Principles of procurement under Reg.18 Public Contracts Regulations 2015

One of the relevant changes introduced by Directive 2014/24 is that is has for the first time consolidated the "general principles of procurement" that have emerged from the case law of the CJEU into a specific provision, hence raising the relevance of compliance with these general principles where contracting authorities exercise their administrative discretion. 

This approach could seem at first sight easier to fit in a civil law context than a common law approach to public procurement. However, it can hardly be doubted that English Administrative Law is based on general principles that are fundamentally aligned with those derived from EU Administrative Law [for discussion, see P Cane, Administrative Law, 5th edn, Clarendon Law Series (Oxford, OUP, 2011) 9-11]. In my view, this approach should not be seen as a legal transplant and much less create any irritation in the context of the transposition of the EU procurement rules.

Art 18(1) Dir 2014/24 indeed sets out that procurement needs to be conducted in accordance with the principles of equality, non-discrimination, transparency, proportionality and competition [for discussion on the implicit existence of this principle under the previous set of EU rules, see A Sanchez Graells, Competition and the Public Buyer Towards a More Competition-Oriented Procurement: The Principle of Competition Embedded in EC Public Procurement Directives (May 15, 2009)].

On its part, Art 18(2) establishes an obligation for Member States to ensure the legality of procurement, particularly as compliance with applicable obligations in the fields of environmental, social and labour law established by international, EU and national law, as well as collective agreements.

Reg.18 of the Public Contracts Regulations 2015 (PCR2015) follows closely the first set of issues regulated in Art 18(1) Dir 2014/24 and also determines that procurement needs to be conducted in accordance with the principles of equality, non-discrimination, transparency, proportionality and competition [reg.18(1) PCR2015]. Particularly in regards with the principle of competition, it is worth noting that reg.18(2) and (3) adopt the same wording as Art 18(1)II Dir 2014/24, which carries the interpretative difficulties created by the EU rule (see my comments here).

It may seem surprising that reg.18 PCR2015 does not include the content of Art 18(2) Dir 2014/24. However, a possible explanation is that the UK government has interpreted that the obligations it imposes are incumbent upon the State itself, which may make them unfit for incorporation into domestic regulations addressed at contracting authorities, because its wording establishes that "Member States shall take appropriate measures to ensure that in the performance of public contracts economic operators comply with ...". 

An alternative to the omission of this provision would have been to draft it as imposing an obligation on the specific contracting authority to take appropriate measures to ensure that in the performance of public contracts economic operators comply with environmental, social and labour law obligations. However, it should not be surprising that a Member State (and the UK at that) would want to avoid making that obligation so specific.

In any case, though, such an omission does not create any gap in the transposition of the EU rules, particularly in view of the fact that reg.56(2) PCR2015 establishes the same duty/possibility than Art 56(2) Dir 2014/24 for contracting authorities to "decide not to award a contract to the tenderer submitting the most economically advantageous tender where they have established that the tender does not comply with applicable obligations in the fields of environmental, social and labour law established by EU law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex X to the Public Contracts Directive as amended from time to time." (which is in itself problematic, as commented in due course).