After more than five months in the House of Lords, the Procurement Bill has seen a number of amendments as it has progressed through the various readings and Committee Stage.
Some of the changes are more of a clarification, whilst others will have some significant impact going forward.
Among the most noticeable changes is the increase in “comply or explain” requirements in various legal and regulatory situations.
With the Second Reading in the House of Commons scheduled for 9th January 2023, the Bill continues to move at pace, with a target of Spring 2023 to achieve Royal Assent.
In this Briefing we identify some of the key changes that need consideration by buyers and suppliers.
Preliminary Market Engagement
One notable aspect is the role of Market Engagement in the procurement process.
The PCR2015 referenced the ability of contracting authorities to conduct Preliminary Market Engagement. However, the current draft of Section 15(1) of the Procurement Bill suggests a more targeted set of objectives for Preliminary Market Engagement which may provide both authorities and bidders comfort when engaging in the process.
However, the importance placed on the process is demonstrated through a proposed change to Section 16 of the Bill requiring contracting authorities to issue a Market Engagement notice prior to issuing a tender notice or explain the justification, in the tender notice, for not publishing a Market Engagement notice.
National Procurement Policy Statement
Contracting authorities are already required to ‘have regard’ to the National Procurement Policy Statement (NPPS).
Previously it appeared that failing to do so could result in a possible claim under the Procurement Bill, but a new clause appears to clarify that the requirement to ‘have regard’ will not be enforceable under the Procurement Bill, although it may still be actionable via judicial review.
Most Advantageous Tender
As we explained in a previous blog, the requirement to determine the winner of public procurement exercises will change from the Most Economically Advantageous Tender (MEAT) (in the Public Contracts Regulations 2015) to the Most Advantageous Tender (MAT).
The main difference is that MAT widens the approach to determining the best solution to make it appear less prescriptive.
This has been taken by many observers to mean that procurers will have greater freedom to take account of things such as sustainability in their procurements and not be so limited to cost and quality.
One interesting outcome following the Committee Stage is the proposal to require a contracting authority to award a contract on the basis of not only which tender scored highest, but also which tender best meets the authority’s requirements.
Initially this might seem a logical step. However, there is a major question that hasn’t been addressed in the proposal, which is what happens if the highest scored bid is not the one which best meets the authority’s need.
Light Touch Frameworks
The Light Touch regime sees a proposed change in respect of Frameworks, which will no longer be limited in length. How this will work in practice obviously remains to be seen and exactly what services will fall within the definition of “light touch” will need to be clarified.
It will also be interesting to see how this may conflict with or complement the removal of clinical services from the procurement regime, under the Health and Care Act 2022.
Audited Accounts
There will be a provision in the Procurement Bill that will stop contracting authorities requiring bidders to have audited accounts (unless required by the Companies Act 2006) or to hold specific levels of insurance prior to the award of a contract.
Debarment List
Another significant change is to another subject we’ve previously covered, the Debarment List.
A supplier may be placed on the debarment list where a contracting authority excludes them from a procurement on the basis it is:
- an “excluded” supplier (i.e. a supplier to whom a mandatory exclusion ground applies and the contracting authority considers there is a likelihood of reoccurrence) or
- an “excludable” supplier (i.e. a supplier to whom a discretionary exclusion ground applies and the contracting authority considers there is a likelihood of reoccurrence)
and, following a referral to the appropriate authority, it is determined that they should be placed on the debarment list.
Being on the debarment list will prevent a supplier from being awarded any public contracts until such time as they are removed from the list.
An amendment to Section 27 of the Procurement Bill has proposed that contracting authorities will need to establish whether a bidder intends to sub-contract any part of the contract and, if so, to establish whether any intended sub-contractor is subject to the debarment list.
If this is the case, the contracting authority would be required to allow the bidder to replace the sub-contractor and, if they failed to do so, to exclude that bidder.
This of course pre-supposes that the contractor has already pre-identified its sub-contractors.
Transparency
One interesting change in respect of Transparency requirements is the need for contracting authorities to notify a bidder of their intention to disregard a bid or exclude their bid, where the underlying cause is an associated person or sub-contractor (see Debarment above).
Modifications and Changes
The issue of Change or Modification to contracts has seen a number of proposed amendments at the Committee stage.
One amendment has sought to clarify what is meant by a modification “materially” changing the scope of a contract.
The intent to make this issue clearer is welcome, but it will be essential that the guidance does not cause even greater confusion or this could lead to challenges in the future.
Small and Medium-Sized Enterprises
The duty placed on contracting authorities to ‘have regard to Small and Medium-Sized Enterprises’ will be enshrined in the new legislation.
Threshold
The threshold above which contracting authorities must publish transparency data (KPIs, publication of contracts, contract change notices) has been increased to £5 million from the previous £2 million. However, it is unclear at this time whether this will be applied to pipelines.
What next?
No doubt there will be many more significant changes as the Procurement Bill goes forward and proceeds through the House of Commons.
Find further procurement reform comment and insight at www.procurementreform.co.uk.
If you would like advice on this or any other aspect of public procurement, please complete our enquiry form or call us on 0141 270 7666.
While all information provided is given in good faith, the contents of these articles are not to be construed as legal advice or a substitute for such advice, which you should obtain from your legal advisors if required. We are not and shall not be held responsible for anything done or not done by you as a result of the information provided.
