Procurement Bill – update on legislative reform
On 11 May 2022, the Government introduced the much-anticipated Procurement Bill (the Bill) into the House of Lords where it received its first reading. The Bill follows an extensive consultation process on procurement reform following the UK's withdrawal from the European Union and is currently undergoing legislative scrutiny through the Committee Stages in the House of Lords.
Representing the Government's post-Brexit reform of the legislative framework, the Bill sets out significant and wide-ranging changes to the existing legislation.
As trailed by the Government's Green Paper on Transforming Public Procurement (the Green Paper), and the subsequent response to the consultation process (the Response), the Bill seeks to incorporate all relevant procurement rules into a single framework, moving away from the current "patchwork" approach to regulation under the current procurement rules, and consolidating a number of existing Regulations (including the Public Contracts Regulations 2015, the Concession Contracts Regulations 2016 and the Utilities Contracts Regulations 2015).
Perhaps unsurprisingly, the Bill includes significant linguistic and stylistic differences to the existing regime (which represented a copy-out approach of the European legislation into domestic law), and contracting authorities and bidders alike will need to familiarise themselves with the new approach to both style and form adopted throughout the Bill.
This article sets out some of the key changes arising in the Bill.
The Bill has made the much anticipated move to awarding on the basis of the "most advantageous tender" (rather than the most "economically" advantageous tender as required under the existing rules), with the intention that contracting authorities are able to take a broader view of what can be included when evaluating tenders.
In practice, this is a matter of style over substance, as contracting authorities already have significant flexibility under the current regime to take into account criteria including (amongst others) technical merit, functional characteristics and social, environmental and innovative characteristics (Regulation 67, Public Contracts Regulations 2015). This change is therefore about emphasis rather than substance.
Flexibility in the procurement process
A key Government objective in drafting the Bill has been to improve flexibility in the procurement process. Flexibility in the approach to procurement processes has been captured in the Bill by slimming down the numerous regulated procedures currently in use and including an option for two main competitive tendering procedures: an "open procedure" (single-stage, open to all) or the new "competitive flexible procedure". The Bill also retains the option to make direct awards in certain prescribed circumstances.
In terms of the new competitive flexible procedure, contracting authorities will largely be free to structure their processes however they see fit, subject to compliance with the new principles of public procurement set out in the Bill.
Additionally, the Bill sets out certain characteristics which will need to be adhered to in the design of a competitive flexible procedure, including:
- the process must be a proportionate means to award the contract (considering nature, complexity and cost);
- the process may limit numbers of participants (generally or per round);
- the process may allow for award criteria to be refined; and
- bidders who did not participate in (or who were excluded from) an earlier round in the process must be prohibited from participation.
Further guidance is anticipated on the competitive flexible procedure (including example procedures), but we anticipate that this may be of particular interest to contracting authorities who are keen to adopt a lean negotiated process.
As a quid pro quo for the additional flexibility set out above, contracting authorities are expected to comply with enhanced transparency obligations throughout the procurement process, and into the duration of public contracts awarded. Notably, the number of mandatory notices relating to tendering exercises and contracts awarded has significantly increased, and there are several voluntary notices that contracting authorities will also have an option to publish in various circumstances.
|Notice||Compulsory / Voluntary|
|Planning and Pipeline Notice||Compulsory for contracting authorities who consider that they will pay more than £100m under relevant contracts in the coming financial year|
|Planned Procurement Notice||Voluntary – equivalent of a PIN (although not used as a means to call for competition)|
|Preliminary Market Engagement Notice||Voluntary – sets out intention to carry out pre-market engagement|
|Tender Notice||Compulsory where a contracting authority intends to award a public contract under clause 18|
|Contract Award Notice||Compulsory before entering into a public contract – sets out intention to enter into contract|
|Contract Details Notice||Compulsory – sets out that a contract has been entered into|
|Contract Change Notice||Compulsory – must publish before modifying an existing public contract (except in prescribed circumstances)|
|Contract Termination Notice||Compulsory – must publish within 30 days of termination (including termination by a party, discharge, expiry, recission and set aside by court order)|
|Dynamic Market Notices||Compulsory where a dynamic market is to be established|
|Transparency Notice||Compulsory where there is a direct award under clause 40 or clause 42|
|Payments Compliance Notices||Compulsory – must publish payment compliance information every 6 months in respect of prescribed values, and confirm compliance with prompt payment provisions|
|Below Threshold Tender Notice||Compulsory where a contracting authority intends to advertise for the purpose of inviting tenders for a below threshold procurement|
It is clear from the above that contracting authorities will need to quickly get to grips with the new processes and publication requirements set out in the Bill, and we would encourage contracting authorities to avail themselves of the future learning and development programme promised by the Cabinet Office in respect of the new regime.
For a more detailed consideration of the Bill and its key changes, we have published an Essential Guide to the Procurement Bill which can be found here.