Since late last year, when the UK Government accepted the European Commission’s view that Registered Social Landlords (“RSLs”) are public sector organisations, RSLs have been obliged to comply with the regulations governing public procurement (“the Regulations”). These impose procedures and timetables for the advertising and awarding of contracts for works, services and supplies by RSLs. From 1 February 2006 the existing regulations will be consolidated and replaced by a single new regulation (“the new regulation”).

The new regulation is intended to make public procurement more flexible and more cost effective. This has been achieved by:

• Expressly allowing RSLs to establish framework agreements with selected suppliers. Framework agreements replace RSLs existing lists of approved suppliers. The provisions of the new regulation dealing with frameworks were covered in a previous article.
• The introduction of a new competitive dialogue procedure, which permits, in certain circumstances, discussion between the RSL and a number of prospective suppliers as to the specification of the contract before the contract is finally awarded.
• Allowing environmental factors to be taken into account in assessing a potential supplier’s suitability.
• Encouraging greater use of electronic procurement, particularly through e-auctions.

In addition the Government is proposing to introduce legislation as a result of the Alcatel case to require RSLs to provide for a delay between the decision to award a contract and the signature of the contract to allow unsuccessful bidders to challenge the way in which the contract has been awarded.

The competitive dialogue procedure

The competitive dialogue procedure is available in cases where the RSL will not be able from the outset to determine the technical specification or financial/legal structure of the proposed project. It is anticipated that the procedure will be used for complex IT projects involving the procurement of hardware and bespoke software.

The procedure allows an RSL to enter into a dialogue with selected bidders, of which there must be a minimum of three, to identify the best means of meeting its objectives for the project. All aspects of the contract can be negotiated with the prospective bidders with whom the dialogue is carried out. Once the RSL has identified its preferred solution it asks the bidders to submit their bids and must select the supplier on the basis of the tender that is most economically advantageous to it.