Ask the Expert

Tony Orr – Care & Repair Manager – Cairn Housing Association

Question by: Tony Orr

Good afternoon Andrew,

I have some questions around VEAT notices,

At Cairn HA, we like other RSLs provide Care & Repair/Handyperson & Telecare services through a Memorandum of agreement with The Highland Council to provide – Adaptations, small repairs & council repair grant assistance to over 65 year old & persons with disabilities within the private sector.

Historically these agreements have been year to year & have been handed to all 5 agents operating the services within the highlands. These funds are allocated from the Scottish Government to local authorities in the term (Private sector housing grant) or PSHG. This funding is split into Capital & Revenue pots, Capital is for awarding grants, revenue is to pay the agents a managing fee. We believe the Highland sum is around the 4 million pound mark 60% Capital, 40% revenue. The Highland Council have been suggesting for years that these services have to go out to procurement but so far it has never come to fruition. There is discussion at present for THC to pass revenue funding to the NHS as part of the Health & Social care integration agreement of 2012, therefore the NHS have stated that these services will certainly have to be procured. After our joint Highland Agents meeting today a group member enlightened us into the VEAT notice & that this may be applicable to this nature of service.

I was wondering if you could review the above detail & provide me with any comments please.

Regards

Tony.

 


Tony,

Firstly, I need to be sure that you understand that I am a practitioner and not a legal expert by profession.  Moreover, the procurement situation in Scotland is subject to the Public Contracts (Scotland) Regulations 2015 and there may be some small differences that (as a southerner) I am not aware of.  So, my comments are my thoughts based upon my experience and no more than that.  Nevertheless, VEAT notices are a legitimate way for a procurement authority to let a contract without competition if some basic rules apply.

Firstly, they must have a (justifiable) belief that the company they want to contract with is the only company suitable to supply what is needed.  If that is the case, then they must advertise their intention to contract in the OJEU as a voluntary ex ante transparency notice (VEAT Notice).  Then they must wait 10 days and if no one objects, they can sign the contract.  If an objection comes through from someone who claims that they too can provide what is needed, the procurement team should then begin a “proper” procurement competition.

I they go through the VEAT process, sign a contract and are subsequently challenged, they are protected against “ineffectiveness” judgements from the court.  However, if they are using the VEAT to subvert the procurement legislation, they will be open to the full range of penalties available.  Despite this, anecdotal evidence is that some procurement teams just hope that “no one will notice” and take the risk!

If what you provide is sufficiently unique, then a conversation with the procurement team about VEAT would be useful.  However, from your description, it seems to be that this would be a risky strategy for everyone involved and my advice would be to press for a more usual procurement route.

On the other hand, you mention that some big procurements are being let without using PCR (Scotland) 2015 procedures.  With the levels of spend you are indicating, this may be beyond the trigger thresholds in the legislation (http://www.gov.scot/Topics/Government/Procurement/policy/10613).  The procurement teams have a legal responsibility to achieve best value from a competitive procurement.  I think an email to scottishprocurement@gov.scot would be sensible and see if they can get the situation clarified about if PCR (Scotland) 2015 applies.  Even if the procurement can be handled as a “Light Touch” procurement, which allows great flexibility in the procurement rules, the fundamental procurement rules of transparancy, proportionality, equal treatment and non-discrimination must be adhered to (the NHS uses lots of Light Touch procurements!).  By the fundamental rules, you should always be given a fair chance to compete.

In a nutshell, I don’t think VEAT will be useful for you.  However, no procurement team should ever seek to circumvent the basic principles of Public Sector procurement.  If you think this is happening, send an email to the most senior person in the department or the Scottish government and use the terms “transparency”, “equal treatment”, etc. as appropriate in your email.  Something will result!

Please call me on 01227 860375 if you would like to chat further.

Andy Haigh