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Procurement - Light Touch, Framework Agreements, Concession Contracts and Reserved Contracts

LIGHT TOUCH REGIME

What exactly is the Light Touch Regime?

The Light Touch Regime is designed for services with limited cross-border interest primarily with a social economic interest. It has been implemented to assist a limited class of services balance the fully regulated approach whilst ensuring transparency.

Following the implementation of the EU Directive, the Procurement Regulations 2015 no longer classify Schedule 3 service as Part A or Part B.  This is now known as the Light Touch Regime.

Light Touch Regime Services

Examples of Light Touch Services are:

Administrative social, educational, healthcare and cultural services
Catering
Training or Educational Courses
Seminars
Hotels and Restaurant Services (including school meals)
Benefit Services
Religious Services
Legal Services (exclusions apply)
Postal Services
Blacksmith Services

Below the Threshold

Should a contracting authority procure a light touch contract worth just under the threshold, it is recommended that the contracting authority runs a competitive process akin to the restricted procedure of the above threshold even though this is not required by the Procurement Regulations 2015. This will allow the contracting authority to achieve the best deal whilst entering into a contract that meets its needs. 

FRAMEWORK AGREEMENTS

Framework Agreements are overarching arrangements set up by Contracting Authorities that allow them to enter into their own contracts with suppliers.

They are popular because they are a simple negotiation process when setting up the Framework and then contracts can simply be “called-off” as and when needed without a protracted procurement process.

A Framework Agreement is defined in Regulation 33 (2) as

“an agreement between one or more Contracting Authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.”

The body setting up the framework will have run a compliant process for whichever services it is offering. The contracting authority will be required to follow the rules they have in place.

The main framework bodies are CCS and ESPO.

All frameworks vary but it is likely that a contracting authority will have to register with a particular body and enter into an agreement confirming compliance with their existing rules.

Advantages of using a Framework Agreement are it:

  • creates a streamlined and flexible process for procuring goods, works and services. 
  • provides the contracting authority with a facility for procurement without creating any obligations on a purchase. 
  • permits Contracting Authorities to undertake a single procurement exercise for the supply of a product or group of products.
  • produces a saving in the time, cost and resources that would be spent by the parties to the arrangement if multiple discrete competitive tendering exercises were conducted.

A disadvantage of a Framework Agreement is not being able to benefit from an economic reduction that a traditional contract would bring.

CONCESSION CONTRACTS

Concession Contracts are contracts that allow a public sector body (Contracting Authority) to outsource works or services to a contractor. The contractor will recover the monies as consideration either instead of remuneration from the Contracting Authority or in addition to it.

The Concession Contracts Regulations 2016 (Concession Regulations) apply to public works and services which has a procurement value above the appropriate threshold.  The value of the concession is an estimate of the total turnover of the concession over the duration of the contract.  

In order to qualify as a Concession Contract, the contractor must bear the risk of an uncertain market and will have no guarantee for investment. There is also an assumption that the contractor has the control instead of the Contracting Authority.

A Concession Contract should not last more than 5 years.

Examples of Concession Contracts include:

  • Catering establishments in publicly owned sports and leisure facilities;
  • provision of car parking facilities and services;
  • road and rail transport;
  • port and airport services;
  • motorway maintenance and management,
  • waste management;
  • energy and heating services

Some contracts can never be a Concession Contract and will therefore not be subject to the Concession Regulations.

Examples of Excluded Concessions are:

  • Licences and authorisations
  • Grants and Subventions
  • Public domain and land lease contracts
  • Rights of Way

As with all above threshold criteria, there is a requirement to advertise Concession Contracts in the OJEU if the value of the procurement of contract is above the appropriate threshold – whether this be Light Touch Regime or all other services.
 

RESERVED CONTRACTS

The Reserved Contract rules apply to certain qualifying organisations.

An organisation is a qualifying organisation if it meets the following criteria under Regulation 77

  • its objective is the pursuit of a public service mission linked to the delivery of services referred to in paragraph (2);
  • profits are reinvested with a view to achieving the organisation’s objective, and any distribution of profits is based on participatory considerations;
  • the structures of management or ownership of the organisation are (or will be, if and when it performs the contract)
    o   based on employee ownership or participatory principles, or
    o   require the active participation of employees, users or stakeholders; and
  • the organisation has not been awarded, pursuant to this regulation, a contract for the services concerned by the contracting authority concerned within the past 3 years.

Examples of reserved services are as follows:

  • Health and Social Work Services 
  • Administrative Educational Services 
  • Administrative Healthcare and Housing Services 
  • School Services including Higher Education, E-Learning, Adult Education and Training

(These are listed by way of their CPV codes in Regulation 77(2)).

The maximum duration of contract which can be awarded is 3 years.

The procedural rules that apply to contracts covered by the Light Touch Regime will also apply to reserved contracts.

As with all above threshold criteria, there is a requirement to advertise Reserved Contracts in the OJEU if the value of the contract is above the appropriate threshold – whether this be Light Touch Regime or all other services.

This does not apply to health care services contracts let by NHS England

What Does It Mean To You?
Exclusions
Obligations If The Rules Apply - The Process
Procedure


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