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Alan Nixon's overview of the OJEU process

28th Feb 2014
Alan Nixon's overview of the OJEU process
In this blog, our director Alan Nixon looks at how the introduction of the Official Journal of the European Union (OJEU) procurement rules in 2003 has cost UK industry billions and has led companies to devote tens of thousands of working hours in the attempt to maintain turnover through the economic downturn.

From battleships to paper clips to construction projects – the Official Journal of the European Union (OJEU) procurement rules cover all public procurement opportunities which have a value of more than £4,348,350. The purpose of the rules is to create a level playing field and a single market for businesses across the EU.

The OJEU process, including the pre-qualification questionnaire (PQQ) along with optional interviews, presentations and site visits, may seem to be a very thorough way of choosing the right contractor, but it can also act as a barrier - often leading to delays in clients being able to action investment plans and increasing their costs, taking away from their investment budget.

Some companies, including Novus, have now employed whole teams to deal with the OJEU bidding process and everything it involves. At Novus, a team of staff writes and deals with the OJEU procurement bids. The forms our team completes are ostensibly repetitive but subtly different each time, so each application must be bespoke, which means yet more time is consumed. We estimate that 7,000 manpower hours are spent by our staff annually just filling out PQQs.

This whole process involves costs and we estimate that the construction industry is spending at least £600m on bidding under OJEU annually. Other industries must comply too, so if construction represents 10% of the total value of OJEU opportunities then the overall figure per year spent just on bidding for opportunities would be at least £6 billion.

While the rules currently in place do offer a fair and consistent way of procuring, there are effective improvements which could be made to ensure a more time and cost-effective process.

To save time for contractors, one defined application format could be used for every bid, but the counter argument for this is that it would restrict choice for clients and restrict opportunities for companies.

Launching a single government-run website and portal for all non-OJEU public opportunities to be advertised on and for all OJEU and non-OJEU public opportunities to be submitted through, would save time spent searching for lower-value projects, while repetitive elements could be pre-populated and only one registration would be necessary.

Having all the opportunities in one place would also facilitate the implementation of a single notification system, so contractors receive alerts when any suitable OJEU or non-OJEU public opportunity arises.

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