UK Government (NHSX) modified existing contracts to buy additional data services to react to COVID-19 -- 'The greater includes the lesser' when it comes to extreme urgency procurement?

COVID-19 related procurement is the gift that keeps on giving (at least for procurement professionals and aficionados). Dr Pedro Telles has now found another emerging procurement controversy concerning the modification of pre-existing public contracts to award ‘additional services’ to mine and analyse data to inform the UK Government’s response to the pandemic—as reported by the Guardian (12 Apr 2020) and, in more detail from a procurement perspective, by the Byline Times (22 Apr 2020) . I would expect Pedro to blog about it soon, so keep an eye on telles.eu.

In short—and setting aside the controversy that surrounds the links of the awardees with political figures in the UK and the US, which is nonetheless also rather worrying—the situation is that, in the context of boosting the UK Government’s access to data science analysis as an input to its broader decision-making on pandemic response, NHSX modified a pre-existing contract with Faculty, ‘which had a pre-existing contract with other companies to help build a £250 million artificial intelligence lab for the NHSX.’

This is another procurement exercise where there is very limited public information, so my comments are based on the Byline story taken at face value. Whether entirely accurate or not, I think the story raises an important set of questions on the limits of the extreme urgency exemption from procurement rules and its interaction with the regulation of existing contracts.

The questions that immediately spring to mind are: why would NHSX modify an existing contract, and what are the implications of the contractual expansion? Given the extreme urgency in gaining better insights on the evolution of the COVID-19 pandemic, which seems to me beyond doubt, would it not have been possible (as well as neater and easier to oversee and manage ex post) to directly award a new contract? Are there any particular implications of the choice to modify rather than award a separate contract?

Given the limited public information, all I can do at this stage is speculate. However, I think that some of the unanswered questions below should be added to the already lengthy list that should form the core of a post-crisis public inquiry into COVID-19 related procurement.

Rules on modification and extreme urgency

The modification of the NHSX contract would have been justified on the basis of reg. 72 of the Public Contracts Regulations 2015, which transposes Art. 72 of Directive 2014/24/EU. In particular, the Byline piece refers to reg.72(1)(b) and (c) PCR2015, both of which allow for a contractual modification of up to 50% of the value of the original contract. Both rules simply transpose the equivalent rules of Art 72 Dir 2014/24/EU and need to be interpreted in the same manner.

Awarding additional services in the way that NHSX seems to have done it boggles the mind, mainly because the award of the additional services to mine and analyse COVID-19 related data is unlikely to be covered by either of the two rules—which need to be interpreted restrictively [for details, see A Sanchez-Graells, Public Procurement and the EU Competition Rules (2nd ed, Hart 2015) 429 ff].

Reg. 72(1)(b) PCR2015 allows for a contract to be extended to include additional services that ‘have become necessary and were not included in the initial procurement, where a change of contractor—(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement, and (ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority’.

To put it simply, reg. 72(1)(b) PCR2015 contains a rule concerning contract modifications for ‘more of the same’ services under the relevant contract. This is also the clear indication based on recital (108) of Directive 2014/24/EU, which states that: ‘Contracting authorities may be faced with situations where additional works, supplies or services become necessary; in such cases a modification of the initial contract without a new procurement procedure may be justified, in particular where the additional deliveries are intended either as a partial replacements or as the extension of existing services, supplies or installations where a change of supplier would oblige the contracting authority to acquire material, works or services having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance.’

Reg. 72(1)(c) PCR2015 allows for a non-competed contractual modification to add services to an existing contract where ‘(i) the need for modification has been brought about by circumstances which a diligent contracting authority could not have foreseen; [and] (ii) the modification does not alter the overall nature of the contract’.

Reg. 72(1)(c) PCR2015 contains a rule that gets close to the general possibility to award contracts without competition (under reg.32(2)(c) PCR2015). However, this possibility is subjected to the important constraint that it cannot be used to procure something different from the object of the original contract. This is also rather clear in recital (109) of Directive 2014/24/EU: ‘Contracting authorities can be faced with external circumstances that they could not foresee when they awarded the contract, in particular when the performance of the contract covers a long period. In this case, a certain degree of flexibility is needed to adapt the contract to those circumstances without a new procurement procedure. The notion of unforeseeable circumstances refers to circumstances that could not have been predicted despite reasonably diligent preparation of the initial award by the contracting authority, taking into account its available means, the nature and characteristics of the specific project, good practice in the field in question and the need to ensure an appropriate relationship between the resources spent in preparing the award and its foreseeable value. However, this cannot apply in cases where a modification results in an alteration of the nature of the overall procurement, for instance by replacing the works, supplies or services to be procured by something different or by fundamentally changing the type of procurement since, in such a situation, a hypothetical influence on the outcome may be assumed’ (emphasis added).

We are thus in a situation where the legality of the contractual modification will crucially depend on the object of the initial contract. However, it seems really difficult to see how what NHSX describes as a bespoke data store and dashboard to monitor the evolution of the COVID-19 pandemic (see eg this blog) can fit within the remit or previous contracts, not least because it is meant to ‘self-destroy’ after the pandemic: ‘When the pandemic abates and the outbreak is contained, we will close the Covid-19 datastore. The Data Processing agreements put in place with the organisations listed above include the steps which need to be taken to cease processing and to either destroy or return data to NHS England and NHS Improvement once the public health emergency situation has ended‘.

It is quite difficult to see how the services provided in the creation of the datastore and the dashboard can be additional (in the sense of interoperable or directly complementary) to what was already contracted (see eg a rather detailed description here, where there is no reference to population-wide dashboards), when the COVID-19 specific solutions will be completely abandoned and thus, arguably not support the functioning of the NHS going forward. It is also quite difficult to see how the services provided are not substantially different from what was covered in the original contracts.

Of course, it could be possible to find some compatibility if the original contracts were not for specific solutions, but rather for activities—but, even then, this seems to be a rather distorted use of the rules on contract modification.

Assuming modification was illegal, should we care?

Of course, the discussion above can seem rather academic. If the UK Government (including NHSX) was allowed to enter into direct awards on the basis of the extreme urgency procurement exemption (as I have argued myself, eg here), what difference would it make if the modifications were illegal?

I think there are a few relevant differences. The first one concerns the need to ensure that the distortions to the normal functioning of the procurement rules that ensue from their deactivation in cases of extreme urgency are contained and, mainly, result in clear and traceable creations of new contractual relationships that allow for ex post control and oversight. The second, more practical one, is that the remedies for breach of the relevant rules are different.

While a breach of reg.32(2)(c) PCR2015 in the context of the pandemic can leave disappointed tenderers and the general public without much of a remedy, other than the possible (but in my view, rather unlikely) payment of damages, a breach of reg.72(1)(b) and/or (c) PCR2015 can have more significant and lasting effects, as the remedies in that case include the potential termination of the original contracts (see reg.73 PCR2015).

Indeed, reg.73(1)(a) establishes that ‘Contracting authorities shall ensure that every public contract which they award contains provisions enabling the contracting authority to terminate the contract where—the contract has been subject to a substantial modification which would have required a new procurement procedure in accordance with regulation 72’.

Now, this opens another potentially tricky statutory interpretation issue, which concerns whether the implicit direct award of the contract for the additional services would have required a new procurement procedure under reg. 72, given that it could have been exempted under reg.32. This creates two possibilities (or perhaps there are some additional ones we could find with more time to think about it).

First, a functional interpretation along the lines of ‘the greater includes the lesser’, so that we could waive the potential termination of the contract even in case of breach of reg.72, given that the award of the implicit contract would not have in casu required a new procurement procedure.

Second, a more formalistic interpretation, under which the cause for termination could not be waived because reg.73 is meant as a safeguard against abuses of reg.72 and, thus, is unavoidably triggered the moment the boundaries of reg.72 are exceeded.

Whether one option is preferable to the other can be debated de lege ferenda. For now, de lege data, I would incline towards the second option, as I think this is the one more in line with the case law of the CJEU to date—in particular, Finn Frogne.

So, in my view, I think we should very much care that the rules on contract modification may have been breached, and this creates a risk of termination of the modified NHSX contracts.

Why would they modify rather than award fresh contracts?

The possibility and risk of termination of the pre-existing contracts must have crossed the minds of the lawyers advising NHSX. I think this cannot be a simple oversight or a massive discounting of the risk of termination. There are likely to be some reasons why the modification of a pre-existing contract was used at the same time as the UK Government was directly awarding rather substantial contracts (eg in the context of the Ventilator Challenge).

Those reasons are difficult to disentangle with the available information, but my hunch is that they relate to the intellectual property clauses in the contracts and the likely possibility for NHSX’s contractors to retain very valuable know-how and other IP-protectable outputs of the COVID-19 data store and dashboard project. If this was the implication of the decision to modify pre-existing contracts with potentially favourable terms IP-related terms, then the modification could have been used as a shield against some of the scrutiny that these contracts were known to be likely to attract.

All in all, I think there are very relevant questions on this legal strategy that NHSX needs to answer in the context of a post-crisis public inquiry.

How does the UK Government's ventilator procurement strategy fit with the Commission's Guidance on COVID-19 procurement?

© FT Montage/Ian Bott.

In one more episode of this series—let’s call it #ventilatorgate already, shall we?—Dr Pedro Telles has quickly highlighted the UK Government’s response to an FT story (and twitter thread) that strongly criticised its approach to the procurement of medical ventilators.

One of the interesting parts of the Government’s (entirely predictable) response is the statement that ‘The Government’s strategy to increase ventilator capacity has always focused on three pillars: first, procuring more devices from existing manufacturers overseas; second, scaling up production of existing ventilator suppliers, and third, working with industry to design and manufacture new devices. It has also involved seeking specialist support in other areas including logistics, component and peripheral procurement, and technical expertise.’

Pedro has rightly stressed that ‘This is fascinating insight into the process. … why did the Government follow a pathway that could not (and [h]as not!) provide the NHS immediately with ventilators? The third leg of the stool is not really an appropriate answer here since they could never be approved quickly enough before going into production.’ He also added that ‘It is also a crucial recognition by the Government that ventilator designing and validating *new* ventilator designs takes years effectively meaning that there is no way the new designs could be validated and put in service in due time to deal with the current pandemic. There is an obvious consequence to this assumption and that is to clear any doubts that the Dyson contract illegal since it does not solve an immediate need.’

I fully agree. Of the three pillars of the UK Government’s strategy, only the first two are in line with the EU and UK procurement rules and, in particular, the extreme urgency procurement exemption. This is clear in the European Commission’s Guidance on using the public procurement framework in the emergency situation related to the COVID-19 crisis [2020] OJ C108I/1 (see here for comments). There is no doubt that, according to existing CJEU case law, ‘if extreme urgency is invoked, the procurement need has to be satisfied without delay. The exception cannot be invoked for the award of contracts that take longer than they would have taken if a transparent, open or restricted, procedure had been used, including accelerated (open or restricted) procedures‘ (Guidance, part 2.3.2, with reference to the Order of the Court of Justice of 20 June 2013 in Consiglio Nazionale degli Ingegneri, C-352/12, EU:C:2013:416, paragraphs 50-52).

Therefore, if the award of contracts under the ‘Ventilator Challenge’ was justified on grounds of extreme urgency, then those direct awards are illegal inasmuch as they concern new models or prototypes without regulatory approval and that would not be in a position to obtain it imminently (which seems to only be the case of the Penlon ventilators, which only required adaptation). If an alternative legal basis was used, the Government should disclose it without delay, as the illegality of the awards triggers serious risks of legal challenge and, potentially, pay-outs in damages. The need for a post-crisis public inquiry into these awards only keeps growing by the day.

I think this analysis is uncontroversial. However, it may perhaps be useful to also point out that this is not an instance of (EU) procurement law getting on the way of the Government’s bold ambitions or innovative approaches—else, this can further fuel the claims already been made by the UK Government that now more than ever there is a need for the UK to rid itself from the constraints of EU law, as well as the PM’s bonfire of procurement rules. This is not a time to allow procurement rules to be made a scapegoat for yet another attempt by the UK Government to use procurement to seek to boost the domestic industry, much as in the case of #ferrygate.

In fact, it should be stressed that the European Commission’s Guidance endorses similar approaches and unconventional commercial strategies to react to the COVID-19 emergency, just not within the narrow confines of the extreme urgency exemption. The Commission’s Guidance stresses that, within the narrow extreme urgency exception and ‘[t]o satisfy their needs, public buyers may have to look for alternative and possibly innovative solutions, which might already be available on the market or could be capable of being deployed at (very) short notice‘ (part 1). This highlights the requirement of the (near) immediacy in the supply to cover for the extremely urgent need—such as the adaptation of existing models.

This is distinguished from non-immediate alternatives and innovations, such as the development of new (to be tested and authorised) models, in relation to which the Guidance indicates that ‘Public buyers are fully empowered under the EU framework to engage with the market and in matchmaking activities. There are various ways to interact with the market to stimulate the supply and for the medium term needs, the application of urgent procedures could prove a more reliable means of getting better value for money and wider access to available supplies. In addition: ... Public buyers may use innovative digital tools ... to trigger a wide interest among economic actors able to propose alternative solutions. For example, they could launch hackathons for new concepts that enable reusing protective masks after cleaning, for ideas on how to protect medical staff effectively, for ways to detect the virus in the environment, etc’ (part 1, emphasis added).

By the UK Government’s own admission, the Ventilator Challenge was a (sort of) hackathon. Indeed, the Government’s response stresses that ‘[n]o one was under any illusions at the time of launching the Challenge that producing new designs for domestic production would be anything other than a significant and exacting test. Ventilators are highly complex medical devices requiring hundreds of individual components. That was precisely the point of issuing a public Challenge. Alongside new devices, the Challenge has pursued scaling up a number of existing, proven ventilators…’

Therefore, the adequate approach would have been to follow urgent procedures (either open or restricted), which would have required the UK Government to advertise the contractual opportunity (for 15, or 15+10 days, respectively). Given that the Ventilator Challenge was launched on 16 March 2020 and that, at the time of the Government response (19 April 2020), no new ventilators had received regulatory approval, there is no evidence that the same (sadly, so far, unproductive) result could not have been achieved by resorting to urgent (but not extremely urgent) procurement procedures.

However, openly advertising the requirements rather than holding a (by invitation only) conference call with UK manufacturers would probably not have satisfied the Government’s more veiled ambition of using this as an industrial policy opportunity. And this seems to have been an important element of the strategy too. And one that, once again, merits very close scrutiny in a public inquiry.

Drilling down on the statutory interpretation of the extreme urgency procurement exemption in the context of COVID-19

Not that we have nothing else to do, but Dr Pedro Telles and yours truly keep busying ourselves with the analysis of the extreme urgency exemption from the EU and UK public procurement rules—that is, the statutory interpretation of Art 32(2)(c) Directive 2014/24/EU and its equivalent reg. 32(2)(c) Public Contracts Regulations 2015 (PCR2015).

To be precise, our ongoing debate concentrates on the safeguard that ‘the circumstances invoked to justify extreme urgency must not in any event be attributable to the contracting authority’ [see Art 32(2)(c) in fine Dir 2014/24/EU; reg.32(4) PCR2015, emphasis added]. The specific point that keeps us arguing with each other concerns the attribution or, relatedly, the imputability to the contracting authority of (political) decisions that can be seen to have aggravated the extremely urgent need for the supplies (in the specific case, of medical ventilators).

We are agreed on almost everything else, including the illegality of a number of contracts directly awarded (presumably) by Cabinet Office due to the fact that the companies or consortia that received them were (and continue to be) unable to immediately deliver ventilators (notably, due to the need for regulatory approval)—see eg Guardian, 14 Apr 2020.

Our disagreement thus concerns the direct award of extremely urgent contracts to suppliers that could immediately deliver ventilators. While I argue that (if any) these were legal awards because the Cabinet Office was covered by the relevant exemption, Pedro challenges this position and would consider the award of all ventilator contracts illegal due to the extemporaneity of the intervention.

To be fair, the question is rather academic, but I still think it is worth pursuing, as it affects the general interpretation of the rules for extreme urgency as it concerns the impact of the prior behaviour of the contracting authority, as well as the viability or less of my proposed distinction between political and operative decisions, which Pedro rejects. So here are some additional thoughts, trying to drill down on this issue.

Who has which burden of proof?

Our positions are diametrically distant. Even from the first premises, it would seem, as Pedro says in his latest post that “Regulation 32(2)c is exceptional in nature … and as such the grounds for use need to be interpreted narrowly. This means that in case of uncertainty/unpredictability as seen in this particular situation, the benefit of the doubt does not support the use of this provision but actually forbids it.” I do not really understand what this is meant to stress. One of the requirements is for there to be ‘events unforeseeable by the contracting authority’ and it is precisely the uncertainty surrounding such unforeseeability that opens up the possibility of resorting to direct awards if the rest of the conditions are met. On that, we seem to continue to disagree too.

As Pedro puts it, in his view, “Regulation 32(2)c creates a positive obligation for the contracting authority to prove that the grounds for extreme urgency are met. I think this is crux of the difference between mine and Albert's view. When Albert states we do not know if the counterfactual of a hypothetical procedure launched in February would have been successful that is *precisely* my point. Had it been done and failed, then the Government would be more than entitled to use a negotiated procedure without prior notice. But crucial element here is that it didn’t.”

I reject the way the disagreement is framed there. I do not challenge that it is for the contracting authority to demonstrate that the grounds for extreme emergency existed: ie unforeseeability of the events by the contracting authority in question; extreme urgency making compliance with general deadlines impossible; and causal link between the unforeseen events and the extreme urgency (as per the European Commission’s guidance of 1 April 2020, see here).

I also reject that recourse to extreme urgency procurement can be made dependent on the previous failure of an alternative procurement approach, as Pedro suggests. Not least, because those are two different grounds for having recourse to direct awards (or rectius, the negotiated procedure without prior publication), both under EU law [cfr Art 32(2)(a) and (c) Dir 2014/24/EU] and UK law [cfr reg.32(2)(a) and (c) PCR2015].

What I argue is that it is for those wanting to challenge the use of the extreme urgency exemption to positively demonstrate that the situation is attributable to the contracting authority, as the contracting authority cannot be put in the position of proving a negative. Here kicks in my argument that “I do not think a negative approach (not unattributable) is satisfactory at all. I think a more stringent approach needs to be taken, to at least require evidence of a positive contribution to worsening the situation by the contracting authority.”

This is the perspective from which I would assess Pedro’s additional arguments and factual statements about the way the Cabinet Office acted in the lead up to the launch of its extreme urgency procurement of ventilators on 16 March 2020.

January to March 2016: uncertain times

Pedro frames the question as “Was the Government (sorry, Cabinet Office) a reasonably diligent contracting authority in the run up to mid-March when it comes down to availability of ventilators?”. He provides links to a number of reports and concludes that they constitute “sufficient evidence that the [UK] Government knew of the need to secure further ventilators on the run up to March 16th and did not act upon it, effectively losing any semblance of protection that could be afforded as 'a diligent contracting authority'.” The difficulties I have with this approach are as follows.

First, there is no evidence that Cabinet Office was inactive all the time up and until 16 March. At least one of the reports Pedro links indicates that ‘the government started talking to manufacturers of ventilators about procuring extra supplies in February. But it was not until March 16, after it was clear supplies could run out, that Johnson launched an appeal to industry to help ramp up production’ (emphasis added). We have very limited information on the evolving analysis of the likely sufficiency of the contractual arrangements already in place, notably by NHS Supply Chain, which has a rather large framework agreement for medical ventilators in place (see for more details the 2018 contract award notice).

This could put the approach in context, as it would be reasonable for the Government to first have been in touch with the contractors within the NHSSC framework agreement to check their maximum delivery capability, and only once this was assessed as insufficient, to go out to market to try and secure the remainder of the expected needs, now extremely urgent. Without more information, it is difficult to assess what happened, but that could be understood (either within or outwith the framework agreement) as direct contacts and (potentially) negotiations of the sort that are allowed under extreme urgency, despite the fact that the contracts ended up being awarded on 16 March. This would still not justify resorting to direct awards to companies or consortia unable to deliver immediately, as discussed above, but it would go a long way to deactivate any claims of procurement passivity between end of January and early March 2020.

Moreover, second, it may be worth stressing that the existence of some benchmarks could be useful in assessing the timeliness of the intervention. Remarkably, the EU itself took a similar time to react and the EU-level effort to procurement ventilators under the Joint Procurement Agreement (JPA) was launched on 17 March, thus contemporaneously to the UK’s awards—see eg Reuters, 3 Apr 2020. The JPA will still take time to result in the effective supply of ventilators so, as of today, it seems difficult to assess whether one approach will be significantly more successful to the other in the long run.

Third, and perhaps more importantly, the modelling of the likely evolution of the pandemic in the UK was all over the place in the period in question (and only more and better data is allowing for more reliable forecasts as it evolves) and there is ongoing controversy (and opacity) on the Government’s chosen strategy and its expected/foreseeable clinical implications. Pedro somewhat agrees, but indicates that this is ultimately no excuse because “*a* demand for extra ventilators was not unpredictable in late January/early February, even for a reasonably diligent contracting authority”. He further concludes that “the Government was aware of the need prior to March 16th and did not act upon it. In my opinion this leads to the consequence of contributing towards the extreme urgency.”

I would argue that this remains largely a weak claim, not least because it comes back to saying that the circumstances under which the extremely urgent direct awards were made were not (completely) unattributable to the contracting authority—or, in other words, that somehow the contracting authority could have done more or done something earlier. But this begs the question how to assess diligence in that context.

When would a diligent contracting authority with a framework agreement (directly or indirectly) in place have acted to secure additional supplies outside of that mechanism? Why roll back the decision to end of Jan 2020 and not earlier, or later? Also, what would have been the big difference between launching a procurement in early February or mid March? This is all largely speculative and would not make for a solid legal test that could withstand the specifics of a given case, much less become of general application.

tentative conclusion

For the time being and in light of the available information, I do not think there is a sufficient basis to say that the UK Government was barred from relying on the extreme emergency procurement exemption, either due to its tardy reaction to the pandemic from a public health perspective, its eminently political (and in my view wrong and short-sighted) decision not to participate in the JPA for ventilators, or the timing of its decision to directly award contracts for ventilators. None of that can be construed as making the ‘circumstances invoked to justify extreme urgency … attributable to the contracting authority’.

That does not mean that (most of) the ventilator contracts were not illegally awarded for other reasons (ie impossibility to immediately fulfil the contract), or that the procurement emergency has been adequately handled. It simply comes to stress the point that, in order to keep statutory interpretation consistent and resilient to the pressures of a given case, it is necessary to disentangle the different requirements justifying direct awards under the extreme urgency exemption.

However, none of this minimises the need for a proper investigation into the whole approach to the procurement of ventilators, which seems bound to emerge as a new #ferrygate. I, for one, look forward to the post-crisis public inquiry that is being demanded—see eg FT, 16 Apr 2020 (paywall).

Some (anecdotal) updates on the transposition of the 2014 Public Procurement Package

At Procurement Week 2016, we had an interesting session on the transposition of the 2014 public procurement package in some of the Member States. So, beyond the official information publicly available through Eur-lex, and for those of you anxiously following the transposition process (or its absence), I thought that it could be interesting to share some additional (anecdotal) updates on the process in the Member States represented in the panel.

Each panelist was asked to report on whether there had been transposition or what are the plans for it, as well as to choose three issues that can be considered controversial in the transposition. My notes of the discussion (responsibility for errors is solely mine) are as follows:

Czech Republic foresees to transpose by 01/10/2016. Their main three worries seem to be around the use of life cycle costing, the use of quality-only tenders in healthcare and the increasing discretion contracting authorities hold in terms of exclusion.

Denmark transposed and this transposition deviated from the previous copy-out approach, which has significantly changed the nature of procurement regulation in Denmark. It was suggested that a number of rules included in the procurement act are unnecessary and the result of specific lobby demands. Main issues pointed out as problematic included: obligation to disclose evaluation method, explicit obligation to terminate when the award decision is annulled, changes in the identity of participants as well as the possibility of the contracting authority to be obliged to accept certain types of changes, and issues concerning criminal records for the purposes of the ESPD.

Estonia has not yet transposed. The bill is in Parliament and there is hope that the transposition will take force by 1 January 2017. Meanwhile, however, the Estonian Ministry of Finance has issued guidelines with regard to parts of the new directives having a direct effect.*

Finland has not transposed and there is no clear time frame. A draft legislative act was promised by government by the end of June, with a view to have transposition in place by the end of 2016, but this does not seem too realistic.** The delay is remarkable because transposition was on track and a project was submitted to public consultation in good time. However, the process was subsequently derailed due to a change in government.*** [I wonder whether this comes to show the political relevance of procurement in Finland (and in Scandinavian countries more generally)]. Secrecy was mandated on civil servants involved in the transposition, which makes this particularly opaque. Some of the issues that are discussed, though, include the need to create an oversight body (probably to be assigned to the competition authority), issues around the non-public turnover limit for in-house and public-public collaboration and its interaction with domestic competition neutrality rules (which lead to the suggestion that the limit could be set anywhere short of 20%, and possibly in the 0-10% range), the need to review remedies despite lack of action at EU level, and possible gold-plating of SME-friendly measures.

Greece has not transposed. There was a series of public consultations in March for a law that would consist of 5 books and would be implementing the new directive. This law would also reform the public contracts regulations in general and this is where things got complicated and started to go wrong: when reforming the way remedies were sought, the legislator tried to create a special entity that would examine bidders' claims in the second instance (first instance is with the CA; second instance is now with a court). However the Greek Council of State found the creation of this new entity to be against the constitution and made requests for this and other provisions to be amended. This is causing further delay.^^^

Ireland transposed on 5 May 2016, except concessions.Their main issues relate to the light-touch regime, retrospective effect of new rules to contracts tendered after 18 April but before 5 May, and many difficulties concerning the implementation of the ESPD, particularly due to their issues with leaving 'suitability' assessments to the end and how this provides wrong incentives to contracting authorities to be 'lax' about selection and exclusion.

Italy transposed 1 day late, but it is not a full transposition and the implementing regulations are not ready yet. There are significant gold-plating issues, such as the prohibition to tender design and construction together (as per Mario's emails), or the limitation of the authorisation to carry out procurement to only 35 CPBs in the whole of Italy, thus banning the activities of individual contracting authorities except for minor contracts.

In the Netherlands, the transposition act was discussed in the Dutch Senate on 14 June and the subsequent vote will take place on 21 June. This would be the last hurdle for implementation, after which publication in the Staatsblad can follow. Therefore, it seems like the planning of the Ministry of Economic Affairs will be met (1 July). Predominant discussions in the Netherlands have related to: (i) In-house procurement and the question whether additional regulation of the make-or-buy decision is necessary. A proposal (motie) has been floored in the Senate on this subject. This relates to a recent trend of the central government to in-source scanning and cleaning activities; (ii) The question whether Dutch ministries and other organisational parts of the Dutch State are separate contracting authorities for the purpose of the in-house doctrine. This was discussed in parliament and at multiple legal conferences; (iii) In light of the recent decentralisation of many social acts (Jeugdwet, Participatiewet and Wmo) to the municipalities, it has been questioned if the introduced procedure for purchasing social services in relation to article 76(1) Directive 2014/24/EU is an adequate implementation of the Directive.****

Norway has not transposed either, but being an EEA State, it has more time. There has been a project since late 2015 and it is expected to come into force relatively shortly (pending the approval by the Parliament). ***** It interesting to note that all EEA Members had initially indicated 'constitutional requirements' for the transposition of the 2014 public procurement package. In particular, despite the fact that the Joint Committee Decision (JCD) no. 97/2016 was adopted on 29. April 2016 to incorporate Directive 2014/23/EC, Directive 2014/24/EC, and Directive 2014/25/EC into Annex XVI of the EEA Agreement, at the point of adoption all the EEA EFTA States indicated constitutional requirements. The JCD can consequently not enter into force until these requirements have been lifted and all the notifications under Article 103 (1) of the EEA Agreement have been made. The Norwegian parliament has now (16.6.16) approved the incorporation and Norway can therefore lift its constitutional requirements. It is now necessary for Iceland and Liectenstein to follow suit.^^

Poland has not transposed. A legislative proposal was published on 13 May with the intention of transposing in June, and this seems to be likely. Indeed, it seems that the classic and utilities directives could be transposed in July and the concessions directive in September.****** Polish procurement law has been reformed 50 times over 10 years, so there is experience (and complaints) about such continuous process of reform. Their main difficulties are in the transposition of rules in-house provision (particularly due to effects on waste management sector), the application of rules to below thresholds contracts related to investment in revitalization zones, the use of the ESPD, as well as rules on labour law requirements.

Portugal has not transposed either, although the Azores (being a devolved administration with competence for the transposition of procurement rules), have. The only rule that Portugal transposed in its entirety in August 2015 was art 22 dir 2014/24, which required an act with over 90 provisions. *******

Romania has completed the transposition.********

Spain has not transposed and transposition any time soon is highly unlikely due to the coming general elections on 26 June, which are not likely to result in the quick formation of a new government. Some regions have started to produce reports on direct effect of some provisions of Dir 2014/24 and, controversially, the region of Catalonia adopted a full transposition act on 31 May despite lacking the powers to do so. This raises complex internal constitutional issues and legal certainty is not necessarily fostered by the adoption of unconstitutional rules. This may have to do with the prospect of future liability for fines imposed by the CJEU for late transposition.

Sweden postponed transposition to 1 January 2017 but even that is unlikely. There is significant discussion on direct effect in the meantime, including for contracts below thresholds and reservable contracts for social and special services. The general discussion surrounding transposition is focusing on issues such as the possibility to use procurement to impose labour standards set in collective agreements, as well as innovation related topics.

UK (Eng & Wales) transposed in 2015 and amended rules in 2016. There is discussion in whether any benefits have been obtained from such early transposition. There is indication of increased use of competitive procedures with negotiations and dynamic purchasing systems. There is also an ongoing discussion concerning conflicts between the text of the regulations and guidance published by the Crown Commercial Services, which creates uncertainty at practical level.

I hope this is interesting/helpful/thought-provoking. Please feel free to use the comments function to provide additional updates on other Member States, or to expand the qualitative discussion on any of those mentioned above.

* Added thanks to Dr Mari Ann Simovart.

^^^ I am grateful to Panos Somalis for this update on Greece.

** Thanks to Dr Kirsi-Maria Halonen for the precision that draft legislation can still be expected this June.

*** Thanks also to Timo Rantanen for his additional insights.

**** Thanks to W. A. (Willem) Janssen for information on the Netherlands.

***** Thanks to Ignacio Herrera Anchustegui for information on Norway and some comments on Portugal.

^^ Thanks to Werner Miguel Kuhn for this detailed update on the EEA process.

****** Thanks to Dr Paweł Nowicki for further details on Poland.

******* Thanks to Dr Pedro Telles for information on Portugal.

******** Thanks to Ioan Baciu for the update on the Romanian transposition.