Do you ever get something that niggles at you?
I mean really niggles, like it gets into your bones, you can’t think of anything else!
Procurement Reform is a bit like that, but in this case, it was just three little words.
Three little words that I hadn’t really thought too deeply about until I submitted my last Briefing https://www.procurementreform.co.uk/amending-the-changes/ for proofing.
Our proof reader, Sophie, has amazing insight into language and, in particular, the language of procurement legislation. In fact, Phil Kinnell and I count on her to keep us on the straight and narrow.
In the Briefing, in respect of SMEs, I had quoted from the current iteration of the Procurement Bill “The duty placed on contracting authorities to ‘have regard to Small and Medium-Sized Enterprises’ will be enshrined in the new legislation.” and Sophie asked a simple question ‒ What does ‘have regard to’ actually mean?
That started the niggle.
What does ‘have regard to’ actually mean, and what requirement could this place on contracting authorities?
The standard definition is simply ‘pay careful attention to’ but the legal meaning is somewhat stronger.
The legal interpretation is defined as meaning ‘to give genuine attention and careful thought to the matter’
From a contracting authority’s perspective, this means that the authority will need to show clearly that they have taken careful consideration as to whether the requirement is appropriate and they must be able to clearly justify any decision not to have applied the action.
In the context it was already mentioned in, “The duty placed on contracting authorities to ‘have regard to Small and Medium-Sized Enterprises’ will be enshrined in the new legislation.”, this will probably mean that contracting authorities will need to carefully consider whether a procurement exercise should be constructed to encourage SMEs to participate.
The obvious route to determining this would be whether it would be suitable to divide the contract into lots.
The normal argument, that this would require the authority to manage multiple contractors, rather than one, may not stand up to challenge where the duty is enshrined in legislation.
Indeed, Regulation 17 of the Procurement Bill currently stipulates that:
“(1) Before publishing a tender notice in respect of a public contract, a contracting authority must consider –
(a) whether the goods, services or works to be supplied under the contract could reasonably be supplied under more than one contract, and
(b) whether such contracts could appropriately be awarded by reference to lots.”
…and if it is appropriate to divide the contract into lots, it states the following:
“(2) If the contracting authority considers that the goods, services or works could reasonably be supplied under more than one contract and such contracts could appropriately be awarded by reference to lots, the authority must –
(a) arrange for the award of the contract or contracts by reference to lots, or
(b) provide reasons for not doing so.”
The final point, 2(b), is the key to the previous issue of ‘have regard to’. It will no longer be acceptable for a contracting authority to merely pay lip service to opening contracts up to greater competition. Instead, it will be a legal requirement to ‘to give genuine attention and careful thought to the matter’, because they will need to show a valid reason if they have not done so.
Find further procurement reform comment and insight at www.procurementreform.co.uk.
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