The Public Supply Contracts Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

These Regulations implement in its entirety Council Directive 93/36/EEC co-ordinating procedures for the award of public supply contracts (OJ No. L199, 9.8.93, p.1). This Directive consolidates the provisions of Council Directive 77/62/EEC co-ordinating procedures for the award of public supply contracts (OJ No. L13, 15.1.77, p.1), as amended by Council Directives 80/767/EEC (OJ No. L215, 18.8.80, p.1) and 88/295/EEC (OJ No. L127, 20.5.88, p.1) and amends them to conform more closely with similar measures for public services and works contracts (Council Directives 92/50/EEC (OJ No. L209, 24.7.92, p.1) and 93/37/EEC (OJ L199, 9.8.93, p.54) respectively).

The Regulations apply to certain public bodies called in the regulations “contracting authorities” (regulation 3) when they are seeking offers in relation to certain contracts for the purchase or hire of goods called in the Regulations “public supply contracts” (regulations 2(1) and 5). They deal in particular with the treatment to be accorded to suppliers or potential suppliers who are nationals of and established in a relevant State, which is defined to include member States, Hungary, Poland, Iceland, Norway and as from the date the Agreement on the European Economic Area is in force in relation to it, Liechtenstein (regulation 2(1)). Certain contracts are excluded from the application of the Regulations, principally where the contracting authority is exercising activities falling within the provisions of the Utilities Supply and Works Contracts Regulations 1992 (S.I. 1992/3279), secret contracts or contracts for the purchase of certain defence material or connected with international agreements (regulation 6) and those contracts where the value of the contract is beneath the threshold for coverage (regulation 7).

The principal requirement of the Regulations is that, in seeking offers in relation to a public supply contract, a contracting authority must use one of three procedures: the open procedure, whereby any person who is interested may submit a tender; the restricted procedure whereby only those persons selected by the contracting authority may submit tenders; and the negotiated procedure whereby the contracting authority negotiates the terms of the contract with one or more persons selected by it. The Regulations lay down provisions for making the choice of procedure. The open or restricted procedure may be used in all circumstances but the negotiated procedure may only be used in certain limited circumstances (regulation 10).

The contracting authority is required to publicise its intention to seek offers in relation to a public supply contract in the Official Journal of the European Communities although this requirement is dispensed with in most circumstances when the negotiated procedure is used. The form of the advertisement and the information which it has to contain in relation to the proposed contract is specified in Schedule 3. If the notice is also to be published in the United Kingdom press it must be limited to the information published in the Official Journal and must not be published before the notice is sent to the Official Journal (regulation 27). The various procedures also lay down the time to be allowed for the response by potential suppliers to the invitations and for obtaining relevant documents. The Regulations also specify the matters to which the contracting authority may have regard in treating suppliers as ineligible or in selecting suppliers to tender for or to negotiate the contract (regulations 11 to 13). The detailed rules for the selection of suppliers are laid down and relate to their business and professional status, their economic and financial standing and their technical capacity. The contracting authority is restricted in the information which it may request to demonstrate these matters (regulations 14 to 17).

Where a contracting authority decides to award a public supply contract, it is required to do so on the basis either of the offer (including in-house bids) which offers the lowest price or the one which is the most economically advantageous (regulation 21). If requested by an unsuccessful supplier the contracting authority must provide reasons as to why the supplier was unsuccessful (regulation 23).

There are various other requirements in the Regulations. The most important is the requirement that where the contracting authority wishes to lay down technical specifications which the goods must meet all such specifications must be specified in the contract documents and that, except in certain circumstances, these specifications must be defined by reference to European specifications. This includes a British standard which implements a European standard or a European technical approval. It is also provided that, except where it is not possible to describe the goods otherwise, the technical specifications may not refer to goods of a specific make or source or to a particular process which have the effect of favouring or eliminating certain goods or suppliers (regulation 8).

Previously only GATT contracting authorities were required to publicise in the Official Journal at the beginning of their financial year certain public supply contracts which they expect to award during the course of that year: however, now all contracting authorities are required to do so (regulation 9). All contracting authorities are required to publicise in the Official Journal information about the public supply contracts they have awarded (regulation 22). There is a requirement that a body granted a special or exclusive right to carry on a service for the benefit of the public should be subject to a duty not to discriminate in awarding a supply contract on the grounds of nationality against nationals of a relevant State or on the grounds that the goods to be supplied originate in another relevant State (regulation 24). The contracting authorities are also required to submit various reports in respect of public supply contracts awarded by them, in particular, an annual or biennial report (regulation 25).

These Regulations also implement, to the extent that it relates to Directive 93/36/EEC, Council Directive 89/665/EEC on the co-ordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ No. L395, 30.12.89, p.33). The Regulations provide that the obligation on a contracting authority to comply with the Regulations, and with any enforceable Community obligation in relation to the award of a public supply contract, is a duty owed to suppliers. A breach of the duty is not a criminal offence but is actionable by a supplier. Proceedings are assigned to the High Court in England, Wales and Northern Ireland and to the Court of Session in Scotland. The court is given power to grant appropriate interim and final relief and to award damages except that, where the contract in respect of which there has been an infringement has already been entered into, the court’s powers are restricted to awarding damages (regulation 29).