An overview of the Procurement Bill

In this article Andreas Petrou and Michael Winder from the Procurement team provide a more detailed overview of the key points included in the Procurement Bill, following the team’s previous update in January. 

1. When will it come into force?

The Bill is currently at the Report Stage in the House of Commons and is intended to come into force some time in 2023. The Bill has a six month run-in period. The government has said that the run-in period will not commence until secondary legislation, which will put meat on the bones for some aspects of the Bill, has been consulted upon and laid before Parliament. This means it is now likely that it will be early next year before the Bill is in effect.

2. Where does the Bill apply?

On the whole, the provisions of the Bill apply equally to England, Wales and Northern Ireland. Scotland will retain its own procurement regulations in relation to its devolved authorities.

3. A simpler procurement framework – which contracts does the Bill apply to?

The current framework for the UK, the majority of which having been derived from EU law, consists of a number of regulations.

The Bill aims to introduce a simpler and more transparent system, repealing all existing regulations in favour of a single framework (subject to some differences for procurement of defence and security, concession, utilities and light touch regime contracts being maintained). It will cover contracts awarded by most central government departments (and their arm’s length bodies) and the wider public sector (e.g. health authorities, local government), contracts awarded by utilities companies, frameworks and concession contracts (that have estimated values above relevant thresholds, and that are not exempted contracts).

4. The Bill’s principles and objectives – what’s changed?

Under the Bill, contracting authorities must have regard for the importance of delivering value for money, maximising public benefit, transparency, and acting with integrity. Whilst similar, these objectives do not completely replicate the principles under existing legislation (though for instance, proportionality is included elsewhere in the Bill). Subject to certain exceptions, contracting authorities must also have regard for any national procurement policy statement published which sets out the government’s strategic prime concerns relating to procurement.

5. Undertaking a procurement – how do the new rules apply?

With regards to the procurement itself, the Bill requires contracting authorities follow an open competitive tendering procedure or a competitive tendering procedure which is designed in a way that the contracting authority considers appropriate.

The latter option allows a contracting authority to design a competition to reflect the particular requirements of the contract and/or target market and is the first time that such flexibility is available generally rather than in limited circumstances (such as the current ‘light touch regime’ for social care, health, legal and education services).

Following a competitive tendering procedure, a contracting authority will be able to make an award to a supplier that submits the most advantageous tender, which is a tender that satisfies the contracting authority’s requirements and best satisfies the award criteria. This evaluation method is a little wider than that under the Public Contract Regulations 2015, which instead refers to the most economically advantageous tender. Other procurement routes include frameworks (now available in ‘open’ and ‘closed’ varieties) and direct award, albeit direct award is subject to greater transparency requirements. Financial concerns may no longer be as key to the award of a contract.

6. Transparency – cards on the table…

Transparency is high on the government’s agenda. The Bill promotes greater transparency at various stages throughout the life cycle of the procurement process. There are various instances where publication of certain notices and/or information is required which go beyond the existing legislation. Two key examples are:

1. a contracting authority must publish a contract award notice setting out its intention to enter into a contract before entering into a public contract (as opposed to after entry, which is the case currently); and
2. where the intention is to issue a direct award, other than in specific circumstances, a contracting authority must publish a transparency notice confirming that intention before it makes the direct award.

7. Excluding suppliers and the new ‘Debarment List’

As under the existing regime (other than a change in terminology), potential suppliers can be excluded from a procurement on the basis of mandatory or discretionary exclusion grounds applying to that supplier (or associated suppliers), subject to the opportunity to appeal.

A new development under the Bill is that a supplier may be entered onto a debarment list by a government minister, where the minister has investigated the supplier and is satisfied that the supplier is an excluded (or excludable), supplier. A supplier on the debarment list is excluded from all public procurements for the period that they are on the list. There are mechanisms for relief and challenge for suppliers, but this is a key risk for suppliers.

At the same time, there is a wider ability for authorities to exclude a supplier for 'sufficiently serious’ breaches of contract. All in all, bigger risks for suppliers and better abilities for authorities to reject poor performing suppliers.

8. Remedies – when it all goes wrong

Subject to exclusions, the Bill generally provides that contracting authorities’ obligations are enforceable in civil proceedings, and accordingly (and as per the existing regime), proceedings can be brought by suppliers at risk of suffering, or who have suffered, loss as a result of a contracting authorities’ breach.

The standstill period has moved from 10 calendar days to eight working days, which will have an impact on calculating the length of any standstill, and the automatic suspension will now only apply if proceedings are brought within the standstill period. This is a tightening of existing law. Remedies following entry into a contract again broadly follow existing law, though there is some change in terminology and the set-aside remedy, which replaces the declaration of ineffectiveness, is drawn wider, which may have an effect on decision making going forward.  

9. Oversight of the procurement process

The Bill introduces a new statutory oversight regime (replacing existing powers for investigation under the Small Business, Enterprise and Employment Act 2015), providing for potential investigation of the contracting authority’s compliance with the Bill by an appropriate authority, who can request documents and assistance reasonably required in connection with the investigation, and may publish the investigation results together with any recommendations made to the contracting authority.

The highlights above are intended to provide an overview of the main aspects of the Bill. The draft legislation itself is much more detailed.

We will continue to keep a close eye on the Bill’s progress through Parliament ahead of it coming into force, with more in-depth articles on specific aspects over the coming months.

In the meantime, if you have any questions at all about the Bill, or public procurement law generally, please do feel free to get in touch with us.