Are you a contracting authority? – Coventry University says it is whilst Cambridge University claims it is not. What is going on? — The Queen v H.M. Treasury, ex parte The University of Cambridge.

I received an interesting question last week concerning UK Universities and why some say they are not contracting authorities and therefore not subject to PCR15 / public procurement law. It is all down to their income streams. If they are financed for the most part (more than 50%) by public funds, then they fall within public procurement law but if not, then they can step outside the public procurement law regime. For the details see The Queen v H.M. Treasury, ex parte The University of Cambridge.

There are benefits to being a Contracting Authority, including clear and consistent procurement rules and a robust process to follow, with plenty of case history to back it up. It also helps to demonstrate value for money. Significantly, falling within the Public Procurement regime allows you to use public sector frameworks, which are only open to those classed as a ‘contracting authority’.

The main reason institutions like to be outside the regulations is the freedom to follow your own procurement procedure and award contracts as you see fit. However this comes with risk. The law is not clear, and one or more supplier(s) could challenge for failure to award contracts in accordance with the regulations. This could result in the contract(s) being cancelled with damages, fines and the associated bad publicity. The related risk is that the assessment on funding should be made every financial year, and so can change from year to year. So one year you could be a Contracting Authority and then fall outside the regulations the next year.

This all makes for a complex and ever shifting procurement regime.