In the run-up to Christmas last year, the Cabinet Office published its response to the consultation on its Green Paper, ‘Transforming Public Procurement’.
The response lays the foundation for the Procurement Bill – a single, uniform framework which will replace the Public Contracts Regulations 2015 (‘PCRs’), the Concessions Contracts Regulations 2016 (‘CCRs’), the Utilities Contracts Regulations 2016 (‘UCRs’), and the Defence and Security Public Contracts Regulations 2011 (‘DSPCRs’), and will overhaul UK public procurement law.
The planned changes go as far as the Green Paper’s title implies and aim to achieve an expedited, simpler procurement process which will facilitate better opportunities for SMEs, charities and social enterprises. In this article, we reflect on the government’s response to the consultation and explain some of the most important points, along with the next steps for enacting the reforms.
If these changes will affect you, we strongly recommend that you read the response to the Green Paper in full.
A new one-stop-shop regulatory framework
Firstly, the government reported that a majority of respondents supported the proposal to simplify the PCRs, CCRs, UCRs, and DSPCRs into a single, uniform regulatory framework. This is intended to relieve suppliers of some of the bureaucratic obstacles that hinder the current procurement process.
Some respondents operating under the UCRs and DSPCRs were concerned that a single framework would compromise the flexibility and security afforded by the current regulations. Accordingly, the government states that it will make sure that the flexibility of the UCRs is retained, particularly in areas where organisations compete with the private sector. It will consult with the Ministry of Defence and include a number of exemptions to ensure the security implications for contracts let under the DSPCRs are taken into account.
Retention of the Light Touch Regime
The Green Paper had proposed the removal of the Light Touch Regime. Coupled with the proposed lowering of contract value thresholds, this would considerably increase the number of contracts subject to the full procurement regime and result in a strain on resources for many organisations. It would also remove necessary flexibility in areas such as care provision or special education, where an element of ‘service user choice’ is provided for by separate legislation.
In light of this, the government plans on retaining the Light Touch Regime, but will improve its scope and application.
A new, clearer exclusions framework
It was reported that all stakeholder groups expressed concerns about the rules governing the exclusion of suppliers for fraud, corruption or poor performance. The current system was described as being overly complex; the scope of some exclusion grounds is ambiguous, and the process/purpose of self-declarations and self-cleaning are confusing. This was particularly the case for contracting authorities who must consider exclusions on a case-by-case basis.
To resolve this, a new exclusions framework will be introduced which will be “simpler, clearer and more focused on suppliers who pose an unacceptable risk to effective competition for contracts, reliable delivery, and protection of the public, the environment, public funds, national security interests or the rights of employees”.
Proportionate transparency requirements
The response stated that, while the focus on increasing transparency was largely supported, some stakeholders raised concerns about the burden this could potentially place on contracting authorities. It could also make an already cumbersome process much slower. With this in mind, transparency requirements will be kept proportionate to the relevant procurements and simple to put in place.
The government made clear, however, that this will not dilute the importance of transparency as a fundamental principle of the new procurement regime. Contracting authorities will be required to adhere to certain publication obligations throughout the lifecycle of a contract, such as new ‘Contract Implementation Notices’ which will effectively introduce KPIs and contract performance measures.
No cap for successful challengers
Controversially, the Green Paper had proposed a cap on the level of damages available to bidders who successfully challenge a contract award decision. This attracted mixed feedback from respondents and the proposal has now been dropped.
Instead, the government intends for other measures to be introduced aimed at resolving disputes faster which, in turn, ought to reduce the need to pay compensatory damages to losing bidders once the contract in question has been signed.
Next steps
The Queen’s Speech in May last year announced that legislation to implement the planned reforms would be brought forward when Parliamentary time allows. While it is not possible to confirm exactly when the new framework will come into force, six months’ notice of “go-live” will be given once the legislation has been drawn up. In all likelihood, the new regime will not come into effect until 2023 at the earliest.
It is now clear that UK public procurement law will be overhauled in the near future. While most of the changes will no doubt be welcomed by those working in public procurement, adapting to the new regime will demand a behaviour change within such organisations, and not merely a knowledge transfer.
However, it remains to be seen how many of the planned reforms actually materialise in legislation and precisely what level of support, learning and development will be available to contracting authorities as they grapple with the new regime. We will continue to pay close attention to the progress of these reforms and will be on hand to support our clients throughout the process.
For more information on the topic please contact Bryony Ford or another member of our Procurement team.
