The Procurement Act 2023 (the Act) will demand more transparency from contracting authorities at all stages of a procurement process.
Here, Michael Winder and Samantha Thompson explore how the Act’s objectives will replace existing procurement principles and what this means for contracting authorities.
The current procurement principles
The Public Contract Regulations 2015 (PCR 2015) include overriding principles that require contracting authorities conducting a procurement process to:
- treat bidders equally and without discrimination
- act transparently
- act in a proportionate manner.
Although not a ‘principle’, contracting authorities are also required to avoid designing procurements in a way that artificially narrows competition or intentionally excludes the procurement from the scope of PCR 2015.
Analysing the Procurement Act 2023 objectives — Section 12
Section 12 of the new Act sets out several objectives for ‘covered procurements’.
Section 12 (1)
A contracting authority must have regard to:
- delivering value for money
- maximising public benefit
- sharing information to allow suppliers and others to understand the authority’s procurement policies and decisions
- acting and being seen to act with integrity.
Section 12 (2)
Contracting authorities must treat suppliers equally unless there is a difference between the suppliers that justifies different treatment. If this is the case, the authority must take all reasonable steps to ensure that it doesn’t put a supplier at an unfair advantage or disadvantage. In effect, this replicates the old principle of equal treatment and non-discrimination.
Section 12 (4)
Contracting authorities must have regard to the fact that small and medium-sized enterprises may face particular barriers to participation and consider how these barriers can be removed or reduced.
Transparency as an overarching theme
Contracting authorities should be aware of a key change in the Act with regard to how transparency is treated. There is no direct replacement in the objectives for the principle of transparency. Instead, transparency has become an overarching and recurring theme that runs through the entire Act.
There is an increased requirement for transparency at all stages — for example, there is a requirement to publish a wider range of notices on the digital platform and to provide information to the outside world.
Although transparency isn’t included as a specific objective in the Act, there is a significant move towards greater ongoing transparency throughout the lifespan of every procurement from the conception of the need to procure a contract, through the procurement phase and on until the expiry of the resultant contract.
Addressing proportionality
Likewise, there is no longer a specific duty towards proportionality. However, it too is woven into individual obligations at key points.
For example, in section 20 the contracting authority must ensure that its chosen competitive tendering procedure is proportionate as a means of awarding the contract by having regard to the nature, complexity and cost of the contract. A further example is in section 23, where the award criteria used to assess tenders must also be proportionate in the same way.
How language choices impact contracting authorities
The notable difference between the current principles and the objectives under the Act is the language used.
As noted above, the objectives apply to a ‘covered procurement’ — defined in the Act as not only covering the procurement process itself but also the entry into the resultant contract and the management of it during its life. Accordingly, the objectives will not only apply to the award of contracts but also to the entry into and management of the contract — a much wider and ongoing application in comparison to the current principles under PCR 2015.
Notably, section 12 (1) and section 12 (4) require contracting authorities to ‘have regard to’ certain objectives which is looser than the present regulations. Case law demonstrates that ‘having regard to’ something does not equate to a requirement to comply with it. Instead, the contracting authority must consider the objectives but can ultimately decide how much weight it affords to them. However, it must have clear reasons for any decisions and be prepared to provide them.
In contrast, the requirement in section 12 (2) places a greater obligation on contracting authorities than current regulations by saying that they must treat suppliers equally unless there is a justification to do otherwise.
The Act makes consideration of the objectives a legally enforceable requirement. To minimise the risk of a challenge, the contracting authority needs to be able to articulate any such decisions to bidders clearly and appropriately and ensure that the decision-making process is well-thought-out and properly documented.
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Ahead of the Act coming into force in October, our procurement law team will continue to share insights into how it differs from current regulations. Follow us on X and LinkedIn for our next update.
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