumbent to extend an existing contract for a short period to cover a delayed procurement), or a “closed list” of contractors invited to tender by the contracting authority.
This is made clear in Regulation 110(5)(b) which states clearly that a contracting authority
“does not advertise an opportunity where it makes the opportunity available only to a number of particular contractors selected for that purpose”.
Surprisingly, there is no mention of this Regulation in the PPN.
There are only two circumstances in which a contracting authority is required to advertise a contract valued below the EU tendering threshold publicly:
- where the contract may be of “cross border” interest to contractors based in other EU member states (which is often relevant for supplies contracts or for contracting authorities based in Northern Ireland, but not usually for contracting authorities seeking contractors or service providers within mainland Britain); or
- where the project is being funded by grant (particularly European Structural Investment Funding such as ERDF or ESF) and the grant conditions require public advertising.
Outside of these two circumstances, there is nothing in the Regulations that requires contracting authorities to advertise “below threshold” tender opportunities publicly.
Of course, a public advertisement may be required by a contracting authority’s own standing orders, although these can usually be waived. It may also be helpful to demonstrate “value for money” or “best value”, although this can also be done through benchmarking.
If a contracting authority chooses to advertise the contract publicly, even where there is no legal requirement to do so, it does need to be advertised also on Contracts Finder. The PPN is correct on this. The issue is where a contracting authority chooses not to advertise because there is no legal obligation to do so.
We have taken up this issue with the Crown Commercial Service and suggested that a correction is made to the PPN to refer to Regulation 110(5)(b). Our query has been referred to their “Policy Unit”.
The willingness (or otherwise) of CCS to issue a correction to the PPN should tell us whether the omission is merely an oversight or a deliberate attempt to mislead contracting authorities into advertising on Contracts Finder contracts that do not need to be advertised at all.
For more information
Please contact Andrew Millross.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
A long-awaited decision of the Court of Appeal has clarified that a lower standard of proof should apply than previously thought before an Inquest can return a conclusion of suicide.
New regulations come into force on 1 June 2019, amending the Section 21 (s21) prescribed form template for use with assured shorthold tenancies.
In a challenging economic climate with continuing budget cuts and increasing expectations of staff, sickness absence remains an ongoing problem that is important to address.
Social housing providers will routinely have a number of construction projects underway at any one time. It is essential for client teams to understand and avoid key contract management pitfalls.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.