Electronic procurement

Under the new regulations all communication and information exchange for above-threshold procurement, including electronic submission of pre-qualification questionnaires and tenders and ‘call offs' under framework agreements, must be carried out using electronic means of communication.

‘Electronic means' equals ‘electronic equipment for the processing (including digital compression) and storage of data which is transmitted, conveyed and received by wire, by radio, by optical means or by any other electromagnetic means'.

However, as explained below, this obligation is being phased in.

Dynamic purchasing systems (DPS) and electronic auctions are by definition already electronic and, in addition, the regulations now explicitly allow tenders to include electronic catalogues.

Important changes have been made to the rules governing the DPS and it is likely to be used much more as a consequence. The rules on electronic auctions remain essentially the same as before.

The EU has agreed a broader strategy for ‘end-to-end eProcurement' and as part of this a further European directive on eIectronic invoicing, discussed below, has been adopted. 

What is new?

Electronic communications
The obligation to use electronic means of communication for procurement, including submission of PQQs and tenders and ‘call-offs' under framework agreements, only comes fully into effect in October 2018 (note that central purchasing bodies must comply from April 2017).

However, the regulations already require councils to send notices electronically and to make procurement documents available electronically.  And certain time limits can be reduced if electronic submission of tenders is allowed.

The European Single Procurement Document (ESPD, see selection) must be made available in fully electronic form from April 2017.

The regulations lay down requirements for the equipment that is used for electronic communications, to ensure it is as widely accessible as possible, together with security measures.

Under the separate Electronic Invoicing Directive a new European standard for core electronic invoices will be developed and councils will be required to accept invoices received in this form. This will not become obligatory before 2018 (and the UK Government has discretion to postpone it for another year for councils).

However, it has already been made policy for central government departments to accept ‘unstructured' electronic invoices and work is underway on arrangements to accept structured electronic invoices.

There are no plans at European level to make electronic evaluation of PQQs or tenders mandatory. And there is no obligation to use electronic tools for contract or supplier management. There is nothing in the regulations to prevent councils using these tools either.

Dynamic purchasing system
The DPS is a fully electronic system designed primarily to buy ‘off the shelf' in dynamic markets that are open to new entrants.  New suppliers can join at any time. The DPS is an ‘open' system. Compare framework agreements which are closed to new suppliers once set up.

All communication in connection with the DPS must be electronic. The DPS has been available as a tool for some time but the new regulations have made important changes to the rules governing it:

  • Now awarded using a modified restricted procedure instead of the open procedure.
  • Can be divided into categories of services, works or products (e.g. by geographical area).
  • No longer a requirement to publish a further notice each time the council wants to award contracts using the system (which was a cumbersome feature of the old rules).
  • Four year limit on duration has been removed.

A type of dynamic purchasing system is already being used successfully in social care. The has been referred to as a ‘pseudo-DPS' because social care placements used to be a ‘Part B' service meaning contracts did not need to be awarded under the full EU rules. Going forward, social care comes under the Light Touch Regime (LTR). A type of DPS can continue to be used for these services. The LTR will allow councils the opportunity to modify the system (where necessary) to suit the requirements of social care.