Public Procurement Matters May 2011

Top 10 tips for OJEU-compliant ways of saving money

The general message of the moment is that the UK public sector must spend less to get more.  Last year in the context of the government’s ’Comprehensive Spending Review’, Sir Philip Green concluded that the overall central government procurement function is run badly and with gross inefficiencies occurring repeatedly.  He adds that with the government’s buying power, the public sector should get better deals all round and save lots of money, (or at least, Top Shop would if given that level of spend)!

So what to do about it?  Many public authorities tie themselves in knots over this and particularly concern themselves with public procurement (otherwise known as “OJEU”) laws that require mandatory open advertising of contracts over certain values and respect of a variety of tendering procedures. 

These laws are complex and compliance in itself can tie up a lot of resource in ensuring everything is done right.  To make matters worse, the last two to three years has seen successful legal challenges (on OJEU infringements) against local authorities rocket upwards. 

On top of that, the law has even changed now to heighten the risk if the OJEU process is not run correctly.  The consequences of procurement breach by local authorities now include the possibility of authorities being fined and contracts being declared ineffective even after they have been entered into (not to mention damages to third parties).

Many authorities feel caught between a rock and a hard place – they want to make savings via flexible procurement, but feel trapped and paranoid about breaching OJEU rules.  In this edition of Public Procurement Matters, we consider a “top ten” list of cost saving ideas for procurement that do not breach the law. 

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The content of this newsletter is for information only and should not be relied upon as a substitute for legal advice. Copyright 2011 Cobbetts LLP - All Rights Reserved - May 2011