EU
Reform of Public Procurement Law
The European Commission set out its plan to pursue competitiveness and decarbonisation, in a Clean Industrial Deal and Action Plan for Affordable Energy. An area earmarked for change is public procurement law, as the Commission plans to revise the Public Procurement Framework.
We look at the detail in our briefing: Clean Industrial Deal: Reform of Public Procurement Law.
Procurement Rules on Public Passenger Transport Services
In Case C-684/23, a Latvian contracting authority launched an open tendering procedure to award the right to provide public transport services by bus on routes in Ventspils. It awarded the contract to a company the entire capital of which was held by the municipality of Ventspils.
Under Article 5(2) of the Regulation on public passenger transport services by rail and by road, service contracts or public service contracts as defined in the public procurement Directives for public passenger transport services by bus or tram shall be awarded in accordance with the procedures provided for under those Directives. Under Article 5(2)(c), an internal operator may participate in fair competitive tenders as from two years before the end of its directly awarded public service contract (under the condition that a final decision has been taken to submit the public passenger transport services covered by the internal operator contract to fair competitive tender and that the internal operator has not concluded any other directly awarded public service contract).
In a request for a preliminary ruling, the CJEU stated that this means that the contracting authority is not required (where an internal operator, to which a public service contract has previously been directly awarded by a competent local authority, participates in a competitive tendering procedure) within the meaning of Article 5(3), to verify that operator's compliance with the conditions set out in Article 5(2)(c) in order to determine whether that operator is entitled to participate in that procedure.
IRELAND
Framework Agreements
The Court of Appeal dismissed Word Perfect's appeal in Word Perfect Translation Services Ltd v Minister for Public Expenditure and Reform in [2025] IECA 45.
We previously looked at the High Court's 2022 decision dismissing Word Perfect's challenge to the procurement by the Minister for Public Expenditure and Reform of interpretation services, which focused on two main arguments:
- Division into four lots: Word Perfect argued that the division of the procurement into lots was unlawful because Article 46(1) (Division of contracts into lots) of Directive 2014/24/EU provides for "a contract" and not "contracts" to be divided into lots, whereas the title of the tender document was "Four Single Supplier Contracts for the provision of Interpretation Services ...". The High Court considered that Word Perfect's interpretation "runs contrary to the overall objective of the Procurement Directive, which ... is to make every possible effort to have procurement divided into lots in order to facilitate the participation of SMEs in the tender process". The term 'contract' in Article 46(1) referred to a prospective procurement which may be divided into lots in the context of being at the preparatory stage of the tender process.
- 'One lot rule': Tenderers could submit tenders for any or all of Lots 1 to 4 but were limited to being awarded one lot. They could indicate their preference and, if identified as the most economically advantageous tender ("MEAT") for their first preference, they would be awarded that lot. If they were MEAT for another lot also, that lot would be awarded to the next MEAT. Word Perfect argued that there may only be four tenderers for the four lots and so the tenderers would have no incentive to put in competitive bids. Word Perfect made several other arguments, which the High Court did not accept. It did not find that the 'one lot rule' breached Articles 18 of the Directive (which prohibits design of the procurement with the intention of artificially narrowing competition). It noted that the express provisions in Article 46(2) permitting the contracting authority to limit the number of lots that are awarded to one tenderer meant that, if that tenderer was the MEAT for more than one contract, then it logically followed that the MEAT would not necessarily be awarded for a contract.
The Court of Appeal agreed with the High Court's approach. In addition to expressly providing for and encouraging the division of public contracts into lots, Article 46 makes provision for a second significant change to the pre-existing situation by enabling contracting authorities to limit the number of contracts or lots that could be awarded to any one tenderer. The Minister relied on both of these significant changes in the 2014 Directive in designing the RFT, and its approach had been lawful.
Among the Court's many conclusions was that it is a legitimate objective when considering whether to limit the number of lots that can be awarded to a single tenderer to seek to preserve competition for future public contracts in the relevant market. Further, there was no requirement in Article 46 for the 'one lot rule' and its objectives to be "linked to the subject matter of the contract" the subject of the procurement.
As regards Article 18(1), the Court of Appeal considered that an objective of the 'one lot rule', was not to artificially narrow competition but rather to widen competition by promoting greater SME participation and the opening up of the procurement beyond just the incumbents, as well as to preserve competition at the end of the proposed new framework. The Minister/OGP did not have the intention to "excessively narrow competition" or to "unduly" favour or disadvantage certain operators.
The Court of Appeal also upheld findings of the High Court in relation to arguments that were made around freedom to provide services, the European Charter of Fundamental Rights, the duty of sincere cooperation, irrelevant considerations, bias, expert evidence, and burden of proof.
Fee Adjustment Mechanism
The Office of Government Procurement indicates that guidance to support the new Fee Adjustment Mechanism (to take account of inflation in consultants' contracts) is to be made available. Further information is available at Guidance and Tool to Support New Fee Adjustment Mechanism | Capital Works Management Framework.
The Conditions of Engagement – Fee Adjustment Factor will be published in Q4 2026 and then quarterly. The OGP indicates that this is the earliest date it can be published because of the periods for which tendered fees and hourly rates will remain fixed under contracts.
UK
New Procurement Regime in force
The provisions of the UK's Procurement Act 2023 are now in force. We look at the new regime in our briefing: All Change in Public Procurement – Procurement Act 2023.
The UK Government has also published its National Procurement Policy Statement, a statutory statement setting out strategic priorities. (This Statement does not apply to procurements under transferred Northern Irish procurement arrangements or authorities.)
Procurement Review Unit, Exclusions and Debarment
The UK Government announced that it will establish a Procurement Review Unit which will have responsibility for oversight of the new regime. Further guidance has also been published by:
- the UK Competition and Markets Authority on Exclusion and debarment on competition grounds - what suppliers and contractors need to know, and
- the Cabinet Office on Guidance: Exclusions Annex 2: National Security Grounds.
In a separate announcement, the UK Government indicated that new powers under the Act (to commence a debarment investigation) will be used to investigate several organisations criticised in the report of the Grenfell Tower Inquiry.
Further Cabinet Office Guidance
The Cabinet Office also published 18 new policy notes, as follows:
- PPN 001: Targets for direct spend with SMEs and voluntary, community and social enterprises
- PPN 002: Taking account of social value in the award of central government contracts
- PPN 003: The Public Services (Social Value) Act 2012
- PPN 004: Open Book Contract Management
- PPN 005: Reserving below threshold procurements
- PPN 006: Taking account of Carbon Reduction Plans in the procurement of major government contracts
- PPN 007: Contracts with Russia and Belarus
- PPN 008: Armed Forces Covenant
- PPN 009: Tackling modern slavery in government supply chains
- PPN 010: Procuring steel in government contracts
- PPN 011: The Commercial Playbooks
- PPN 012: Security Classifications Policy
- PPN 013: Using standard contracts
- PPN 014: Cyber essentials scheme
- PPN 015: How to take account of a supplier's approach to payment in the procurement of major contracts
- PPN 016: Carbon Reduction Contract Schedule
- PPN 017: Improving transparency of AI use in procurement
- PPN 018: How to take account of a supplier's approach to payment in the procurement of major contracts
The Cabinet Office also published guidance on electronic invoicing and payment, and payments compliance notices, and the Government in Wales continues to publish guidance on the Act.
Taking into account the new Act, the UK Construction Leadership Council published Public Sector Procurement Guidance on potential solutions to common evaluation issues faced by clients in the Built Environment Sector.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
