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Direct award options for unique services

Question by: Sarah Hinchliffe

Hi Peter,

In a situation where a supplier is the sole provider of a unique service that a public sector buyer wishes to procure, are there any options for a direct purchase without competition? The specific example is a support and maintenance renewal for software already licensed.

Many thanks


Hi Sarah,

Thanks for this interesting question.  There are a number of options which spring immediately to mind.  Which of them, if any, will apply and which is the best for you to use will depend on the precise details of your situation.   If you are the only organisation in the world who can (reasonably) supply, and the procurement team is prepared to make the case for this, they can contract with you directly under the “Negotiated Procedure”.  This will be the case where specific intellectual property or capability is essential and clearly held by a single person or organisation.  Core Software IP is often an example, if that IP ownership has not been shared or diluted by the original purchase contract.  However, I think you should start by considering the following options:

 

  1. Contract Extension
    If there is a contract in place and the additional provision is a clear add-on to that, under the new Public Procurement Regulations there are a number of well-defined situations by which a contract can be easily extended without going out to competition.  This addition can be up to 50% of the original contract value, depending on the circumstances.
  2. VEAT
    Again this will depend on the precise circumstances, but an Authority can publish a Voluntary Ex Ante Transparency (VEAT) notice.  This allows them to proceed to a contract without going through the normal tender process.  If no supplier objects in the 10 day period following them issuing the VEAT notice, they can let the contract directly.
  3. Framework
    If the service is available on any Public Sector framework it may be possible for the Authority to purchase via that mechanism, even if it is operated by a different Authority.  This will depend on the notice originally posted in OJEU and its scope.

Ultimately, the process seeks to give all potential suppliers equal opportunity to supply and by that mechanism, for the Taxpayer to get the best value for money that can be achieved.  If it is clear that a sole supplier contract will do that, then the regulations have mechanisms which will allow the costs of competition to be avoided by everyone and a direct contract awarded without competition.  If there is any doubt about the ability of the marketplace to offer alternative solutions, then the regulations are designed to stimulate awareness in the supplier community of the opportunity and flush out better value approaches.