As the Procurement Bill (the Bill) makes its way through Parliament, the Government has begun publishing guidance and associated documents setting out how the new regime will work in practice. As part of this supplemental information, in January 2023 the Government published information setting out the benefits of the Bill for prospective suppliers to the public sector.
Of note, the guidance highlights that the Bill places a duty on contracting authorities to have regard to the barriers that SMEs often need to overcome, and what can be done to help them access public sector opportunities throughout the whole procurement process. This includes considering whether requirements remain proportionate to the contract, whether timescales set out for the procurement are realistic (i.e. will smaller organisations without bid teams be able to participate in the procurement), and whether any pre-market engagement activity has a diverse range of representation. The message is clear – contracting authorities should be considering whether their procurement activity is a bar to new entrants and smaller suppliers at every stage of the procurement, and this chimes with the earlier policy objectives set out in the National Procurement Policy Statement (NPPS) around improving supplier diversity, innovation and resilience.
The guidance sets out seven key benefits of the procurement reform proposals for prospective suppliers:
- Commercial Pipelines
Under the Bill, contracting authorities who anticipate that their annual spend over the coming financial year will exceed £100 million will be required to publish Pipeline Notices. A Pipeline Notice will need to set out details of any anticipated contract with a value exceeding £2 million in the 18 months following the start of the financial year.
The guidance highlights that this visibility of upcoming major contracts will allow suppliers more time to "gear up" for the procurement, ensuring that they are well placed to deliver such opportunities (either as a prime contractor, or as members of a consortium or sub-contractors in a supply chain). This will also allow potential bidders to manage resource and prepare business plans, giving them more time to plan and prepare for upcoming public sector contracts. - Preliminary market engagement
The guidance recognises that pre-market engagement is often approached with caution from contracting authorities and sets out how the Bill intends to facilitate pre-market engagement with clear rules around its use, and the introduction of a specific Preliminary Market Engagement Notice. Such market engagement should be encouraged, and it is hoped that the Bill will make it easier for contracting authorities to confidently engage with a diverse range of market players (including new entrants, SMEs and VCSEs) to encourage innovation in their procurement activity. - Invitation to Tender
As a more practical aspect for potential suppliers, the guidance indicates that there will be an option to set up email search notifications so that they are informed of new (above threshold) opportunities of interest. The guidance refers to a "centralised platform" for the publication of tender notices – although silent on the specific details, presumably this will be the existing Find a Tender Service or an equivalent platform. - Supplier registration and bidding
The guidance highlights the "tell us once" approach to supplier registration, which is intended to help reduce the administrative burden that suppliers might currently face in accessing numerous platforms across the public sector (for example, the different platforms for NHS, local authorities, housing associations and universities). This should be a particular benefit for smaller suppliers to the public sector, as it should be clearly signposted what information needs to be kept up-to-date, and where they will need to sign up for different opportunities, with their centrally held information integrated across numerous public sector portals for ease of access.
The Bill also seeks to ensure that financial barriers do not prevent smaller businesses from participating in procurements, including:
- prohibiting only audited accounts as a test of economic and financial standing (unless required under the Companies Act 2006); and
- requiring insurances related to contract performance to be in place ahead of contract award.
This will ensure that SMEs and start-ups are able to access procurement activity (where they may otherwise have been precluded from participation as they are not required to file audited accounts) and will reduce costs of participation in procurement activity as a commitment to obtaining relevant insurances will be sufficient to meet the insurance requirements ahead of contract award. - Procurement processes and tools
Finally, the guidance recognises that the new Competitive Flexible Procedure will be beneficial in allowing contracting authorities to design project specific procedures. In particular, it is hoped that this will allow contracting authorities to encourage new specialist market entrants to participate in opportunities for complex, high-tech and innovative solutions.
The guidance also recognises the benefits of commercial purchasing tools such as frameworks, open frameworks and dynamic markets, and emphasises the ability for contracting authorities to structure their commercial purchasing tools in a way that will not "lock out" new market entrants during the life of that purchasing tool (for example, the ability to establish an open framework with different access points, or a dynamic market would be beneficial to new entrants – particularly in areas with fast developing or innovative solutions). - Feedback if bid is not successful
Under the Bill, contracting authorities will be required to provide assessment summaries to unsuccessful bidders, clearly setting out how their bid compared to the successful bid. It is hoped that this change in approach to feedback will be beneficial for SMEs and VCSEs in particular to allow them to identify the areas of their proposals might benefit from improvement for future opportunities. The exact details of what must be provided in an assessment summary remains unknown, and we anticipate further guidance on what prospective suppliers can expect to receive in way of feedback. - Contract management
Finally, the guidance recognises that the Bill will benefit smaller suppliers throughout the procurement process and into the life of the contract, reiterating the requirement for thirty (30) day payment terms, and the obligation for these terms to be flowed down into the supply chain. This reflects the requirements already in place under the existing rules and, as with the Public Contracts Regulations 2015, where the terms are not included as an express term of the contract, the requirement for 30 day payment terms will apply nonetheless. This should serve as a reminder of the requirement for prompt payment of invoices and should provide smaller suppliers with increased certainty over their cash flow.
What next for potential suppliers?
There are clear benefits to be grasped by suppliers in the Bill, who should start to prepare themselves now for the upcoming changes to the public procurement regime. Suppliers should acquaint themselves with the new language of the Bill, including the changes to familiar phrases (such as "Contract Notices" to "Tender Notices", "Dynamic Purchasing Systems" to "Dynamic Markets" etc.).
Additionally, suppliers should start to prepare themselves now for the changes in procedures that are likely to follow the introduction of the Competitive Flexible Procedure, as procurement processes may now look very different to those that we are currently accustomed to. Time spent now familiarising oneself with the changes to the regime and anticipated notices will allow potential suppliers to hit the ground running when the new rules are fully in force.
