Regulation 3 – Subject-matter and scope of Part 2

Commentary

General comments on Part 2

Part 2 of the Regulations spans most of the law itself (from Regulation 3 to Regulation 85) and covers what we can consider to be the substantial business of public procurement: scope, general and special rules on procedures for contract award, records and reports. Remedies, rules on contracts not covered by the Directives and others odds and ends can be found on subsequent parts.

As mentioned in previous entries, most of the Regulations follow the Directive 2014/24/EU very closely and none more so than Part 2. In effect, when we think about procurement rules, most of them will be found on this part and more often than not they are quite similar in content (though not in structure or presentation) to the Directive.

 

Regulation 3

Regulation 3 defines their subject-matter and scope of the Public Contracts Regulations 2015, particularly its Part 2. It also aims at clarifying the limits on their applicability as both the content and the value of the contract are concerned. In our view, however this Regulation has very limited content of its own and, despite trying to provide some clarity as to the scope of application of its rules actually muddies some issues.

On the one hand, Regulation 3(1)(a) simply describes the function of this statutory instrument by indicating that its operative part “establishes rules on the procedures for procurement by contracting authorities with respect to public contracts and design contests”. This seems to be superficial and unnecessary, as the purpose of the instrument is abundantly clear in the Explanatory Memorandum. Moreover, from a strictly conceptual point of view, this description is partly tautological, as design contests are procedures in themselves [see definition in Regulation 2(1)]. Hence, nothing would have been lost if this clause had been avoided as, indeed, Directive 2014/24 does not include any similar article.

On the other hand, Regulation 3(1)(b) stresses that the contracts covered by Part 2 rules are those of “a value estimated to be not less than the relevant threshold mentioned in Regulation 5.” This simply aims at freeing below-threshold contracts from compliance with Part 2, provided that they “are not excluded from the scope of this Part by any other provision in this Section”–or, in other words, provided they are not mixed contracts that must be tendered under alternative rules in view of the criteria set out in Regulation 4. Hence, Regulation 3(1)(b) is also an unnecessary repetition of what is established in Regulations 4 and 5. Therefore, from a logical point of view it is not strictly necessary.

Finally, Regulation 3(2) stresses that the rules in the PCR2015 are “subject to Article 346 of TFEU”, which allows Member States to derogate from Internal Market rules when their essential security interests are at stake. On this particular topic please see Commission’s interpretative communication on the application of Article [346] of the Treaty in the field of defence procurement (COM(2006) 779 final) and, for discussion, A Georgopoulos, ‘The Commission’s Interpretative Communication on the application of Article 296 EC in the field of defence procurement’ (2007) 3 Public Procurement Law Review NA43-52].

In our view, however, Regulation 3(2) is also not strictly necessary. To begin with, because the need to take into consideration the special requirements derived from the application of Art 346 TFEU in the field of defence procurement resulted already in Directive 2009/81/EU on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security. The Directive has been implemented through the Defence and Security Public Contracts Regulations 2011 (SI 2011/1848, as amended). On this topic please see B Heuninckx, ‘The EU Defence and Security Procurement Directive: trick or treat?’ (2011) 1 Public Procurement Law Review 9-28, and M Trybus, ‘The tailor-made EU Defence and Security Procurement Directive: limitation, flexibility, descriptiveness, and substitution’ (2013) 38(1) European Law Review 3-29.

Secondly, because the interaction between the rules in the PCR2015 and defence and security-related issues is also expressly detailed in Regulation 15 on defence and security procurement. Consequently, this final clause is also unnecessary.

Generally, then, Regulation 3 is superfluous and its inclusion despite the nonexistence of an equivalent provision in Directive 2014/24/EU seems to indicate both an intention to overemphasize the ‘limited’ scope of application of the PCR2015 by creating unnecessary repetition of the rules that restrict their scope and a certain fear that coordination with other mandatory instruments (either of an EU or domestic origin) may be faulty. On this last point, the worry of the UK legislator must be shared, as the system that results from the existing substantive procurement directives creates a fiendish web of cross-referrals that generates significant uncertainty when mixed contracts are concerned. Hence, the need for specific rules at EU level to simplify this entangled web couldn’t be overemphasized. In the meantime, though, the options of domestic legislators are limited and the strategy followed in the PCR2015 of ‘better be safe than sorry’ is understandable, albeit resulting in unnecessary repetition and, in certain points, tautology.

Last modified: July 4, 2016 by Pedro Telles

3.—(1) This Part establishes rules on the procedures for procurement by contracting authorities with respect to public contracts and design contests which

  • have a value estimated to be not less than the relevant threshold mentioned in regulation 5, and
  • are not excluded from the scope of this Part by any other provision in this Section.

(2) This Part is subject to Article 346 of TFEU.