London Councils Procurement and the law – what you need to know David Mosey and Rhianna Wilsher Projects and Construction department Trowers & Hamlins LLP 1 November 2010

Employment and skills CITB – ConstructionSkills Client-based Approach to Employment and Skills Addressing skills deficit in construction industry Clients setting and enforcing their own requirements

Client-based approach Employment and Skills Strategy focussing on 12 key areas over market tested benchmarks Employment and Skills Plan (ESP) Method Statement Contractual commitment Monitoring and support Legal guidance – compliance Template clauses and documents (PPC2000, JCT, NEC3, Framework Agreement) Practical advice

Existing workforce 8.Health & Safety training 9.Vocational Qualifications 10.CSCS cards Employment & Skills Areas New Entrants 1. Site visits 2. School workshops 3. Research project 4. Work experience years 5. Work experience Apprentices - existing 7. Apprentices - project initiated Skills Culture 11.Short courses 12.Progression into employment

Employment and Skills Plan

EU Procurement Public Contracts Regulations 2006 Contracting Authorities Thresholds Principles - proportionality, non-discrimination and transparency Incorrect tender procedures may result in challenge from aggrieved contractors New remedies under Remedies Directive

OJEU notification EU wide advertisement Make clear intention to include employment and skills requirements Selection Respond to OJEU Notice with a Pre-Qualification Questionnaire Short list for tendering Request indication as to previous experience

Tender process Invitation to Tender Minimum employment and skills requirements should be set out in bid process Confirm commitment Complete an Employment and Skills Plan Method Statement

Contract development Employment and Skills Plan & Method Statement included in contracts No opportunity to negotiate under Open or Restricted EU procedures Two-stage procedure adds flexibility Competitive dialogue enables flexibility

Monitoring Project Manager reviews against Employment and Skills Plan and Method Statement Key performance indicators Monthly reporting requirements Post-project review

Local agenda Political pressure to increase local employment opportunities Public Contracts Regulations 2006 (Regulation 39) - social considerations OCG Promoting skills through public procurement Contract conditions must not discriminate directly or indirectly against national or non-national tenderers

Local government procurement priorities Value for money – need for savings (will arms length lowest price tendering also deliver high quality goods and services or are other processes/closer analysis going to produce better results?) Economic sustainability – maximum opportunities for local businesses and employment/training of local residents (needs close working relationship with contractors/ service providers)

Innovation and partnership Need to think about different ways of providing and buying goods/services Necessary to improve value for money while not reducing quality Need to work within EU procurement, but to look for techniques/exemptions/post- award processes that deliver results Need to work with rather than against contractors/service providers/suppliers

Small Lots £64,826 for services and supply contracts or £810,580 for works contracts Less than 20% of aggregated value of all contracts for the relevant services/ supplies/works An opportunity to reserve particular services/supplies/works for smaller businesses (i.e. local opportunities)

Limits on small Lots exemption Cannot lower overall EU threshold by taking out small Lots Aggregation rules will apply when assessing total of goods/services/works identified as small Lots

Worked examples Framework - £40m of work let to four contractors each undertaking £10m of work over four years Small Lots could comprise total of £8m of work reserved to SME contractors Maximum of £2m worth of small Lots contracts on site at any one time to fall within 20% rule Also, no one small Lots contract exceeding £810,580 in total

Bundling/debundling of services contracts Consider, for example, estates services comprising different activities such as graffiti removal/cleaning of common parts/bulk rubbish removal/grounds maintenance Possible identification of one service easily separated from the others and let as a small Lot Provided it does not comprise more than 20% of overall requirement for estate services

Practical assistance to SMEs Procurement procedures need to be simple and not unduly onerous for small companies Advertisement in local press/internet sites where SMEs will have access Review level of administration in terms of questions raised/information requested at prequalification and through invitations to tender Meet the client events and other means of easier access

Supply chain re-engineering Combination of savings with added value ideas after completion of EU processes Jobs, apprenticeships and other training opportunities can be achieved through this system Depends on conditional two stage appointment for: Single Project Framework Agreement Long-Term Contract

Supply chain re-engineering Worked example of Hackney Homes Appointment of five Decent Homes contractors, post- selection review of supply chains and conclusion of joint second tier agreements with suppliers/subcontractors Combination of savings with training and employment activities Proposed as National Skills Academy for Construction project

Thank you David Mosey and Rhianna Wilsher