Tag Archives: public procurement

Scoping the impact of Brexit for NHS procurement

By Dr Albert Sanchez-Graells, Senior Lecturer in Law (University of Bristol Law School).

NHS England spends over £20 billion every year on goods and services, which typically accounts for around 30% of the operating costs of each hospital. A significant part of the remainder of NHS non-salary budget involves the commissioning of health care services. This expenditure and commissioning is controlled by NHS procurement rules, which in part derive from EU law. Different procurement rules apply in different countries within the UK, and both Scotland and Northern Ireland both have separate regulatory schemes. Even though this post only focuses on the situation in England, some issues reflect broader concerns in the UK context. Generally, NHS procurement rules are regularly criticised for imposing excessive red tape and compliance costs on the NHS, and calls for NHS procurement reform to free it from such strictures are common.

In this context, Brexit could be seen as an opportunity to overhaul NHS procurement and to move away from the perceived excesses of EU law (see eg Cram: 2016). However, I think that it is far from clear that such reform could not fit within the blueprint of EU law, and that most of the constraints on NHS procurement rather derive from independent decisions adopted by the UK over the last 25 years. Moreover, from an economic perspective, Brexit will probably hurt the functioning of the NHS (including its procurement), with or without significant regulatory reforms.

This post is based on my presentation at the event Brexit, Regulation and Society, held by ManReg on 13 June 2017, and concentrates on two issues. First, does EU law prevent significant reforms of NHS procurement and, if so, can Brexit suppress such constraints? Second, is the way the Brexit process is unfolding conducive to an improvement of NHS procurement, both from an economic and a regulatory perspective? Continue reading

Transparency in public procurement is necessary, but not for all to see

By Dr Vitali Gretschko, Head of the Market Design Research Group (ZEW Mannheim) and
Dr Albert Sanchez-Graells, Senior Lecturer in Law (University of Bristol Law School).*

The airport Berlin-Brandenburg, Stuttgart 21, and the Elbphilharmonie have one thing in common. Irregularities in the procurement process and delays in execution led to immense cost explosions to be covered by taxpayers. Thus, given the risks of corruption, favouritism and misuse of public funds, the award and management of public contracts requires a high level of scrutiny to avoid mismanagement and waste.

Moreover, even when things go well, improvements in public procurement law can have significant effects. Today, over 250 000 public authorities in the EU spend around 14 per cent of the GDP on the purchase of services, works, and supplies. Even small relative efficiency gains through carefully crafted rules can therefore result in savings in the billions. Therefore, the design of procurement rules need to reach a balance between safeguarding economic efficiency through competition and ensuring the proper level of transparency and accountability. Continue reading

A law and political science analysis of the reform of EU public procurement rules

By Dr Albert Sanchez-Graells, Senior Lecturer in Law (University of Bristol Law School).

olykke-reformationMy most recent edited collection has now been published:
GS Ølykke & A Sanchez-Graells (eds), Reformation or Deformation of the EU Public Procurement Rules (Edward Elgar, 2016). It features contributions from a gender-balanced group of 16 young political science and EU economic law scholars based in 9 different EU/EEA Member States, including a number based at top UK universities. It is the result of a two year research project generously funded by the Copenhagen Business School and the Danish Gangstedfonden.

Using an innovative  interdisciplinary ‘law and political science’ methodology, the book carries out a critical assessment of the reform of the EU public procurement rules in the period 2011-2014. It does this by a detailed assessment of the initial Commission proposal for new rules, the travaux preparatoires behind it, as well as the several inter-institutional negotiation and compromise texts that resulted in the 5th generation of EU public procurement directives in 2014. Continue reading

The EU public procurement remedies directive needs some revision, and the Commission should not shy away from it

By Dr Albert Sanchez-Graells, Senior Lecturer in Law (University of Bristol Law School).

my-performance-reviewEU public procurement law relies on the specific enforcement mechanisms of the Remedies Directive, which sets out EU requirements of administrative oversight and judicial protection for public contracts. Recent developments in the case law of the CJEU and the substantive reform resulting from the 2014 Public Procurement Package may have created gaps in the Remedies Directive, which led the European Commission to publicly consult on its revision in 2015. One year after, the outcome of the consultation has not been published, but such revision now seems to have been shelved. In a chapter* I am contributing to an edited collection, I take issue with the shelving of the revision process and critically assesses whether the Remedies Directive is still fit for purpose. Continue reading

Keeping Procurement on the Rails: A Legal Perspective on UK Passenger Rail Franchising

By Dr Luke Butler, Lecturer in Law (University of Bristol Law School).

© Colin G. Maggs, Ex LMS 46100 'Royal Scot' rests in platform 13 at Bristol Temple Meads having arrived from the north in July 1961

© Colin G. Maggs, Ex LMS 46100 ‘Royal Scot’ rests in platform 13 at Bristol Temple Meads having arrived from the north in July 1961

Since privatisation, passenger rail has fallen victim to a complex web of institutional and contractual relations, a matrix of network owners, service providers, regulators and oversight bodies with ever-changing remits. At the risk of oversimplification, rail provision involves the formal separation of Network Rail’s management of the infrastructure (the track etc) from the operation by Train Operating Companies (“TOCs”) of rail services on that infrastructure. The Department for Transport (“DfT”) opens the operation of rail services up to competition through a procurement process and invites qualified TOCs to bid, although some rail franchises may be directly awarded without competition. In turn, TOCs pay to access the network and lease rolling stock. All involve multiple contracts sharing subsidies, premiums and risks.

Post-privatisation, it was predicated that the contractualisation of rail would lead to “government by lawyers”. Yet, I have always been surprised at the relatively limited engagement of legal research on UK rail since.[1] This blog seeks to renew conversation by arguing that there is a high degree of legal and practical uncertainty in the route to effective franchise procurement and which has not been significantly improved by recent reforms.[2] Continue reading

Would A Brexit Significantly Change The Way The English Public Sector Buys Supplies And Services?

By Dr Albert Sanchez-Graells, Senior Lecturer in Law (University of Bristol Law School).

download (1)With a few days to go for the all important UK referendum on EU membership, it may be worth focusing the analysis on one of the issues that can affect trade between the UK and the EU to a very large extent: that is, the regulation of public contracts.

There has been some serious thought put into the potential implications of Brexit for the ways in which the UK public sector buys supplies and services—or, in technical terms, on the Brexit implications from a public procurement perspective. Academics, such as Dr Pedro Telles, and practitioners such as Michael Bowsher QC, Peter Smith, Roger Newman or Kerry Teahan have started to reflect on the likely consequences from a legal and business case perspective. Continue reading

Can English universities adopt a more commercial approach and stop complying with EU public procurement law?

By Dr Albert Sanchez-Graells, Senior Lecturer in Law (University of Bristol Law School).

© NTSU magazine.

© NTSU magazine.

Since the introduction of student fees, and particularly after the 2011 White Paper ‘Students at the Heart of the System’, English universities have been exposed to increasing commercial pressures. This has encountered significant opposition, and both the path of reform of the higher education sector and the resistance against it are echoed overseas.

However, this trend will not reverse in the immediate future, whatever the outcome of the consultation based on the 2015 Green Paper ‘Fulfilling our Potential: Teaching Excellence, Social Mobility and Student Choice’. English universities will continue needing to adapt to increasing commercial pressures. However, they seem to have the cards stacked against them. English universities are not entirely free to pursue whichever commercial approaches they see fit. Their activity is highly regulated, and they are bound by significant constraints, both under domestic and EU law.

One area of increasing controversy is the possibility for English universities to move away from what are considered burdensome and restrictive public procurement procedures and adopt a strict commercial approach to the way the purchase supplies, services and commission works. Such flexibility would allow them to choose their suppliers and contractors more freely, reduce the red tape associated to their day to day operations, and some claim that this would unleash innovation. Unsurprisingly, this is catching the attention of practitioners in the field, and the Higher Education Procurement Academy is prioritising this issue. The trouble is that, while some practitioners have made claims supporting the adoption of such a commercial approach, others consider that reforms in the English higher education system are insufficient to warrant such a change.

In order to tackle these issues, together with my colleague Andrea Gideon, I looked in detail into the constraints that EU public procurement law impose on English universities. In our paper*, Continue reading

The Scope for Collective Bargaining in Posting and Procurement––What Might Come From Recent Court of Justice Case Law and the Proposed Reform of the Posting of Workers Directive?

By Prof Tonia Novitz, Professor of Labour Law (University of Bristol Law School).

Modern Times, starring and directed by Charlie Chaplin

Modern Times, starring and directed by Charlie Chaplin

Workers posted from one European Union (EU) Member State to another would seem to be in need of urgent social protection. Recent evidence produced by the European Commission indicates that, between 2010 and 2014, the number of workers posted from one EU State to another increased by almost 49% (in total approximately 1.9 million workers). More importantly, posted workers tend to earn substantially less than local workers, with reports of income of less than 50% than that usually paid in a given place for the same job. Further, there are indications that, in certain sectors, such as the construction industry, posted workers may be at greater risk of harm through violation of health and safety standards. The reasons may seem obvious, since the language, laws and legal system of a host State are likely to be foreign to posted workers who can also be left without effective local trade union representation.

In the Laval case (C-341/05), the capacity for minimum wages (and other work-related benefits) to be set for posted workers by collective bargaining by trade unions in the host State was cast into doubt. Collective bargaining (and the collective action that generated such bargaining) was considered to be too unpredictable in terms of effect and outcome, creating an unjustifiable barrier for the free movement of service providers. It was only in the case of ‘social dumping’, a nebulous term of uncertain reach, that collective action aimed at conclusion of a collective agreement could be permitted in respect of a particular group of posted workers. Instead, the Court relied on Article 3(1) of the Posting of Workers Directive 96/71/EC (PWD), which envisages only the setting of minimum standards in relation to certain matters. This may be done by ‘law, regulation or administrative provision’ but also by ‘collective agreements or arbitration awards which have been declared universally applicable…’ in accordance with Article 3(8) insofar as they concern’ activities listed in the Annex largely pertaining to the construction industry. EU States may also take the option to give such legal effect to universally applicable collective agreements in other sectors in accordance with Article 3(10). Through this prescriptive treatment of the appropriate limits of collective bargaining, what had been seen by some as a ‘floor of rights’ in PWD came to be a ‘ceiling’. If the national measures taken in respect of protection of the rights of posted workers did not fit within the ambit of the precise terms set out in the PWD, then they were impermissible, despite the apparent scope in Article 3(7) for a more generous interpretation of the Directive ‘more favourable to workers’. Continue reading