EU procurement rules

EU procurement directives

The United Kingdom is bound to comply with European Union (EU) Directives and with agreements entered into by the EU with other countries. As such, the purpose of EU Procurement Directives is to promote open and transparent competition for European public contracts, to support the free market and help ensure value for money in public purchasing.

For contracts over a threshold value which varies depending on what is being purchased, the directives require that opportunities are advertised in the Official Journal of the European Union (OJEU); they also require that contracts are awarded in accordance with certain standard procedural rules, for example on timescales for the contracting process, advertising, information that potential suppliers should provide, and the basis on which bids may be assessed. Public bodies are also bound by Treaty principles that prohibit discrimination between suppliers and require that procurement procedures are open and transparent.

Public bodies

Public bodies that are ‘Contracting Authorities’ are required to comply with Public Procurement Directives where the stated thresholds are exceeded. The position of Housing Associations has been obscure, as they are not considered to be Public Bodies/ Contracting Authorities. However, the UK Government has accepted the European Commission’s view that Registered Social Landlords (including Housing Associations) are to be regarded as Bodies Governed by Public Law (BGPL) and therefore must comply with the requirements of the EU Public Procurement Directives, where relevant.

Body Governed by Public Law means any body that has all of the following:

• established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character
• having legal personality
• financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law, or subject to management supervision by those bodies, or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law

Obligation to comply

An obligation to comply with the Public Procurement Regulations rests, in the first instance, with the BGPL i.e. the Housing Association, and although a breach of duty is not a criminal offence, proceedings may be assigned to the High Court. The High Court is given powers that can include setting aside a successful contract or awarding damages to unsuccessful contractors.

As a condition of grant-aid from the Northern Ireland Housing Executive (Development Programme Group), Associations must comply with the EU Public Procurement Directives, where applicable; in situations where the threshold is exceeded no work or contracts should be split up with the intention of avoiding the application of the requirements. The payment of grant-aid (HAG) by NIHE (DPG) is on condition that the Association adheres to the Regulations in schemes that exceed the threshold.

The Regulations provide a limited number of specific exclusions including: The purchase of land, including existing buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in or over land.

However, the Regulations will apply to the Procurement Group/ Association’s main procurement activities including Supplies, Services and Works Contracts. Procurement Group/ Association are required to comply, where relevant, with the Public Contracts Regulations 2015.

Disclaimer – this guidance is provided for the information of Registered Housing Associations operating in Northern Ireland. It does not purport to be an authoritative interpretation of the various EU Procurement Directives and requirements, and its sole purpose is to alert Housing Associations, as Bodies Governed by Public Law (BGPL), to the requirements and the need for the Association to ensure compliance. Associations, in operating the requirements, should refer to the relevant legislation and take appropriate legal and professional advice where necessary. Advice may also be sought from NIHE as CoPE.