星空传媒

One of the worst kept secrets in social housing was finally confirmed last Friday: the government officially bowed to Brussels and said housing associations would have to follow European rules on procurement.

The sector was dismayed: registered social landlords now have to advertise contracts in the European Union鈥檚 Official Journal, adding time and money to the process.

In addition, disgruntled bidders can take RSLs to court if they feel proper procedure has not been followed.

However, there are ways to avoid advertising every contract and means to protect yourself from hordes of litigious failed bidders.

There are whole categories of contracts, called part B services contracts, that don鈥檛 have to be advertised in the OJ. Contracts for cultural, educational, legal, recreational, sports, hotel, restaurant, health or social services, or transport by rail or water do not have to be subject to competition.

However, it is probably wise to advertise them to some extent as associations still need to be transparent and non-discriminatory under general European law.

There are also some get-out clauses on development contracts. They hinge on the argument over what is a development agreement and what is a building contract. A development contract is not caught by the new rules, but a building contract would be.

鈥淚f the whole contract is a mix of sale of land with a works element and the predominant purpose is the sale of the land, it would not be considered a works contract,鈥� says Anthony Woolich, head of the EU/competition team at lawyer Lawrence Graham.

There are also ways to turn building deals into land deals. Simon Randall, head of housing and local government services at Lawrence Graham, explains: 鈥淎 builder could start building for you without entering into a contract. When the properties reach a certain value, they transfer the land and contract to you. That creates a land contact which is outside the issue.鈥�

There are ways to avoid advertising every contract and to protect yourself from litigious bidders

Contracts under 拢153,000 for services and 拢3.834m for works are not subject to the rules.

But beware: it is the total value, not the annual value, of multi-year contracts that counts under the rules. RSLs can鈥檛 get around this by breaking a big contract down into smaller ones. 鈥淚f you need to buy a certain number of paperclips in a year you can鈥檛 award two contracts that are both just below the threshold,鈥� says Woolich.

Some procurement clubs, such as Procurement for Housing, already comply with the rules for purchasing supplies.

There are a few instances where RSLs don鈥檛 have to advertise and can just approach contractors 鈥� for example, if you have already advertised and had no suitable responses.

But RSLs must be careful that they advertise widely and treat all bidders equally and fairly, or they could find themselves on the wrong

end of a court case.

n Download Lawrence Graham鈥檚 brief guide to the new rules, A Competition Call for Registered Social Landlords, at www.lawgram.com

n Scottish procurement, page 52