Transparency of procurement under the Procurement Act 2023 – more information but less openness?

What is "transparency"?

One of the Government's key objectives in the Procurement Act 2023 is to improve the transparency of public procurement in the UK. 

In a policy paper entitled "Transforming Public Procurement – our transparency ambition" published in June 2022, the Government set out its aim in the following terms:

"One of the goals of the Procurement Bill [now Act] is to create a fully transparent public procurement system. We want everyone from citizens to ministers, large companies to sole traders, those responsible for multi-billion pound defence contracts to people buying stationery on behalf of a district council, to be able to view, search and understand what the UK public sector wants to buy, how much it is spending, and with whom." 

Transparency, of course, has long been an important feature of the current EU-based procurement rules.  It is a fundamental principle which, together with the principle of equal treatment, enables potential suppliers to find out about public contract opportunities, to be treated fairly when bidding for contracts, to know what they are bidding for and how bids will be evaluated, and to have sufficient information to enforce their rights in the event of a breach of the rules. 

So, what does the Government mean when it speaks of its ambition to create a "fully transparent" public procurement system?

In the first place, it appears to mean something different from the conception embodied in current rules of a necessary underpinning of fair competition in the award of public contracts.  In fact, the objective of fair competition seems at best to be recognised in passing.  As we noted in our article on the scope, principles and objectives of the Act, the concept of transparency within particular procurements appears to have been downgraded to a matter that contracting authorities must merely have regard to.

Instead, the Government's transparency ambition focuses on creating greater visibility of public procurement to help the public (and Government!) understand, for example, how much money the public sector spends on purchasing goods and services, which contracts finished on time and on budget – and which did not – the true lifecycle of Government contracts, pipelines of future work, which companies have been excluded from procurement due to fraud, corruption or persistent poor performance, and who is really benefiting from public money. 

Armed with this information, the Government wants to "open up opportunities within the public sector to small businesses, driving down prices, increasing innovation and improving the business landscape across the country"; to "give contracting authorities the data they need to collaborate better, drive value for money and identify cost savings in their procurements, so they can monitor for signs of waste and inefficiency"; and, most importantly (it is said) "allow taxpayers to see how much is being spent through procurement on and in their local area, who it is spent with and how it is delivering on local priorities".  The transparency reforms are expected to be "transformational in unlocking greater value for money, opening up opportunities and increasing public trust in UK procurement".[1]

How will transparency be achieved under the Act?

How will these undoubtedly laudable outcomes be achieved?  By the introduction of a lot of new bureaucracy in the form of a large number of new notice requirements on contracting authorities, to be published on a central digital platform.  The draft Procurement (Transparency) Regulations 202X[2] (Draft Transparency Regulations), specifying the content of the new notices, contain no fewer than 23 different types of notice. 

Of course, not all these notices will be applicable in all procurements covered by the Act nor to all contracting authorities. A full summary of all the new notices and the circumstances in which they apply can be found here: New notices and publication requirements under the Procurement Act 2023.

Implications for contracting authorities and suppliers

Whilst the present procurement rules themselves are not short of noticing provisions, the noticing requirements of the current rules focus largely on the interests of suppliers.  They include various forms of call for competition and requirements to provide information to unsuccessful suppliers about the reasons for their rejection.  There are also a number of voluntary notices (e.g. voluntary ex ante transparency notices that may be published before making a direct award or a non-competed contract modification, or certain forms of contract award notice) that may be used defensively by contracting authorities to mitigate the risk of challenge.  

The noticing regime under the Act will involve a significant expansion of the burden on contracting authorities to publish information about procurements.  In addition to notices advertising particular procurements or authorities' pipelines of forthcoming contracts, authorities will have to publish a number of additional post-tender notices as well certain in-life notices during the term of public contracts, including:

• Post-tender, authorities will have to publish a notice on making the award decision but before standstill identifying the successful and unsuccessful bidders (called a contract award notice – not to be confused with the present form of contract award notice published after a contract is entered into). 
• A contract award notice will also have to be published before award in the case of a contract awarded under a framework or a dynamic market (formerly, a dynamic purchasing system).  This is the case whether the contract is awarded following a further competition or by way of direct award.  This is a significant change to the noticing requirements for frameworks under the current regime, where very little information has to be provided after the framework itself has been established.
• Before publication of a contract award notice, authorities will have to provide tenderers for the public contract with an "assessment summary" providing information about the scoring of tenders.  This will replace the current award decision notification (or "Alcatel" letter).
• Mandatory notices will need to be published before making a direct award without competition (except under framework) or a contract modification.
• For larger contracts (£5m+), authorities will have to publish key performance indicators and an annual assessment of the supplier's performance against those KPIs.
• Notices must also be published in the case of a supplier's breach or failure to perform.
• Most public sector contracting authorities will have to publish notices about their own compliance with payment terms in public contracts.

Notices will, as mentioned above, have to be published on a single central digital platform, which should help to improve the consistency of data published about procurements and enable Government to identify trends in procurement. 

From the perspective of suppliers, the new noticing provisions will provide greater visibility of procurement practice generally and may provide some interesting opportunities for competitive positioning or even legal action, in particular where mandatory notices reveal direct awards or contract modifications that benefit competitors. 

But for suppliers there are also significant risks arising from the new noticing regime.  Publication of the identity of unsuccessful bidders before standstill and before any opportunity to challenge the outcome is likely to be highly unwelcome to those who do not succeed in winning a contract and will need to be carefully managed.  The regime for publication of performance against KPIs and notices in the case of breach or failure to perform is deliberately intended to give authorities the ability to "name and shame" suppliers who are considered to be under-performing and could significantly alter the dynamics of contract management.  

At the same time, proposed changes to the form and content of notices and information provided to suppliers about particular procurements, in particular the assessment summary mentioned above, may in fact reduce the amount and qualify of information that suppliers currently receive.  If implemented, these could alter the strategy and tactics of procurement challenges. 

Next steps

The Draft Transparency Regulations set out the Government's proposals for the detailed content of the new notices.  The consultation on the Draft Transparency Regulations closed in August 2023.  The Government's response to the consultation and the final form of the regulations are awaited.  We will provide more detailed commentary on key new notices once the final regulations have been issued.