Further to our previous article, we explore in more detail below some of the key proposals set out in the Green Paper ‘Transforming public procurement’ which was published at the end of 2020. The deadline for responding to the Government on its proposals is the 10th March 2021.
As referred to in our previous article, the Green Paper proposes to enshrine in law the following as governing principles of public procurement: value for money, the public good, transparency, integrity, efficiency, fair treatment of suppliers and non-discrimination. The Green Paper also proposes to amalgamate the four separate regulations that are currently in place for public contracts, utilities, concession contracts and defence and security contacts and replace them with one set of rules that will apply to all types of public procurement covered by the previous regulations and condense the current seven procurement procedures into three procedures.
Framework Agreements
One area that is likely to be of particular interest to many contracting authorities are the proposed changes to framework agreements. Framework agreements are widely used by contracting authorities and allow contracting authorities to procure under centralised purchasing arrangements. Under the current Public Contracts Regulations, frameworks are limited to 4 years in duration but under the Utilities Contracts Regulations (UCR), they can be put in place for up to 8 years and under the Defence and Security Public Contracts Regulations (DSPCR) for up to 7 years. The new proposals provide an equivalent to the existing 4 year framework referred to as a closed framework where no further suppliers are permitted to join the framework after the initial competition but also set out an open framework arrangement which will have a maximum duration of 8 years provided that it remains open for new suppliers to join at specific times. However, the proposals envisage the closed part of the framework operating for only 3 years. This does raise a number of issues in relation to how the competition would be run in the later years, whether the requirement to run further competitions in the later years would undermine the efficiency gains of frameworks and whether existing framework members could potentially lose their place to new suppliers under the framework. Also, if there is to be only one set of rules, utilities and contracting authorities who procure under the UCR or DSPCR would lose their ability to procure longer ‘closed’ framework agreements.
Greater transparency
The Green Paper wishes to embed transparency by default through the lifecycle of procurement from the planning stage through to contract award, performance and completion of the contract. It includes proposals to introduce a common data model for all contracting authorities in line with the Open Contracting Data Standard (an internationally recognised standard which describes how to publish data and documents at all stages of the contracting process) and to join up the existing plethora of systems to enable all public contract information to be available from one central platform. Changes are also proposed to the content of standstill notices to reflect the greater availability of information during the procurement exercise.
Perhaps learning some lessons from the procurement of PPE and other key contracts in response to COVID, the Green Paper also proposes to introduce a new ground of ‘crisis’ for when contracting authorities are procuring in the most serious of situations with additional safeguards for transparency and use whilst allowing contracting authorities to fast track procurement and ensure there remains competition rather than direct award.
Proposals include introducing a new requirement to publish contract amendment notices and making it mandatory to publish a contract notice when a decision is made to use the limited tendering procedure.
Challenges and Remedies
Another area where the Green Paper proposes significant reform is in relation to bringing a legal challenge against a procurement award and the remedies available. The Green Paper identifies that procurement challenges are both expensive (sometimes prohibitively so), complex and take a great deal of time. Options that the Green Paper proposes for consideration include:
- introducing a fast track system that can be tailored to the individual challenge, for example, considering the urgency of the need to award the contract, the value of the claim, the stage of the procurement when the alleged breach took place or whether the challenge is on a point of law where the facts are not in dispute;
- reviewing certain types of claims on the basis of written pleadings only;
- providing clear rules for disclosure on difference types of challenges and through the transparency requirements providing more information upfront;
- using the Technology and Construction Court’s District Registries outside of London in order to free up capacity to be able to list all hearings more quickly;
- introducing a tribunal system to hear procurement challenges in a faster and cheaper manner allowing for example low value claims or challenges to be heard.
The Green Paper also proposes replacing the current test that is applied when lifting automatic suspensions with a new test which balances the public interest, urgency, upholding of the regulations and the impact on the winning bidder against the right for the claimant to be able to participate in the contract and the alternative available remedies.
One proposal that will be the subject of much debate is to cap the level of damages that can be awarded for breaches of the procurement rules to legal fees plus 1.5 x bid costs (although the Green Paper does note some exemptions where an element of lost profit may also be appropriate). Damages are currently awarded taking into account legal fees, bid costs and an element of lost profit. There are many factors to consider, on the one side discouraging speculative challenges that prevent contracting authorities from continuing with properly procured contracts or discouraging innovation and on the other hand, any remedies including damages must act as a sufficient deterrent to ensure proper procurement practice by contracting authorities. Any view on this proposal surely reflects our own view and experience of the effectiveness of the current regime.
It is not possible to cover all of the proposals set out in the Green Paper in a short note such as this but if you would like further details of the proposals or would like to discuss any public procurement law issues, please contact Victoria Trigwell or one of our Procurement Team.
