All Change! 12 things you need to know about the Procurement Bill

There’s been a lot of chatter (in procurement circles at least!) about the procurement reforms and the new Procurement Bill currently making its way through Parliament.

There’s a lot to read too, from Cabinet Office guidance and updates to academic analysis of how the new laws will change the regime.

This comes with a health warning that the Bill is of course not yet in its final form, and has a few legs left of its journey through Parliament before it receives Royal Assent.

We are assured by the Cabinet Office that once it has been passed into law, we will have a grace period of at least 6 months before it comes into force so that we can all get to grips with the changes before they take effect.

Our best guess at present is that the Bill will not become law until early 2024.

In this article Alison Walton, partner and head of procurement summarises 12 need to know points from the new Bill.

1. One statute

The Procurement Act (when it comes into force) will be the only piece of primary legislation you will need to consult, it will consolidate the previous set of regulations relating to public contracts, utilities contracts, concession contracts and defence and security contracts.

However, we might well have a raft of secondary legislation to consult.

Many of the more detailed parts of procurement law are yet to be addressed in the Bill, which provide that the Secretary of State will make Regulations covering, for example, light touch services contracts, the content of notices to be published in FTS and authorities must have regard to National Procurement Policy Statements published from time to time by a Minister of the Crown (where approved by Parliament).

2. Four ways to award a contract

We will still have many of the “exemptions” to the requirement to advertise that we have under the current regime. Contracts can be awarded in one of the four following ways:

• Competitive award
• Direct award in special cases
• Direct award after switching procedures
• Award under a framework

3. Two competitive tender processes

Authorities can choose from two procedures, one similar to the current “open” process and one which is much more flexible:

• Single-stage tendering procedure without a restriction on who can submit tender
• Flexible process which the authority can design as it thinks appropriate which may include down-selection and negotiation, as long as the process is proportionate to the nature, complexity and cost of the contract

4. No Treaty Principles

Well, sort of! We no longer have overriding EU Treaty principles of transparency, equal treatment, non-discrimination and proportionality. There are now procurement objectives; the Bill requires that in carrying out a procurement an authority must have regard to the importance of:

• Delivering value for money
• Maximising public benefit
• Sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions;
• Acting, and being seen to act, with integrity

Arguably the final two objectives cover transparency and a combination of all of the former principles, and the Bill refers in certain sections to the need for certain actions of the authority to be proportionate (for example, its design of the award procedure based on the nature of the contract) and transparent (not least through the use of transparency notices and assessment summaries).

5. Terminology – all change!

Much of the terminology we know and love will be replaced. Examples include:

• PIN – now a “Planned Procurement Notice”
• Contract Notice – now a “Tender Notice”
• Selection Criteria – now “Conditions of Participation”
• VEAT Notice – now a “Section 43 Transparency Notice” (and now mandatory in some direct award scenarios)
• Dynamic Purchasing Systems – now “Dynamic Markets”
• Contract Award Notice – now a “Contract Details Notice”

6. Frameworks

Framework agreements will need to contain information on:

• Estimated value
• The authorities which are able to call-off from the framework
• Pricing
• Description of the goods and services which can be called off
• Selection process for award of contracts
• Term of framework

“Open frameworks” will be permitted - these are frameworks which can be renewed for successive terms up to a maximum 8 year term.

New suppliers can be added at each renewal and the number of suppliers on the open framework can be limited or unlimited with tenders being assessed at each renewal.

7. Contract Award Process – Assessment Summaries, Contract Award Notices and Standstill

Following evaluation, under the new Act each tenderer must receive an “Assessment Summary” which sets out information about the evaluation of the tenderer’s own submission and, if different, the successful submission. Exactly what this summary must contain is still to be determined but we anticipate it will be a similar level of detail to the current standstill letter requirements.

There then needs to be a Contract Award Notice published – this is not the same as the Contract Award Notices we currently see. A new format CAN must be published before entering into a contract. The notice must set out the authority’s intention to enter into the contract together with information to be specified in Regulations which will follow.

The publication of a CAN is what will start the Standstill Period, rather than receipt of the assessment summary by the tenderers. The standstill period will now be 8 working days beginning with publication of the CAN which provides slightly more certainty that the current 10 calendar days requirement which can be complicated by weekends and bank holidays.

Within 30 days of contract award a further notice known as a “Contract Details Notice” will need to be published setting out details of the contract awarded.

8. Contract Publication

Within 90 days of contract award, where the contract has a value of £5 million or more, the full contract must be published by the authority. This will apply to all types of contracts other than those entered into by private utilities and “user choice” contracts which are directly awarded.

9. Contract Management

Before entering into a contract with a value of £5 million or more, an authority must set and publish at least 3 KPIs in respect of the contract by which it will measure performance. This will not apply to frameworks or light touch services contracts.

Where these KPIs have been set, then at least once in every 12 months during the term of the contract the authority will have to assess performance against the set KPIs and publish information (to be confirmed) in relation to that performance.

If any performance management actions have been taken against the contractor (for example, termination, awards of damages, settlement, non-remediation of breaches or poor performance, then details of this must also be published by the authority.

10. Contract Changes

The circumstances in which an authority may modify a public contract will remain very similar to those in the current regime under Regulation 72 of the Public Contracts Regulations 2015. However, one striking difference is the level of transparency required around such changes under the Bill.

In most circumstances where a change to a contract is proposed, the authority must first publish a “contract change notice” which sets out that the authority intends to change the contract together with details of the change.  There is no minimum period before which the contract can be modified following publication of the notice, but the Bill does provide for a “voluntary standstill period” following publication of a contract change notice” which can be applied to allow for any issues from the market to be flushed out.

Where the change is to a contract which is valued at £5 million or more (either before or following the change) then a copy of the modified contract must be published within 90 days of the change being made.

11. Contract Termination

Within 30 days of termination or expiry of a contract, a contract termination notice must be published by the relevant authority. This is presumably to give the market more transparency on renewal or direct award of public contracts which otherwise might remain “under the radar”.

12. Below Threshold Contracts

The provisions on below threshold contracts will remain largely unchanged under the new Act, the below threshold regime will remain very similar to that contained in the current Part 4 of the Public Contracts Regulations 2015.

Much of the Bill, though it looks quite different from the current Regulations, provides for a regime which will in practice be quite familiar to procurement professionals. Whilst this might lead to a sigh of relief from some, we are going to have to get used to a change in terminology and possibly most importantly, a change in attitude to transparency which may, we think, have the biggest impact on authorities and bidders alike and may well change trends in procurement challenges in future.

We will be publishing more alerts and procurement e-news to keep you up to date as the Bill progresses through Parliament, together with some bespoke training sessions on how to get to grips with the new regime. Watch this space for further details.

Muckle’s procurement team can provide support to public and private sector developers, utilities and suppliers on this Bill and beyond.

For more information or for expert advice tailored to your organisation, get in touch with Alison Walton using [email protected] or 0191 211 7850.