Written question asked by Tim Farron (Liberal Democrat) on Tuesday, 25 April 2006, in the House of Commons. It was due for an answer on Tuesday, 2 May 2006. It was answered by Alun Michael (Labour) on Wednesday, 3 May 2006 on behalf of the Department of Trade and Industry.

Public Procurement Procedures

Question: To ask the Secretary of State for Trade and Industry pursuant to his Answer of 1 February 2006, Official Report, columns 547–8W, on European public procurement law, what changes the two new European Commission public procurement directives made to public procurement procedures in the UK; and what estimate his Department has made of the financial effects on small and medium-sized enterprises of these changes.

Answer: [holding answer 2 May 2006]: The new procurement directives, simplify, clarify and modernise public procurement procedures. These were implemented in the United Kingdom on 31 January 2006. There are new provisions on framework agreements, competitive dialogue for complex procurements, central purchasing bodies and electronic procurement methods such as e-auctions and dynamic purchasing systems.The directives allow contracts to be reserved for supported factories and businesses, and provide greater clarity on the extent to which social and environmental issues can be incorporated into procurements. There is also a requirement for the mandatory exclusion of companies that have been convicted of offences related to fraud and corruption. The rules applying to purchases by utilities now incorporate an exclusion mechanism where a sector is subject to normal competition.Concerning the effects on small and medium-sized enterprises (SMEs), the new directives, and the regulations that implement them, apply rules directly to purchasers rather than to suppliers. There are, therefore, no compliance costs to business from these new rules. The new procurement methods that the rules provide for, including electronic systems, together with the simpler and clearer rules generally, reduce the burdens of the procurement process and should encourage suppliers, including SMEs, to participate in public procurement opportunities either directly or as sub contractor.

Secondary information