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UK Public Procurement Reform

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The exit from the European Union presented a unique opportunity for the UK Government to reform the country's public procurement regime, and the Public Procurement Bill sets out the detail of its proposal to do just that. After over two years of policy development, the Bill is now progressing through Parliament (having had its second reading on 25 May 2022).

Spanning 113 pages, the Bill aims to move away from the existing EU-developed system and seeks to adopt a more simplified approach to procurement, prioritising boosting growth and productivity, reflecting a core theme of the UK's policy decisions of late. Whilst the Bill is not in final form and may see some changes throughout its legislative journey, we have set out some key considerations below.

Key Considerations

Procurement Objectives

Section 11 of the Bill enshrines in law the objectives that a contracting authority must have regard to when carrying out a procurement. Namely these are value for money, maximising public benefit, transparency and integrity and are specified with the aim of influencing decision-making throughout the procurement process.

Although these objectives will be familiar to those involved in bidding for public sector work, we'd like to see clearer guidance for bidders (and contracting authorities) to understand how these objectives should influence the procurement process in practice. This is especially the case for 'value for money', where the more usual measures of 'value' (i.e., total cost of ownership) may not be appropriate for services being provided by all bidders—for example for solutions involving the use of open technologies.

It will also be interesting to see whether these objectives change as the Bill is debated and progresses. During the Second Reading of the Bill, there were questions raised as to why there was no mention of objectives relating to sustainability or delivering social value.

Most Advantageous Tender Test

A more significant change is the shift to awarding a contract to the 'Most Advantageous Tender' rather than the 'Most Economically Advantageous Tender'. This is implemented in s.18 of the Bill, and will allow contracting authorities to consider non-financial factors when deciding to whom to make an award. By giving more consideration to social value when procuring public contracts, the Government's hope is that this will assist with longer-term market sustainability and encourage innovation and levelling up.

This change will make it increasingly important for bidders to emphasise the advantages of their tenders outside of the traditional financial model. It will be interesting to see how public bodies will weigh these other factors against financial advantages, and how this will be presented in the evaluation criteria published in Tender Notices.

Spotlight on Transparency

Notices

With an increased focus on transparency, contracting authorities will also be required to publish various notices throughout the procurement process. Although some of the notices are familiar, there is also a range of new notices. Publication requirements will include:

  • Tender Notices;
  • Contract Change Notices;
  • Transparency Notices; and
  • Payment Compliance Notices.

It will be important for contracting authorities to know when they must publish these notices, and what content to include. Equally, bidders should also be aware of the notice requirements and how their tender may need to be adapted in response to a notice being published.

Assessment Summaries

The transparency objective also feeds into the post-award stages. Although the Green Paper expressed a desire to move away from providing debrief letters to unsuccessful bidders, s.48 of the Bill requires contracting authorities to provide an assessment summary to each supplier who submitted an assessed tender. This will continue to provide clarity to bidders as well as an opportunity to learn valuable lessons for future bids. It may also deter bidders from drawing their own conclusions as to why their tender was unsuccessful, reducing the risk of unwarranted challenges.

Fewer Procurement Procedures

Perhaps the most significant procedural change is the reduction in number of options, The Bill proposes just three:

  1. The first is a new flexible competitive procedure, which will allow the contracting authority to design a process that best meets the needs of the particular procurement. The process must be a proportionate means of awarding the public contract, taking account of the nature, complexity and cost of the contract.
  2. The second is an open procedure, which is defined in s.19 of the Bill as "a single-stage tendering procedure without restriction on who can submit tenders".
  3. There is also a direct award procedure, which can be used only in the limited situations set out in the Bill and is designed to assist in crises, such as the Covid-19 pandemic.

Although the new flexible competitive procedure will require more planning at the outset of the procurement procedure for both contracting authorities and bidders, this should allow processes to be better tailored to the particular tender and facilitate a smoother process for all parties.

Further guidance on this is expected, along with template options for contracting authorities. It will be interesting to see the level of discretion given to contracting authorities and how flexible this procedure will really be in practice.

Next Steps

The Bill will now progress through to the Committee Stage, with additional amendments almost inevitable. Further statutory and non-statutory guidance is also expected, which should assist with exemplifying how some of the key changes will be implemented.

The Government has indicated that six months notice of the go-live date will be provided once the legislation has been finalised. They do not anticipate that the regime will come into force until 2023 at the earliest. However, there is no time like the present for contracting authorities and bidders alike to familiarise themselves with the potential changes to come.

If you're going to be affected by these changes and would like to discuss any of the upcoming changes with our team, do please get in touch.

With special thanks to Trainee Solicitor, Charlie Smith for his contribution to this article.

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Areas of Expertise

Public Procurement