A year on from the Procurement Act 2023 (the Act) coming into force, it has well and truly begun its process of bedding in. Many contracting authorities have now come full circle in the procurement lifecycle having advertised opportunities, considered the tenders and awarded contracts under the new regime.

At the tail end of that procurement lifecycle, contracting authorities are getting to grips with the requirements of the new publication scheme, and the consequences of non-compliance with the Act are now being tested out on a procurement-by-procurement basis.

But what about more significant issues that might arise in the way that procurements are being run? How will those be dealt with under the Act? This is where the Procurement Compliance Service (PCS) comes into play, a specialist function within the overarching Procurement Review Unit (PRU), tasked with overseeing compliance with the Act.

What is the PCS?

The PCS is designed to "improve the capability and practices of contracting authorities for the benefit of all involved in public procurement by ensuring compliance with the new procurement rules". In practice, this means that the PCS has the power to investigate whether contracting authorities are complying with Act and, if appropriate, to issue recommendations or provide guidance to assist with compliance.

However, the PCS is not set up to consider complaints arising out specific procurements: that falls within the remit of the Public Procurement Review Service (PPRS), which also sits within the broader PRU. Instead, the focus of the PCS will be on identifying broader patterns of non-compliance within the sector.

Whilst the Act doesn’t limit the scope of PCS investigations, it will have a clear focus on:

• Systemic breaches, namely those actual or potential breaches that are common across a number of contracting authorities; and

• Institutional breaches, namely those breaches that are regularly occurring within one particular authority.

When will the PCS investigate?

Rather than being limited to the scope of particular complaint, the PCS may commence an investigation when it becomes aware of potential non compliance through a range of sources including:

• referrals from stakeholders;
• information from the PPRS; or
• data from the Central Digital Platform.

Once a referral is made or non-compliance is highlighted, the PCS will consider whether the issue ought to be accepted for investigation.

It will consider whether the issue raised concerns a procurement and contracting authority covered by the scope of the Act, whether the issues are ones that touch upon systemic or institutional non-compliance, and whether there are any other reasons to support this kind of investigation.

If a concern is not taken forward to an investigation, the details will still be logged, and any further information that comes to light may lead to the issue being reconsidered for investigation.

However, if legal proceedings have already been commenced (which includes issuing a pre-action letter), or if the issue is subject to an internal appeals process, the PCS will not investigate. The PCS is clear that it cannot provide assurance to contracting authorities on active procurement processes, nor can it be used as a stepping stone to legal action, or to seek compensation.

How will an investigation work?

Once an investigation is opened, the PCS has the power under s.108 of the Act to require a contracting authority to provide documents and assistance. The PCS will request this by way of a formal notice, which will include timescales for compliance of no less than 30days.

An investigation will involve a review of relevant documents, discussions with the relevant individuals within the contracting authority, and may also require input from the Government Commercial Function and Senior Civil Service personnel either in respect of the investigation itself or in the making of recommendations for future compliance.

At the conclusion of the investigation a report containing the PCS' findings and recommendations will be issued to the contracting authority and may also be published online.

Where recommendations are made, under s.109 of the Act, the contracting authority will be required to have regard to those and may be asked to submit a progress report setting out what action has been taken as a result of the recommendations. These progress reports may also be published by the PCS.

Under s.110, broader guidance may also be published for the benefit of contracting authorities generally to consider by way of lessons learned.

Why this matters

Whilst the PPRS and litigation will continue to consider allegations of breach on a case-by-case basis, the PCS has powers to investigate and importantly, to make public decisions and recommendations, about more significant or sector-wide areas of non-compliance.

With the Act increasing transparency requirements to be embedded within the procurement lifecycle, it is clear that the PCS is honed in on raising standards within the procurement sector generally.  Whether systemic or institutional breaches are caused by capability gaps, legacy processes or misunderstanding of the new legislation, the PCS will work to identify root causes and publicly drive improvement across the sector.