Very interesting and important topic. I wonder if you have any thoughts on whether a proper right to Freedom of Information has a role to play in dealing with potential abuses of public procurement? Should public contracts be made fully public by default?
BTW there is a possible typo - "Public authorities canNOT buy as they wish."?
All the Tendered prices should be published, as else the losing Tenderers get a commercial advantage over the winner in seeing how much they lost by, whereas the winner will not know how much more they could have bid and still won.
One answer to the rhetorical question is Part 10 of the current Procurement Bill (but it would be a more persuasive one if the relevant powers were conferred on an independent body). Another answer, or perhaps an underlying further question, is that procurement law has never been sure whether it exists to serve the public interest in efficient and/or non-corrupt procurement, or simply to open up markets (in which case there is a logic in conferring challenge rights only on economic operators, although still in my view unconvincing).
Indeed - on that footing, it simply connotes procurement by the public sector - the explicit reasoning in Court of Justice caselaw on what counts as a "contracting authority" being that public bodies can't be trusted to award contracts, free of national bias, to the best the market has to offer (so the legislation is there to force them to do so), whereas commercial self-interest drives the private sector that way anyway. In these times of austerity some public bodies might wonder how far that approach reflected the real world, but there it is. And dicta in other cases do suggest a more public interest rationale. The Bill didn't really take the opportunity to think these questions through.
If there is to be national or local bias, that has to be via a stated policy. Note that the requirement for a construction product to be UKCA marked before it can be placed on the market in GB is one simple way of trying to achieve that.
Is there also a literal in "; and the contracts should be awarded on the basis of not of the best price then on the basis of value for money."? Presumably it should be "if not of the best price then".
I feel strongly that the duty of transparency should in general outweigh that to get best value for money. In other words, the concept "commercial in confidence" should have no place in public sector contracts. This might cause some potential suppliers not to bid; so be it.
Exceptions would be necessary for some cases involving national security. Maybe, exceptionally, certain trade secrets?
The concept of value for money is usually explicitly dealt with in Tenders either by
1. Having an adjacent Quality Bid that can be scored and converted into a monetary amount for direct comparison between bids, or
2. by having 'genuine pre-estimates' of costs associated with an action - an example being the notional cost (or negative value) of a motorway lane closure. Hence keeping a motorway lane open may be the preference even if the Tender Price is slightly higher as a result.
One thing that was extant for a long time in public procurement was the rule that goods and services could only be paid for after said goods and services had been delivered albeit that, as is typical in construction contracts, interim payments could still be made. It is a lot easier for public bodies not to pay for something that is defective, than to pay in advance and then try and seek the money back through legal action.
Surely there must be an overseer for public bodies otherwise you could get governments handing out contracts to their benefactors or to their friends
Well, quite.
Very interesting and important topic. I wonder if you have any thoughts on whether a proper right to Freedom of Information has a role to play in dealing with potential abuses of public procurement? Should public contracts be made fully public by default?
BTW there is a possible typo - "Public authorities canNOT buy as they wish."?
Sorry about the typo, which I will fix.
And yes: the benefits of a public contract - with guaranteed paymments should be at the cost of full transparency.
All the Tendered prices should be published, as else the losing Tenderers get a commercial advantage over the winner in seeing how much they lost by, whereas the winner will not know how much more they could have bid and still won.
One answer to the rhetorical question is Part 10 of the current Procurement Bill (but it would be a more persuasive one if the relevant powers were conferred on an independent body). Another answer, or perhaps an underlying further question, is that procurement law has never been sure whether it exists to serve the public interest in efficient and/or non-corrupt procurement, or simply to open up markets (in which case there is a logic in conferring challenge rights only on economic operators, although still in my view unconvincing).
Thank you Nigel for this contribution.
If the latter - to simply open up markets - then the "public" part of public procurement is not much about the public at all, really.
Indeed - on that footing, it simply connotes procurement by the public sector - the explicit reasoning in Court of Justice caselaw on what counts as a "contracting authority" being that public bodies can't be trusted to award contracts, free of national bias, to the best the market has to offer (so the legislation is there to force them to do so), whereas commercial self-interest drives the private sector that way anyway. In these times of austerity some public bodies might wonder how far that approach reflected the real world, but there it is. And dicta in other cases do suggest a more public interest rationale. The Bill didn't really take the opportunity to think these questions through.
If there is to be national or local bias, that has to be via a stated policy. Note that the requirement for a construction product to be UKCA marked before it can be placed on the market in GB is one simple way of trying to achieve that.
Hi David,
Hope you're well. I'm the Public and Administrative Lawyer at JUSTICE - we have a current Working Party looking at outsourcing and administrative justice (https://justice.org.uk/our-work/administrative-justice-system/outsourcing-and-administrative-justice/). One of the issues we are looking at is increasing accountability. Thought this post was interesting - let me know if you'd be interested in having a chat about potential ideas for reform at some point (parmitage@justice.org.uk).
That looks interesting. I will have a read.
Good piece. Thank you.
Is there also a literal in "; and the contracts should be awarded on the basis of not of the best price then on the basis of value for money."? Presumably it should be "if not of the best price then".
I feel strongly that the duty of transparency should in general outweigh that to get best value for money. In other words, the concept "commercial in confidence" should have no place in public sector contracts. This might cause some potential suppliers not to bid; so be it.
Exceptions would be necessary for some cases involving national security. Maybe, exceptionally, certain trade secrets?
I suspect I am illiterate, and so I am sorry for the error you perceive.
I agree with the rest.
The concept of value for money is usually explicitly dealt with in Tenders either by
1. Having an adjacent Quality Bid that can be scored and converted into a monetary amount for direct comparison between bids, or
2. by having 'genuine pre-estimates' of costs associated with an action - an example being the notional cost (or negative value) of a motorway lane closure. Hence keeping a motorway lane open may be the preference even if the Tender Price is slightly higher as a result.
One thing that was extant for a long time in public procurement was the rule that goods and services could only be paid for after said goods and services had been delivered albeit that, as is typical in construction contracts, interim payments could still be made. It is a lot easier for public bodies not to pay for something that is defective, than to pay in advance and then try and seek the money back through legal action.
If you pay taxes then you should have standing for anything done by public bodies with that money.