The Procurement Act 2023 & Frameworks

The Procurement Act 2023

Frameworks, are they really worth it?

You may be hearing a lot about the new Procurement Act 2023 but what is it and when does it take effect?

You will be glad to hear that if you missed this change in public procurement, it is not active yet. But it won’t be much longer before it will. October 28 this year in fact.

So why is it important and what will it do for public procurement and bidding, my area of expertise.

To put it simply, it is replacing 4 earlier acts with a single act that is simplified and more flexible. The routes for procuring have arguably been reduced to:

• Direct Award
• Open Frameworks
• Dynamic Markets, and
• Competitive Flexible Procedure, bespoke procurement that can involve negotiation

Here are some of the highlights

We will be able to have more pre-market engagement. For those that don’t have Business Development teams, this comes under the Capture activity done way before the procurement comes to market. Only now contracting authorities and suppliers will be encouraged to make the most of this engagement.

There will be a Central digital platform where all public procurement opportunities will be published. This includes forewarning the market of upcoming opportunities and those coming to their end. How many times have bidders requested this consolidation of public procurement only to have to search different portals and sources to get a single view. Well, what we asked for is promised.

The Central digital platform will also provide a one-time registration and entry of core supplier details. These can be used across more than one bid and providing the information doesn’t change, will reduce the administrative burden associated with registration.

The new act emphasis fair treatment of suppliers through the execution of equal competition. Transparency will, we are promised, give us assurance.

The act promotes innovation providing procurement routes to assist startups, scaleups and Small, Medium Enterprises, SMEs.

New prompt payment improvements, through the whole supply chain are included to ensure everyone gets paid quickly.

There are provisions for better feedback and debriefs, with standardised information to give bidders a better understanding of why they were evaluated in that way and importantly what they need to do to improve. This to me is a great step forward.

And finally, there are greater exclusions for underperformance on other public contracts. Again something that used to appear to make a mockery of suppliers that don’t perform being able to win more public sector contracts. We will have to see how this pans out but it is a great inclusion.

Some points around the development of the new act.

Aims

It aims to be more flexible enabling small companies to be included. It brings in the opportunity to involve new technologies from startups and scaleups. All of which would usually be excluded because they didn’t have the accounts required or their insurance provision was way too low. You won’t escape these hurdles but you will be able to defer the solution until after the competition and before Contract Award.

The Act also encompasses greater transparency from the advanced warning of procurement opportunities through to the feedback given to bidders on their submissions. The first enables supplies to prepare. The latter enables us to get better at bidding. You may just need a Bid Expert to interpret the feedback and implement improvements, but I would say that wouldn’t I?

The act makes procurement more efficient, simplifying the procurement routes, and provides for a competitive environment for all supplier that can deliver the requirement.

Objectives

The objectives as before are to deliver value for money but where as the winning bidder had to be the Most Economically Advantageous Tender MEAT, the evaluation is now for the Most Advantageous tender or MAT. It is argued that this now moves away from “cheapest” to overall advantageous. We will see as price will always play a part in public procurement. I will add though that the increased emphasis on Social Value will drive towards contracts being evaluated for their overall public benefit and will include impacts on local economy, environment and society. A new aspect that may offer opportunity to suppliers to differentiate themselves from others.

The Act has recognised the importance of SMEs and VCSEs in potential solutions. They are likely local to where the contract is delivered, have a considerable impact on the locale, local economy and society. But they were previously excluded for instance, on financial or insurance grounds. Maybe they didn’t have the corporate back-office functions or certifications. These have now been set aside and do not form a Pass Fail at the qualification phase. They will have to provide a robust explanation of how they will be accommodated and be in place at Contract Award but for now they are not excluded. This is aimed at encouraging startups and scaleups who are at the forefront of technological innovation in the market who could disrupt a service provision and shake up the way we do things.

Open Frameworks

Here I am going to look at Open Frameworks or put more simply Frameworks and why you should be getting ready to join the supplier list and take advantage of this new procurement environment.

Frameworks are contracts between a Contracting Authority and one or more suppliers. They outline future provision of product, goods and/or services. They have an agreed set of terms and conditions for any call off contracts, with a declared basis on which an award will be made. Once on the framework the procuring authority can call-off goods and services avoiding a protracted procurement as the suppliers on the framework have already qualified and provided evidence that they can meet the requirement. In some cases, this can be a direct award but in most there is usually a further mini competition to determine a winner. The authority may want to ask questions relating to geography or levels of service and may include information specific to their needs.

The benefit of the new Open Framework is that there are opportunities to re-open the procurement to introduce new suppliers. This is an improvement on previous procurement as you are not frozen out of the framework for extended periods. It also encourages newly formed suppliers to join existing frameworks, when invited. As a supplier already on the framework you may not see this as advantageous but for those who are not on it, it provides another opportunity. It also accommodates advances in technology and new innovations to be considered.

So, what are the Advantages to suppliers of being on a framework?

They provide a degree pf predictability as there is potentially a steady stream of contracts that can flow from a framework. The involvement of multiple contracting authorities gives suppliers access to a greater potential opportunity value. The procurement process is streamlined, and suppliers will feel the benefits of this as will the contracting authorities.

Procurement is sped up as the prequalification has already been done. Terms and Conditions are agreed, although there may be room to accommodate small changes. Bid response time may be simplified and swifter, but this will depend on the complexity of the requirement.

As a supplier you are in a smaller pool of qualified suppliers in front of a large group of contracting authorities. When an authority comes to market for a call-off, they are qualified prospects as they know what they are procuring and the agreements that are already in place in principle. You may have provided some example pricing or a pricing methodology that has been assessed as delivering value for money. Overall frameworks offer a reduced administrative burden for both procurer and suppliers. This is a principle underlying frameworks but there will be time when it is not delivered.

So, what are the disadvantages?

To get on the framework there will potentially be intense competition. You need to know who will bid from your competitor analysis and how many places there are on the framework, either form the published information or from your capture activities in advance.

You may find them to be inflexible, having to adhere to the agreed terms. You may not be able to make changes to the contract or the call off contract. If you have any red lines in these, you will have to seriously consider whether you bid or not. Once on a framework if pricing has been provided you may not be able to make changes as a result of hikes in material or labour costs. When a call off is notified and you are invited to bid, you do however, retain the option not to.

When you get on to a framework, you must decide if there will be any usage of it by contracting authorities. There are seldom any guaranteed throughputs on frameworks and it is entirely possible for no call offs to be placed through a framework. Again, your capture activity should inform you of what is likely and it is your risk whether you pursue the bid. Some frameworks can be dominated by well-known suppliers which can deter smaller suppliers from competing. Again, your competitor analysis should inform you of the risk.

Bidding Process

So, we have covered a lot, but we must come to the effort you need when bidding to get onto a framework. It is a process of two parts. First get on the framework by successfully bidding and then bidding for call off contracts as they arise, or you are invited. Yes, two bids to prepare, write, cost and submit. It is a lot of work, but you are accessing a public sector market spend of ￡393bn in 2022/23. Not all will be frameworks, but a large number will.

And remember, if you want to take part you have to be on the framework.

Preparation

So, you are interested, and you want to be ready for the launch. What do you need to do?

Stay informed and updated. There are online training and knowledge drops provided. Be aware of what is happening in the roll-out and when it is due to occur.

Register with the Central Digital Platform as soon as you can. Here you can set up core information that can be used across multiple bids. You will also be able to access opportunities in one place, making development of your pipeline easier. Although you will need to be more robust with your pursuit and bid decisions, otherwise you will be a busy fool and potentially not win anything. Apply good bid practice, that I can help you with, to make sure you have a high win rate.

Familiarise yourself with the bid processes and changes implemented in the new act. Above all this is the time to demonstrate to procurers that you are prepared for the changes and ready to support their procurement activities.

I encourage you to explore the other commercial routes including Competitive Flexible Procedure, Dynamic Markets and Direct Award. You may prefer one of these to a framework. It is your decision.

Prepare for prompt payment provisions. This extends through your supply chain and encourages swift funds flow through the economy because of public procurement. You need to ensure that your policies, procedures and systems are able to support this, otherwise you may find yourself failing a performance indicator.

Within the Procurement Act there are stronger exclusion provisions including for conflict of interest and underperformance on other public sector contracts. It is worth noting that because underperformance can exclude you from future competitions, when agreeing performance targets, you must know that they are achievable.

And finally work with procurers. If you are a SME or Startup or Scaleup engage to discuss what the barriers to your competing are and make sure they are addressed. If this isn’t an issue for you, you still need to work with procurers to execute you capture activities and gain insight into what the requirement is and possibly to help shape the procurement that comes to market.

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Rob Dustan, Business Development Director, WestHaze Limited

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