OJEU procurement procedures
The European Union Procurement Directives establish public procurement rules throughout the European Union and apply to any public purchases above the defined thresholds. The purpose of the directives is to open up public procurement within the European Union and to ensure the free movement of supplies, services and works. The directives are enacted in the UK by The Public Contracts Regulations.
Public projects must comply with the regulations if the value of contracts is above specified thresholds. Aggregation rules apply to projects tendered in parts to prevent clients from avoiding the requirements of the regulations by simply dividing projects up into contracts that are below the threshold.
Private projects may be required to comply with the regulations if they are publicly subsidised (for example Lottery funded projects).
The regulations set out rules requiring that such contracts must be advertised (contract notices published) in the Official Journal of the European Union (OJEU) (The requirements for OJEU contract notices can be found on the simap website). This is of particular importance because, unless OJEU rules are considered in the very early stages of a project, the time taken to advertise contracts can cause significant delays (up to 52 days).
The time allowed for tenderers to respond to a contract notice can be reduced under certain circumstances (such as if a prior information notice (PIN) was published or if accelerated procedures are being used).The regulations also describe allowable procedures to avoid discrimination against potential tenderers on the grounds of their origin in a particular member state:
- Specification (see OGC EU Procurement guidance: Non-discrimination in technical specifications for more information).
- Criteria for rejection (legal, financial or technical unsuitability).
- Award of contracts (selection of the most economically advantageous rather than the lowest tender).
Ideally, contracts for goods or services that might arise during the course of the project and could be subject to the OJEU procurement rules should be advertised at the outset of the project or soon as possible afterwards. This may include contracts requiring early specialist design input by the contractors.
The main construction contract might be advertised once planning permission has been obtained and there is some certainty that the project will proceed. Failure to advertise such contracts well in advance of the goods or services actually being required could result in long delays.
- Open procedure. There is no pre-qualification process or short-listing process. Anyone that responds to the OJEU notice is issued with the full contract documentation.
- Restricted procedure. There is a pre-qualification process, and only short-listed candidates are invited to tender.
- Competitive dialogue procedure. There is a pre-qualification process. Short-listed candidates are invited to take part in a dialogue process during which the nature of the project may be discussed and possible solutions may be developed. When the dialogue process is complete, final tenders are invited.
- Competitive negotiation procedure. There is a pre-qualification process. Short-listed candidates are invited to take part in a negotiation process. This process does not have to follow any particular rules, and has no formal ending. This means that negotiations can continue even after the preferred bidder has been appointed.
NB: In January 2014, new rules were agreed by the European Parliament that will:
- Introduce a new criterion of the "most economically advantageous tender" (MEAT) in the award procedure.
- Introduce "Innovation Partnership" to allow public authorities to call for tenders to solve a specific problem without pre-empting the solution.
- Introduce a "European Single Procurement Document" based on self-declarations so that only the winning bidder will have to provide original documentation.
- Introduce new rules on sub-contracting and tougher provisions in relation to "abnormally low bids".
- Make clear there is no requirement for the privatisation of public enterprises providing services to the public.
 Related articles on Designing Buildings Wiki
- Appointing consultants.
- Auction theory.
- Balanced scorecard.
- Best value.
- Construction contract.
- Contract documentation.
- Government Construction Strategy.
- OGC (Office of Government Commerce - now absorbed into the Efficiency and Reform Group (ERG) within the Cabinet Office).
- Public procurement.
- Procurement route.
- Public contracting authority.
- Social Value Act.
- Tender documentation.
- Tender processes.
 External references
- The British Property Federation has created a useful flow chart to help assess whether a project nneds to follow the OJEU process. WHEN IS AN OJEU OR OTHER COMPETITION REQUIRED FOR A LAND DEAL? 2013
- See Simap: Information about European public procurement for guidance on OJEU procurement rules.
- OGC: Introduction to the EU Procurement Rules.
- OGC: Guidance on thresholds.
- OGC: Guidance on OJEU notices.
- The Public Contracts Regulations 2006.
- OGC: Guidance on pre-qualification questionnaires.
Featured articles and news
Urban Heritage, Development and Sustainability: international frameworks, national and local guidance.
What will the General Data Protection Regulations (GDPR) mean for you when they come into force in May?
Business Secretary chairs a new taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation.
Sir John Armitt is appointed the new chair of the National Infrastructure Commission.
High quality and high density homes - is it what we need or is it storing up trouble?
Government announces its intention to strengthen planning rules to protect music venues and neighbours.
National Audit Office reports that there is little evidence that PFI offers better value than other forms of contracting.
What is liquidation and how does it apply to contractors in the construction industry?
Scrutiny is placed on Carillion's controversial 2013 decision to extend subcontractor payment terms to 120 days.
RSHP unveil their involvement in a boundary crossing which will provide a new entry point into Hong Kong.
With PFI currently under the spotlight due to Carillion, this introductory article explains what they are.
Estimates suggest that up to 30,000 small firms could be at risk of non-payment as a result of Carillion's collapse.