Procurement directive risks contractor anger

Public sector clients are facing increasing pressure to make sure they get their procurement process right under the new EU public procurement directive, or risk losing industry interest. The warning comes from legal experts, who told CJ that it was now only a matter of time before a public sector department incurs the wrath of the construction industry, as the directive starts to bite. The directive, which came into effect earlier this year, insists that clients must enter into a competitive dialogue rather than the traditional competitive negotiated procedure.

“This means that bidders are kept in the running much longer than before and involves much greater negotiation with the client,” said one expert. “This will increase the risk that ideas will be poached by other bid teams and raises all sorts of questions on intellectual rights. “If a client fails to keep data within its four walls, all hell could break loose. It would mean bidders will lose confidence in the whole process and turn to other routes of work. This could have a domino effect across all public sector departments.” Richard Dyton, partner at Simmons & Simmons, agreed there were risks. “Certainly there is a risk that sensitive information may leak out because of the longer procurement period. “Also, local authorities will need to keep their evaluation teams strictly compliant with confidential processes.”

One contractor told CJ that the new process was already hitting its bid costs hard, as it was now having to keep key team members in the process for much longer to secure key contracts. Pressure on the supply chain is being increased by the need for clients, under the directive, to spend much more time making OJEUs very clear and prescriptive before they are advertised. Once published, the original specification cannot be changed. On the positive side of the new directive, public sector procurers can cover any bid costs incurred by the losing bidders, as long as it is stated from the outset. Ironically, CJ understands that no public sector bodies have offered this service to date.

[Contract Journal, 18 October 2006, p 4]