Location location location: Can you specify one in a procurement? - DAC Beachcroft

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Location location location: Can you specify one in a procurement?

Published On: 30 June 2015

A recent Advocate General's opinion has cast doubt on a body's ability to require delivery in a certain location.

The AG's preliminary review considered the Basque Government Health Department's two tenders for public health surgical services to be provided in private hospitals to relieve pressure on public waiting lists. The tender documents included a requirement for the services to be carried out in the city of Bilbao. A private hospital in a neighbouring town brought an action arguing that this requirement was discriminatory as patients could access the hospital in the neighbouring town easily by public transport and within 14 minutes by car. 

The AG noted that whilst public health requirements could override the requirement of free competition in the field of health services (which are part of the Light Touch Regime under the Public Contracts Regulations 2015), in this case this requirement went beyond what was objectively necessary for that purpose. Whereas a requirement to establish an administrative office in a set location is relatively easily satisfied, establishing a health centre where surgical procedures could be carried out was a big undertaking. The journey to other nearby hospitals outside of the city limits would not be difficult for patients or surgeons.

The AG noted that proximity to Bilbao was an important consideration, but that it could have been satisfied by less discriminatory requirements, for example travel time or distance from the centre of Bilbao, or ease of access by public transport systems.

Where does this leave location requirements in procurement?

The general principle still stands - authorities cannot require bidders to be based in a specific place. The risk is that if the ECJ follows the AG's opinion then the approach taken by many bodies requiring provision in a specific location may be an issue.

Focus on Health

This is one to watch for health service commissioners. They may in future need to consider accessibility for service users and ensure they can evidence any requirements in specifications for specific locational delivery. Evidence could include pre-procurement market engagement and consultation with patients and service users. This could also assist health commissioners in their obligations under the Public Services (Social Value) Act 2012 and the Public Sector Equality Duty under the Equality Act 2010.

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