University Tendering

So when David Willets, Minister of State for Universities and Science, took the stand, his news really was surprising – the majority of Universities in the UK will no longer be bound by stringent EU tender rules.

How has this news come about? Quite simply, new funding models for universities means they do not meet the criteria for tendering according to EU rules in future. Whilst currently Universities in the UK receive approximately 60% of their funding direct form Central Government, strict changes in this amount, down to 40%, mean they will soon fall under the threshold. Current rules state that bodies that receive 50% or more of their funding from public sources are bound by the EU procurement rules which regulate how the public sector purchases goods and services. Bodies that receive under 50% of their funding from public sources have no such obligations.

While this appears to be great news on the surface, some parties have expressed concern that it might not be the case if student loans are classed as state funding. As this would still put most universities above that 50% threshold, the EU tender rules would still apply. This aspect still requires clarification but it would be hard to justify that this was the case. Willets also only referred to teaching funding – University funding sources vary considerably, so a blanket exclusion cannot be confirmed until further investigation has been carried out. Perhaps this is why he declared it the majority, rather than all.

The good news for UK universities is that their tenders can now be geared towards gaining value for money and utilising the local economy where possible – a feat not always possible when bound by EU procurement rules. In short, tenders would come to fruition faster, there would be better bargaining power, purchasing consortiums and partnerships between Universities can negotiate better value, regional and local suppliers could be preferred and best of all, bureaucracy and tendering costs would be reduced.

And while it is good news for Universities, it is even better for those smaller companies in the UK wishing to tender to Universities. Complex EU procurement rules prohibit many smaller companies from tendering because they make the process so lengthy, expensive and complicated for SME’s. Being able to negotiate directly with Universities through a simplified, non-EU bound process is bound to encourage more active tendering from smaller, better value companies.