What we know so far and what might happen
To aid buyers across the UK public sector, BiP Solutions’ Procurement Advice and Support Service (PASS) is providing access to a range of Briefings, Blogs and Webinars specifically relating to the forthcoming reforms to public procurement, designed to help buyers navigate the changes and challenges that lie ahead – ensuring that they are able to work effectively, compliantly and responsively in a dynamic and fast-changing environment.
The UK Government published the Green Paper ‘Transforming Public Procurement’ on 10th December 2020.
This detailed many of the changes that the Government intended to make to the current procurement framework.
The Government then ran a three month consultation on the proposed changes that closed on 10 March 2021. Cabinet Office then set to work, sifting through the feedback and making changes to the proposals.
On the 11th May 2022, the government published their draft Procurement Bill commencing the legislative journey to the new legislation.
Currently, the Procurement Bill is progressing through the House of Lords, having already passed through its first and second readings and is currently at the Committee Stage.
To date (27th September 2022) over 520 amendments have been proposed, however, only around 70 of these have been ‘Agreed’ and none on their own has any substantive impact on the contents of the Procurement Bill.
Once the Committee Stage is complete, the Bill will move to the ‘Report Stage’ and then onto a 3rd Reading in the House of Lords, before going through the same overall process in the House of Commons.
Once passed through the House of Commons, it will then go on to final consideration of the amendments and then be presented for Royal Assent.
And that is the first big change.
Unlike all previous procurement regulations, which have always been statutory instruments, AKA secondary legislation, the new set will be an Act of Parliament and therefore primary legislation, or Law.
This will change the way in which the rules are interpreted.
Currently, much of the regulatory architecture is ‘woolly’, leaving the interpretation of the regulations to the buyers’ decision, however, once the Act is passed, there will be a need to follow a more defined structure in many instances, with failure to do so being actionable by suppliers.
Competitive Flexible Procedure
Immediately, this legal positioning raises concerns, particularly with the new Competitive Flexible Procedure.
The concept behind the new procedure is flexibility, affording buyers endless variables in how to apply the procedure.
In the Procurement Bill it defines methods for excluding suppliers, however it also allows buyers to modify the award criteria prior to final evaluation (proviso this does not result in material contract variation, whereby, had the change occurred previously, an excluded supplier may have been successful).
Given the fact that no rigidity exists in this procedure, the risk in how it is initially utilised present potential issues for buyers and it may eventually require the Courts’ to pass a proper definition on how to interpret what can and cannot be done.
That aside, there are many changes proposed to the current procurement regime.
Contract Notices
Currently, buyers, whether in the public sector, defence or utilities, have, in general, three common notices – Prior Information Notice (PIN), Contract Notice and Contract Award Notice, which are supplemented by a couple of additional notices for certain circumstances, such as the Voluntary Ex-Ante Transparency (VEAT) Notice for direct awards.
Even contracts in the Light Touch Regime follow this structure, albeit via a single notice for social and other specific services, which can be used for all three options.
Moving forward, there are 12 notices defined in the Procurement Bill, which are intended to deliver a greater level of transparency:
- Planned Procurement Notice – replacing the PIN Notice and allows for buyers to provide advance information to the market place and, if desired, to reduce the tender timescale.
- Preliminary Market Engagement Notices – to be used when buyers intend to undertake market engagement.
- Tender Notice – effectively the same as the current contract notice.
- Dynamic Market Notice – to be used when buyers intend to set up a Dynamic Marketplace.
- Transparency Notices – replacing the existing VEAT Notice.
- Contract Award Notice – defines that the contracting authority intends to enter into a contract.
- Contract Details Notice – defines that the contracting authority has entered into a contract,
- Procurement Termination Notice – must be published where a contracting authority decides not to award a previously advertised contract.
- Payment Compliance Notice – a contracting authority must publish a payments compliance notice if during the appropriate period—
(a) the authority made a payment under a public contract;
(b) a sum owed by the authority under a public contract became payable. - Contract Change Notice – to be published prior to a contracting authority modifying a contract.
- Contract Termination Notice – this is required where a contract has been terminated, by either party or by the courts.
- Pipeline Notice – a contracting authority must publish a pipeline notice before the end of the period of 56 days beginning with the first day of the financial year.
Framework Agreements
Framework agreements are regularly used to speed up and simplify the procurement process and call-off contracts under framework agreements require to be awarded in accordance with the appropriate Regulations.
The Procurement Bill offers two options for framework agreements for all types of contracts
Closed framework agreements of up to four years duration
As with current Frameworks, this would close off specific markets to suppliers, other than those on the framework, for a maximum of four years.
It will operate just as current Framework Agreements do and where an authority intends to set up a single supplier framework it will need to do so under the Closed Framework.
Open framework agreements of up to eight years with an initial (up to) three year closed period
Unlike the current Framework structure, this proposal would allow for suppliers to apply (via a tender) to join the framework at predetermined points.
If a contracting authority chose to have a framework with a duration of longer than four years, the key requirement would be that the framework must be re-opened to competition at least once, after the third year, for new suppliers to bid to join.
Dynamic Marketplace
The Procurement Bill proposes to replace the current Dynamic Purchasing System with a Dynamic Marketplace.
The Dynamic Marketplace will be a flexible, highly commercial tool with new suppliers able to join at any time with no maximum duration.
Procurements will be undertaken within a Dynamic Marketplace using the new competitive flexible procedure and the Dynamic Marketplace could be used for any type of procurement, not just common goods and services.
When setting up a Dynamic Marketplace contracting authorities will be required to publish a notice, to advise the market of the details and conditions for participation. This notice will need to remain continuously open to allow new suppliers who wish to apply to do so at any time.
Any supplier who meets the conditions for participating must be admitted and it must be noted that the number of suppliers cannot be limited in any way.
Standstill
The Standstill process is changing considerably.
Out will go the current standstill notice, replaced by a Contract Award Notice which will set out that the contracting authority intends to enter into a contract.
However, prior to publishing a contract award notice, a contracting authority will be required to provide an assessment summary to each supplier that submitted an assessed tender.
The assessment summary will provide information about the contracting authority’s assessment of the suppliers’ tender, and the most advantageous tender submitted in respect of the contract. (The successful bidder will only be given an assessment of their own tender)
The standstill period itself will be a period of eight working days (rather than 10 calendar days) beginning with the day on which a contract award notice is published in respect of the contract.
A contracting authority will not be able to enter into a public contract before the end of the mandatory standstill period, or, if later, the end of another standstill period provided for in the award notice itself.
Excluding Suppliers
Contracting authorities will be given greater scope for excluding suppliers than currently exists.
Suppliers will still be able to be excluded if they are in breach of mandatory exclusion grounds, or, if appropriate, discretionary exclusion grounds, however this can also be extended to included associated suppliers or sub-contractors who would be excluded on such grounds (although a period of time can be offered to replace such excluded entities).
Similarly, a supplier can be excluded if they are deemed to be guilty of improper behaviour or a threat to national security. Excluded suppliers may find themselves added to the central managed Debarment List.
Debarment List
If a supplier is deemed to be an excluded supplier, in relation to the section above, they may ultimately find themselves placed on the Debarment List.
This list will be maintained by a Minister of the Crown and any organisations on the list will not be permitted to tender for public contracts.
However, any company listed will be given clear details as to the reason for Debarment and the date such Debarment will expire.
Suppliers will have the right of appeal against inclusion on the Debarment List and a Minister of the Crown may conduct, or consider the findings of, an investigation into the excluded supplier.
National Procurement Policy Statement
Included within the Procurement Bill, the National Procurement Policy Statement (NPPS) sets out that Government believes that public procurement should be leveraged to support priority national and local outcomes where it is relevant to the subject matter of the contract and it is proportionate to do so.
Such is the emphasis put on the NPPS that it was published in June 2021, ahead of the new legislation that will support it.
Contracting authorities are expected to consider a range of social value outcomes alongside any additional local priorities:
- Creating new businesses, new jobs and new skills in the UK;
- Improving supplier diversity, innovation and resilience;
- Tackling climate change and reducing waste.
Such is the scope of the NPPS, we plan to provide two briefings in October and November, looking closely at the various recommendations within it, so please keep an eye out for these.
Similarly, we will be publishing a range of other briefings and blogs, covering topics such as Open Frameworks, Changes to the Challenge Process, Reserving Below Threshold Contracts and Changes to Standstill.
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.
