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Simplified, clarified and updated Regulations came into force yesterday. These will help the public sector and util...
Simplified, clarified and updated Regulations came into force yesterday. These will help the public sector and utilities sector buy goods, works and services in a more efficient and effective way.

The updated Regulations implement the new EU Public Sector and Utilities Sector Directives and include new provisions on:

* eProcurement systems, including electronic auctions.

* Competitive dialogue - a procedure which will help purchasers to award contracts for complex projects.

* Framework Agreements.

* Central Purchasing Bodies - contracting authorities that can buy goods, works and services for the benefit of other contracting authorities.

* The scope to take account of social and environmental issues, including the ability to 'reserve' contracts for supported businesses and factories, where more than 50 per cent of employees have disabilities.

* An 'exit' mechanism, for utilities entities, where the market in which they operate is fully open to competition.

* A ban on companies bidding for a public contract if they, or their directors, have been convicted of fraud and corruption offences.

John Healey, Financial Secretary to the Treasury said:

'The Government is keen to develop innovative ways to deliver value for money for the taxpayer. These new regulations will enable public authorities to use modern and imaginative procurement methods, such as eProcurement, to be applied to the future buying of goods and services and encourage small businesses to enter the market place.'

John Oughton, Chief Executive of the Office of Government Commerce,


'The UK is at the forefront in pushing the boundaries of procurement practice. Now public purchasers have much greater scope to use imaginative approaches when buying goods, works and services. There is no longer any excuse to say that 'the rules' do not allow efficient purchasing methods. The new Regulations implement the EU Directives in full and the new provisions on e-auctions, Framework Agreements and Central Purchasing give legal certainty to these tried and tested approaches. There is also greater scope to take account of sustainability in public procurement.'

The new EU Public Sector Directive brings together the existing three EU Public Sector Directives into one document. The new Public Contracts Regulations, which implement the Directive, reflect that consolidation and incorporate provisions on remedies in the event that a contract award is disputed.

John Oughton added:

'OGC is backing this up with practical guidance booklets and a training module. I hope public authorities are up to the challenge to get the best from the flexibility provided in these Regulations to get better value for money for the taxpayer.'

The revised Utilities Directive also becomes law today. Purchasing by telecommunications utilities are no longer covered by the utilities regulations because they now operate in a market fully open to competition at EU level. For utilities in areas which are still

covered - energy, water and transport - the revised rules include a

new 'exit' mechanism which can be activated once the EU market is fully open to competition.


1. The Regulations (Public Contracts Regulations 2006 - SI 2006/5 and Utilities Contracts Regulations 2006 - SI 2006/6) implement EU directives 2004/17/EC and 2004/18/EC in England and Wales. These directives were adopted in May 2004 with a deadline for transposition into national law on 31 January 2006. Scotland is implementing separate regulations covering procurement.

2. OGC undertook wide consultation on the draft Directives themselves, before they were adopted by the EU in 2004. Additionally, two public consultations on the implementation of the Directives were undertaken - the first, in 2004, on the approach to take and the second, in 2005, on the draft Regulations themselves. The OGC website - provides more detail on these latter two consultations.

3. OGC's mission is to work with the public sector as a catalyst to achieve efficiency, value for money in commercial activities and improved success in the delivery of programmes and projects.

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