Update from the NHS European Office

Transcription

1 Update from the NHS European Office What do EU rules on late payments in commercial transactions & procurement remedies mean for me? PCTN Finance Director s Meeting Tracy Cook Senior European Policy Manager 5 March 2010

2 The NHS European Office Nationwide shared NHS resource Funded by the Strategic Health Authorities Forms part of the NHS Confederation Based in Brussels and London Priorities determined by a Steering Group made up of a cross section of the NHS

3 How We Help You Monitor EU developments Keep NHS organisations informed Carry out impact assessments Influence EU proposals Inform NHS bodies of EU funding opportunities

4 Current EU Late Payment Rules...no problem... Statutory interest after 30 days Reimbursement of recovery costs Creditors retain title of goods until fully paid Quick access to legal recourse Prohibition on unfair contract clauses

5 Key Changes Fixed compensation rates for recovery costs (including 1% fee on contracts over 10,000 ) Stronger measures on unfair contract clauses? Public Sector Only 5% late payment fee on the amount due 30 day mandatory payment periods Removal of EU right to claim interest & recovery costs and to negotiate interest rates

6 NHS Views The NHS pays me & about 20 billion of my friends within 30 days or agreed contract terms about 90% of the time... The NHS is committed to good payment practice Mandatory 30 day payment periods are okay Proposed penalty regime is disproportionate Differential treatment between debtors is not entirely justified

7 Specific NHS Proposals This is very sensible... Replace 5% late payment fee with a 2% increase in the statutory interest rate Maintain public sector right to claim interest and recovery fees & to negotiate interest rates Replace 1% recovery fee with a fixed rate sum for contracts over EUR Support mandatory public sector payment periods but extend to private providers delivering public services

8 Next Steps Proposal currently being considered by the European Parliament MEPs and Ministers expected to negotiate an agreement by end of year NHS EU Office to continue liaising w/ EU policy makers, UK Government departments and other stakeholders NHS organisations will be kept informed of developments

9 EU Remedies Directive Covers all contracts subject to EU procurement rules from 20 December 2009 Improves suppliers access to review & makes challenging award decisions easier Introduces new penalties for public authorities that don t follow procurement rules

10 Standstill Period A 10 /15 day standstill gives suppliers reasonable time to assess & challenge award decisions Must inform unsuccessful candidates at an early stage of the procurement process Must give full set of reasons for award decision at the start of the standstill Formal challenge must result in immediate suspension of contract award proceedings

11 Standstill Derogations No prior publication of contract notice in OJEU (i.e. Part B) Only one tenderer and no other candidates concerned Contract is based on a framework agreement or dynamic purchasing system

12 Remedies Ineffectiveness contract awarded w/o OJEU publication where not permissible Breach of procurement rules & pre contractual remedies seriously affecting chances of winning the contract Breach of rules for frameworks and DPS where standstill derogation used Alternative penalties (civil financial penalties and/or contract shortening) in addition to damages when a contract is declared ineffective pre contractual remedies breached but no serious infringement of procurement rules a direct illegal award of contract maintained in the public interest

13 Time Limits For Ineffectiveness 30 days where standstill applied correctly 30 days where a justification for decision not to advertise in OJEU is published with contract award notice Exemption where voluntary transparency notice used & 10 day standstill period observed (for contracts believed not to require OJEU advert) 6 months in all other cases

14 Part B Services Includes health and social care services Only partially covered by procurement regulations Technical Specifications OJEU contract award notification Fully covered by EU Treaty Principles i.e. transparency equal treatment non discrimination

15 OGC Guidance on Part B Services Breach of EU procurement rules on technical specifications for above threshold Part B contract + Award of a contract despite a formal challenge + Supplier deprived a serious chance of winning the contract =...oh dear... ineffectiveness But it s an unlikely scenario...! Another

16 Federal Security vs PSNI Involved provision of security services to PSNI (Part B contract)...ouch.. Awarded w/o standstill & challenged by unsuccessful bidder Court ruled stand still period was required in this case to comply w/ EU Treaty principles Factors considered included value and cross border interest of contract Contract award overturned

17 Protective Measures Be careful using derogations Please save me... & billions of my friends...! Use smart contract clauses Use the voluntary transparency mechanism Follow public procurement rules

18 Thank you! For more information please contact Tracy Cook Senior European Policy Manager NHS European Office Tel tracy.cook@nhsconfed.org