Subject-matter and scope under Reg.3 Public Contracts Regulations 2015

Reg. 3 Public Contracts Regulations 2015 (PCR2015) defines their subject-matter and scope and aims at clarifying the limits on their applicability as both the content and the value of the contract are concerned. In my view, however (and Pedro fundamentally agrees in his comment from earlier today), reg.3 PCR2015 has very limited content of its own and, despite trying to provide some clarity as to the scope of application of its rules (an issue that will keep us entertained for a while), actually muddies some issues. 

On the one hand, reg.3(1)(a) PCR2015 simply describes the function of this statutory instrument by indicating that its operative part "establishes rules on the procedures for procurement by contracting authorities with respect to public contracts and design contests". This seems to be superficial and unnecessary, as the purpose of the instrument is abundantly clear in the Explanatory Memorandum. Moreover, from a strictly conceptual point of view, this description is partly tautological, as design contests are procedures in themselves [see definition in reg.2(1) PCR2015]. Hence, nothing would have been lost if this clause had been avoided (as, indeed, Directive 2014/24 does not include any similar article).

On the other hand, reg.3(1)(b) PCR2015 stresses that the contracts covered by its rules are those of "a value estimated to be not less than the relevant threshold mentioned in regulation 5" (which will be discussed in due course, and simply aims at freeing below-threshold contracts from compliance with Part 2 PCR2015), provided that they "are not excluded from the scope of this Part by any other provision in this Section"--or, in other words, provided they are not mixed contracts that must be tendered under alternative rules in view of the criteria set out in reg.4 PCR2015 (to be discussed tomorrow). Hence, reg.3(1)(b) PCR2015 is also an unnecessary repetition of what is established in regs.4 and 5.

Finally, and maybe of more interest, reg.3(2) PCR2015 stresses that the rules in the PCR2015 are "subject to Article 346 of TFEU", which allows Member States to derogate from Internal Market rules when their essential security interests are at stake [see Commission's interpretative communication on the application of Article [346] of the Treaty in the field of defence procurement (COM(2006) 779 final) and, for discussion, A Georgopoulos, 'The Commission's Interpretative Communication on the application of Article 296 EC in the field of defence procurement' (2007) 3 Public Procurement Law Review NA43-52]. 

In my view, however, this is also an unnecessary clause. To begin with, because the need to take into consideration the special requirements derived from the application of Art 346 TFEU in the field of defence procurement resulted in Directive 2009/81 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security [see the references provided by Pedro in his blog, as well as B Heuninckx, 'The EU Defence and Security Procurement Directive: trick or treat?' (2011) 1 Public Procurement Law Review 9-28, and M Trybus, 'The tailor-made EU Defence and Security Procurement Directive: limitation, flexibility, descriptiveness, and substitution' (2013) 38(1) European Law Review 3-29]; and that Directive has been implemented through the Defence and Security Public Contracts Regulations 2011 (SI 2011/1848, as amended). And, secondly, because the interaction between the rules in the PCR2015 and defence and security-related issues is also expressly detailed in reg.15 on Defence and security procurement. Consequently, this final clause of reg.3 PCR2015 is also unnecessary.

Generally, then, reg.3 PCR2015 is superfluous and its inclusion despite the nonexistence of an equivalent provision in Dir 2014/24 seems to indicate both an intention to overemphasize the 'limited' scope of application of the PCR2015 (by creating unnecessary repetition of the rules that restrict their scope) and a certain fear that coordination with other mandatory instruments (either of an EU or domestic origin) may be faulty. 

On this last point, the worry of the UK legislator must be shared, as the system that results from the existing substantive procurement directives creates a fiendish web of cross-referrals that generates significant uncertainty when mixed contracts are concerned. Hence, the need for specific rules at EU level to simplify this entangled web couldn't be overemphasized. In the meantime, though, the options of domestic legislators are limited and the strategy followed in the PCR2015 of 'better be safe than sorry' is understandable, although it results in unnecessary repetition and, in certain points, tautology.