We are waiting for the Public Procurement Reform Bill to land – scheduled for this Spring. In the meantime, we have been considering what changes are likely to be included in the legislation and whether they will impact on current practice. One such proposal that will be taken forward is the move from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT).
The initial proposal under the Green Paper ("Transforming Public Procurement" – published in December 2020) was intended to align the new domestic regime with the requirements under the World Trade Organisation's Agreement on Government Procurement (the GPA), which sets out in Article XV (Treatment of Tenders and Awarding of Contracts) that, unless a procuring entity determines that it is not in the public interest to award a contract, a public contract shall be awarded to the supplier who has submitted the most advantageous tender (or, where price is the sole award criterion, the supplier who has submitted the lowest price).
In addition to aligning with the requirements under the GPA, the intention under the Green Paper was to give greater reassurance to contracting authorities that they can take into account a broad spectrum of issues in identifying what accounts for good value for money.
The Government's Response to the consultation on the Green Paper (published in December 2021) confirms that, in taking forward this proposal, the Government is seeking to reinforce this message: that contracting authorities can take a broader view of what can be included in the evaluation of tenders, and what can be taken into account when determining which evaluation criteria are to be applied to procurements. Of note, the Response also sets out that the Government considers a move to MAT will support the levelling up agenda (by encouraging contracting authorities to give more consideration to social value when procuring public contracts).
The impact of a move from MEAT to MAT should not cause too many difficulties for contracting authorities. The shift is one of terminology rather than substance and this largely represents a "reshuffling of the deckchairs" rather than any sweeping reform. Indeed, it is unlikely to change how we currently identify the tenderer to be awarded a public contract. The Green Paper itself recognises that the approach under MAT (i.e. taking a broader view of what can be included when evaluating tenders) is already provided for under the existing procurement regulations, and the change is more about reinforcing and adding clarity to what can be included, rather than about changing scope.
Of note, under the existing regulations, regulation 67 of the Public Contracts Regulations 2015 (the PCR 2015) sets out that the most economically advantageous tender shall be identified on the basis of price or cost, and "may include the best price-quality ratio, which shall be assessed on the basis of criteria, such as qualitative, environmental and/or social aspects, linked to the subject-matter of the public contract in question". Such criteria may include, for example "quality, including technical merit, aesthetic and functional characteristics, accessibility, design for all users, social, environmental and innovative characteristics and trading and its conditions…".
Additionally, regulation 67(4) provides that the cost element of the procurement may be expressed as a fixed price or cost (e.g. a budget), on the basis of which tenderers will compete on the basis of the quality criteria alone.
It is clear from the above, that the current legislative framework already affords significant flexibility to contracting authorities to take a broad view of the evaluation criteria to be used in public procurement exercises, and the move from MEAT to MAT seems more about refocussing minds rather than introducing any substantial change to how we evaluate tenders.
In addition to the adoption of MAT in the evaluation of tenders, the Response also confirms that in certain prescribed circumstances, the proposal under the Green Paper to break the link between the subject-matter of the contract and the award criteria will also be taken forward. These specific circumstances will be set by secondary legislation, but will likely be in relation to areas such as carbon net zero, modern slavery and social value. These scenarios align with wider government priorities, and seem to also support the message that wider issues are able to be taken into account when evaluating tenders.
It seems that the move from MEAT to MAT also reinforces the messages that have come from various Procurement Policy Notes over the last few years, including PPN 06/20 "Taking Account of Social Value in the Award of Central Government Contracts", which introduces the new social value model for central Government, ensuring that social value benefits are explicitly evaluated in all central Government procurements (where relevant), and goes beyond the requirement to "consider" social value as set out in the Public Services (Social Value) Act 2012.
Additionally, the importance of wider considerations when evaluating tenders has been emphasised in the National Procurement Policy Statement (the NPPS) under PPN 05/21. Under the NPPS, contracting authorities should already be considering the following national priorities as part of their procurement activity, alongside any other local priorities/objectives:
- creating new businesses, new jobs and new skills;
- tackling climate change and reducing waste; and
- improving supplier diversity, innovation and resilience.
The NPPS is due to be incorporated into the domestic legislation and contracting authorities should familiarise themselves with its requirements now, incorporating the national priorities where appropriate into their procurements.
