Regulation 50 – Contract award notices

Commentary

Contract award notices are subjected to the rules and requirements of Regulation 50 PCR2015, which transposes Article 50 of Directive 2014/24/EU. This is the main instrument of public procurement transparency other than debriefings of disappointed candidates and tenderers and is aimed to ensure that the outcome of the process is made public.

Regulation 50 establishes the obligation of contracting authorities to make public certain information related to the award of the contract. This rule is not new and has been around for ages but let’s be honest: compliance across Europe has been lacklustre and the only country where we are aware that compliance has been reasonable (Portugal) only happened when the national law made payments before compliance illegal. And in a country with personal liability for civil servants the incentive is there to comply with the requirement.

In the Regulation we can find a main rule (obligation to publish award notice), a special case (for dynamic purchasing systems) and an exception (for framework agreements).

Main rule – publishing award notices

Under Regulation 50(1), after the award of a contract or the conclusion of a framework agreement, contracting authorities shall send for publication a contract award notice on the results of the procurement procedure not later than 30 days following the decision to award or conclude it. Such notices shall contain the information set out in part D of Annex 5 to Directive 2014/24/EU and be sent for publication in accordance with Regulation 51 PCR2015 (Regulation 50(2)).

The main rule remains that all public contracts should have their award notices published. There are misgivings and reservations about this rule. It imposes an extra layer of work for contracting authorities and may have competition implications. Regarding the first, the move to electronic procurement and the implementation of proper systems should make this painless and pretty much automatic. This could easily become a feature to be included in electronic platform suites/services. The second deserves some additional comments (below).

Regulation 50(3) PCR2015 sets special rules for contract award notices that follow a previous prior information notice (PIN) under Regulation 48 PCR2015. According to this special rule, where the call for competition for the contract concerned has been made in the form of a PIN and the contracting authority has decided that it will not award further contracts during the period covered by the PIN, the contract award notice shall contain a specific indication to that effect. This requirement should be seen as a method to keep the market updated on the actual procurement plans of the contracting authority. This requires a sensible approach, as excessive transparency could be damaging. Consequently, contracting authorities may want to delay disclosure of dropped procurement projects until they are final and irreversible and, in any case, measure the content of their PINs from an early stage.

Special case – dynamic purchasing systems

According to paragraph 5, when dynamic purchasing systems are used, the contracting authority should either make public the information about each contract or, in alternative, do so as a block every quarter. This option seems sensible and again, this could be automated easily with electronic platforms.

Exception – framework agreements

Regulation 50(4) PCR2015 adjusts the requirements for the publication of contract award notices to the working of framework agreements, and determines that contracting authorities shall not be bound to send a notice of the results of the procurement procedure for each contract based on such an agreement. This is meant to simplify the operation of the framework agreement once it is in place. Regulation 50 paragraph 4 excuses contracts awarded via framework agreements from being published, which is another example of that preferential treatment for frameworks in comparison with dynamic purchasing systems.

In our view, there is no fundamental difference between a contract awarded via a dynamic purchasing system or a framework agreements and both should be treated identically. However, that is not the case. Additionally, Regulation 50(4) PCR2015 potentially mistransposes, or at least does not transpose very faithfully, Article 50(2)II Directive 2014/24/EU whereby “Member States may provide that contracting authorities shall group notices of the results of the procurement procedure for contracts based on the framework agreement on a quarterly basis. In that case, contracting authorities shall send the grouped notices within 30 days of the end of each quarter.”

In our view, the interpretation implicit in the PCR2015 is that the entire clause is discretionary for Member States. However, it can also be interpreted that the only space left for Member States in making such a choice is to determine the frequency with which the reporting and publication of the grouped notices needs to be carried out, which is in any case limited to a minimum quarterly periodicity. Imposing no regular reporting and publication obligation on the specific working of the framework agreement whatsoever seems to be in breach of the general principles in Regulation 18 PCR2015 / Art 18 Dir 2014/24/EU and, consequently, at least an instance of poor (if not improper) transposition.

To be sure, the choice under Regulation 50(4) PCR2015 reduces transparency, which can generally be a good thing. However, it does so in a way that deviates from the clear objective of Directive 2014/24/EU, particularly in view of requirements linked to monitoring of procurement of Article 84(2) Directive 2014/24/EU; and it reduces a sort of transparency that is not necessarily of the most damaging for competition, given that it refers to aggregated information that is published with some delay. Hence, there is no good justification for this approach and the PCR2015 incurs in an potential infringement of EU law on this point, at least under a strict view on the relevance of the principles in Regulation 18 PCR2015 / Article 18 Directive 2014/24/EU. Hence, a modification of Regulation 50(4) PCR2015 is desirable, to align the transparency requirements for framework agreements with those for dynamic purchasing systems.

The discrimination goes further (although the fault here lays squarely at the Directive’s feet): even the framework itself or the contracts awarded through it have their information withheld under certain circumstances. Why the different treatment just because of the procedure followed to award the contract? If the substantive reasons are valid enough, surely they should be valid as well for all other contracts where said reasons are also present, irrespective of the award format.

Two opposing views on contract award notices transparency

There is an ongoing debate concerning the level of transparency that contract award notices create, their benefits and drawbacks. This is one of the few issues in which the two authors of this commentary hold widely diverging views concerns procurement transparency and, in particular, the publication of procurement outcomes. Given that both views touch upon important issues which are beyond the scope of the present Commentary, we refer the readers to the entries on our original blogs. Pedro’s pro-transparency stance can be found here, whereas Albert’s concerns with excessive transparency are here.

Proposed citation: Albert Sanchez-Graells & Pedro Telles, (2016) Commentary to the Public Contracts Regulations 2015, available at: www.pcr2015.uk.

Last modified: September 5, 2016 by Pedro Telles

50.—(1) Not later than 30 days after the award of a contract or the conclusion of a framework agreement, following the decision to award or conclude it, contracting authorities shall send for publication a contract award notice on the results of the procurement procedure.

(2) Such notices shall contain the information set out in part D of Annex 5 to the Public Contracts Directive and shall be sent for publication in accordance with regulation 51.

(3) Where the call for competition for the contract concerned has been made in the form of a prior information notice and the contracting authority has decided that it will not award further contracts during the period covered by the prior information notice, the contract award notice shall contain a specific indication to that effect.

(4) In the case of framework agreements, contracting authorities shall not be bound to send a notice of the results of the procurement procedure for each contract based on such an agreement.

(5) In the case of dynamic purchasing systems, contracting authorities shall either—

(a) send a contract award notice within 30 days after the award of each contract based on a dynamic purchasing system, or

(b) group such notices on a quarterly basis, in which case they shall send the grouped notices within 30 days of the end of each quarter.

(6) Certain information on the award of the contract or the conclusion of the framework agreement may be withheld from publication where its release—

(a) would impede law enforcement or would otherwise be contrary to the public interest,

(b) would prejudice the legitimate commercial interests of a particular economic operator, whether public or private, or

(c) might prejudice fair competition between economic operators.