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Development Agreements And Public Procurement

April 9, 2021

However, there is no doubt that the judgment creates increased uncertainty for local authorities exercising their development powers and that a more cautious approach is likely in the future, given that more transactions are subject to public procurement rules, particularly where an option is highly likely to be exercised. While it is still possible to structure a development agreement so that it is not covered by regulations, local authorities should be cautious about it. In light of this decision, it appears that the safest procedure will be for the authorities to comply with the regulations and implement a regulated offer before entering into a development agreement in the future. Was the development agreement a public contract for works or services? The Court of Appeal`s decision in Faraday provides some guidance on the sensitive question of when a land use agreement should be considered a contract for work governed by public procurement rules. The judgment also guides how a “VEAT” communication must be drafted to allow a contracting authority to use that communication to jeopardize the elimination of inefficiency. But there is still a lot of uncertainty. The Council did not proceed with a public procurement procedure prior to the conclusion of the development agreement. Instead, it issued a “voluntary transparency communiqué” in which it stated that it believes that the agreement does not fit within the scope of the public procurement regime, since it is not a “public contract for work” to which the scheme applies. One of the critical arguments was that the agreement did not impose an immediate binding obligation on the developer to carry out development work and that this was necessary to trigger the procurement process.

Regulation 18 of the Public Procurement Regulation 2015 (PCR 2015) stipulates that contract design should not take place with the aim of excluding them from the scope of the regulations. Although the agreement was reached prior to the entry into force of the 2015 PCR and the 2006 Public Procurement Regulation does not include a provision equivalent to Regulation 18, the Court of Justice recognized in Part 166 of the High Court decision on this point: “The parties agree that for the purposes of this proceeding, there is no substantial difference between the previous legislation and the existing legislation they replace.” 13. In the Scottish case Lightways (Contractors) Ltd/Inverclyde Council [2015], CSOH 169 was deprecated, but details of the value of the civil fine imposed are not made public. Faraday Development Limited (Faraday) was the unsuccessful bidder in a contracting by the West Berkshire Council to appoint a development partner for the rehabilitation of an industrial area in Newbury. The Commission conducted a competition process that was conducted in accordance with its obligations under the Local Government Act 1972, at p. 123. However, in accordance with the Commission`s belief that the transaction was an exempt land transaction, competition was not implemented in accordance with the Public Procurement Regulations (Regulations)1. The definition of a public works contract in the RCP seems superficially misleadingly simple.

In summary, this is because the longer-term outcome of the development agreement was the procurement without a legal tendering procedure.


Shez