The New Procurement Bill

The Government has stated that the Procurement Bill will streamline the existing public sector procurement regulations and provide a more flexible system for Contracting Authorities. The bill is yet to be finalised and there may be further changes to come. However, here’s a short guide to some of the key changes:

All ‘four’ one and one for all:

The Bill proposes to revoke the four sets of regulation (Public, Utilities, Concessions Contracts and Defence and Security) replacing them with a single set of regulations for all. We see this benefiting the industry by allowing for greater consistency and it ensures that procurement professionals can transfer procurement approaches between sectors more effectively.

New Objectives:

In carrying out a procurement, a contracting authority must have regard to the importance of

• delivering value for money
• maximising public benefit
• sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions
• acting and being seen to act, with integrity.

?In carrying out a procurement, a contracting authority must treat suppliers the same, unless a difference between the suppliers justifies different treatment.

These objectives are very similar to the principles of the previous legislation, which is not a great surprise.

Fewer procurement procedures:

The Bill reduces the multiple procurement procedures that existed in the previous sets of regulations, with only two procedures remaining. These are

• a single-stage tendering procedure without a restriction or
• a competitive tendering procedure as the contracting authority considers appropriate for the purpose of awarding the public contract.

This approach provides much greater flexibility when it comes to designing the procurement procedure and should be welcomed. However, it could also lead to unfair procurement procedures that may favour one competitor over another. Only time will tell if more flexibility equals better value for money.

Under Performing Suppliers:

The Bill proposes a new approach for the exclusion of suppliers that have serious misconduct, unacceptably poor performance, or other circumstances which make the supplier unfit to bid for public contracts. The new exclusion framework will also create a debarment register that will be accessible to all Contracting Authorities to use. This register will set out which companies should be excluded from contracts. This provides a greater incentive to public sector suppliers to perform; however, the effective use of a ‘blacklist’ for underperformance may not be well received by suppliers and therefore it remains to be seen whether this provision will have the desired effect.

Refurbishment of frameworks:

There are some significant changes to the framework provisions in the Bill, which include:

1. New ‘Open’ frameworks to be introduced; these are frameworks with a maximum duration of 8 years which will contain a minimum of 2 suppliers. The significant change here is that the framework can be opened during its term and new suppliers can bid for a place on the framework. There are also rules around when the framework can be opened to avoid a scenario whereby new suppliers are constantly joining.?It will be interesting to see how the market reacts to this approach. One school of thought is that it will help to refresh frameworks that are devoid of active suppliers but conversely some suppliers may get frustrated with the framework bid costs if they know they will need to retender for the framework and / or lose work to new suppliers in the near future.
2. Contracting Authorities will be required to publish more information relating to tender issued and contracts awarded under a framework. This provides a greater level of transparency and in our view is an improvement for bidding organisations.

?Procurement Challenges:

The Bill appears to be substantially like the old regulations. However, there are a few changes of note. The ability for a party claim for automatic suspension of a contract, which was previously allowed to be made at any point prior to which the contract is entered into, has now been limited to the standstill period. This may mean the standstill period becomes a more intensive period of clarification from unsuccessful bidders.

Improvements for SMEs:

The Bill will allow local authorities to ring-fence lower-value public contracts to SMEs, VCSEs or suppliers within their local area through?amending Section 17 of the Local Government Act 1988. This will allow local authorities to buy local and support the Social Value Act.

The use of Dynamic Purchasing Systems, under the revised name Dynamic Markets, will also continue to help Contracting Authorities buy goods, works and services using a SME friendly route. The Bill will also ‘enable the creation of a digital platform for suppliers to register their details once for use in any bids, while a central online transparency platform will allow suppliers to see all opportunities in one place. This will accelerate spending with SMEs.’ This all seems positive news for SMEs. Although, whilst the Bill is an enabler it still requires Contracting Authorities to think differently about how they make SMEs aware of opportunities, package works appropriately and create SME friendly competitions.

MEAT turns into MAT: The previous regulations required to the contract award criteria to be based on the Most Economically Advantageous Tender. In certain areas of the public sector, they felt that the term ‘Economic’ required them to establish evaluation criteria that focussed on rewarding the lowest price – which isn’t always the best value. The Bill removes the term Economically to allow Contracting Authorities to broaden the criteria they wish to award their tenders upon. We’re not convinced this change makes a significant difference to Contracting Authorities current approaches, nor was MEAT intended to mean the award criteria must consider lowest price, but it does provide useful context to those who may have been concerned.