Speed Read: Government Response to its consultation on Procurement Reforms

10th Dec 2021 | Procurement

The Cabinet Office has released its eagerly anticipated response to its Green Paper on the reform of the UK’s public procurement regime. It is billed as a move away from EU-style bureaucracy and a move towards a simplified approach to procurement that boosts growth and productivity within the UK, maximising value for money and social value, promoting efficiency, innovation and transparency.

You may recall there were some wide ranging proposals in the Green Paper consultation which ran from December 2020 to March 2021, particularly in relation to bidder remedies and transparency, which were welcomed and caused concern in equal measure. We now have the response to the consultation and an indication of how the new laws around public procurement will address the issues raised in the green paper. We have provided a summary below. This is by no means exhaustive, but gives a flavour of what we need to prepare for when the new Regulation take effect. The full response paper can be accessed here.

One regulatory framework

It seems likely that we will have one Procurement Act or similar covering all procuring entities (public sector, defence and utilities) with the ability to create secondary legislation to deal with specific issues.

Light Touch Services

The light touch regime will be retained, although the Government will review the services which fall into this category. Previously the proposal was that it would be removed altogether but there was opposition to this in the responses it received. This means there will still be a category of services to which the full regime does not apply. Where service user choice is important, the Cabinet Office is still considering the extent to which these services can be exempted from the regime to allow for this to happen.
There is going to be a regime for integrated commissioning between local authorities and the NHS which will apply to what are referred to as “user focussed services” – the Cabinet Office is working with DHSC to formulate a coherent procurement regime for these services.

Pipeline Notices

There will be public notice requirements for planning procurements and early market engagement which will provide transparency of pipelines and processes, creating flexibility for more innovative procurement and putting more emphasis on pre-market planning for procurements.

Evaluation

There will be a shift from MEAT (most economically advantageous tender) to MAT (most advantageous tender) which will allow authorities to take a broader view of what they can include in their evaluation including wider social value considerations.

Transparency

In the Green Paper there was a proposal for full scale transparency throughout the procurement process including fully accessible internet publication of all bids received, all evaluation notes and all procurement documents throughout the process and removal of the requirement for a standstill letter – this was perhaps the most talked about proposal from the Green Paper.
After concerns were raised in responses to the consultation about the burden this could place on authorities, the Cabinet Office says it will scale this down somewhat in the new legislation.
There will still be a requirement for more transparency in the process than there is at present but these requirements will, for the most part, be proportionate to the scale and value of the procurement in question.
Redacted evaluation documents will be disclosable to all bidders in relation to the winning bid only.
Unsuccessful bidders will privately receive a copy of the evaluation notes in relation to their own bid.
There will be no requirement for a standstill letter because the above documents should allow bidders to compare the relative advantages of the winning bid against their own.

Contract Award

Instead of the standstill letter, an authority will need to publish a contract award notice setting out its intention award the contract, the identity of the winning bidder, the contract value and the identity of all bidders.
At this point the participants will obtain their evaluation documents referred to above.
Debrief letters can be issued in addition but will not be mandatory.
The Cabinet Office is still considering how to deal with information to be released when a contract is awarded under a framework or DPS (Dynamic Markets).

Damages and Remedies

There will be no cap on damages for bidders – you may recall it was suggested that there should be a cap on damages at 1.5 times the bid costs. This is not going to feature in the reforms.
There will be no primacy of pre-contractual remedies, so bidders’ ability to access remedies will remain largely unchanged and will depend on where in the process the challenge is brought.
There will not be a separate independent review body for procurement challenges, nor will it utilise an existing review body for low value claims and issues relating to ongoing competitions.

Procurement Processes

There will be two main procurement processes – open (no negotiation) and competitive flexible (ability to negotiate).
There will be one further process for use in certain circumstances such as extreme urgency called the “limited tendering procedure” which will require publication of a notice where this process is used.

Procurement Review Unit (PRU)

There will be a new unit within the Cabinet Office to investigate poor procurement practices, address systemic breaches of the procurement rules and make recommendations to authorities about the way they run procurements. It will be known as the Procurement Review Unit (PRU). It will not function as an appeal body however.

Centralised Debarment list

There will be a central debarment list for excluded suppliers where a supplier is assessed as meeting a ground for exclusion and there is insufficient evidence of self-cleaning.
UK and overseas suppliers can be added to the list.
Suppliers will remain on the list for 5 years.
Suppliers will be entitled to apply for early removal from the list if they can show they have self-cleaned.

Open and Closed Frameworks

There will be two types of frameworks – open and closed.
Closed frameworks will run as they do at present, with suppliers unable to join once the framework has been established.
Open frameworks will allow suppliers to join during their term at various set points and must not be closed to the market for longer than 5 years.
The maximum duration of an open framework will be 8 years and it must contain at least 2 suppliers.

Contract Amendments

The Cabinet Office is considering a new provision specifically in relation to amending complex contracts to deal with circumstances which have arisen outside of the parties’ control requiring an amendment to the contract.
There will be a requirement for a Contract Amendment Notice to be issued when a contract is changed during its term.

The Cabinet Office clearly still has some issues to consider and decide upon before we will see any draft legislation. What we do know is that no legislation will come into effect before 2023, and authorities and bidders will be given at least 6 months between draft legislation being released and it coming into force, as the Government has recognised the need to become familiar with any new regime, and the need to publish guidance and provide or training to upskill procurement teams. Watch this space for updates on any further detail released about the new regime!

For further information please contact Alison Walton on 0191 211 7850 or email [email protected]

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