We examine the direct award of public contracts and what has changed under the Procurement Act ahead of its implementation in October 2024.
Read moreMarch was a busy month in the world of public procurement law with a number of developments, both in respect of the operation of procurements under the current regime and the upcoming implementation of the new Procurement Act.
Here, Partner and commercial law expert Michael Winder considers the significance of these changes and what they mean for public procurement law practitioners.
Increased focus on sustainability and AI
The UK Government issued three procurement policy notes (PPNs) in March.
PPN 01/24 applies to all central government departments, their executive agencies and non-departmental bodies. It sets out a ‘carbon reduction contract schedule’ which contains a set of terms and conditions that can be used in government contracts alongside broader sustainability obligations where it’s appropriate to do so.
Likewise, PPN 02/24 also applies only to central government and related bodies. This PPN addresses suppliers’ use of artificial intelligence (AI) to develop their bids. The PPN recognises that while there are benefits to doing so there are also associated risks. The PPN notes that it’s essential to take steps to identify and manage those risks and opportunities within the procurement and in the resultant contract and directs in-scope organisations as to how to seek greater transparency around the use of AI.
New supplier selection questionnaire
Unlike the first two PPNs, PPN 03/24 applies to all contracting authorities in England, Wales and Northern Ireland.
PPN 03/24 provides a new standard selection questionnaire (SQ) — replacing the 2023 version (which, at the time, was the first update in over seven years). All contracting authorities must use this new version within three months of the date of publication (27 March 2024) but it can be used immediately if they so wish. This latest draft of the SQ has come about in response to feedback received following the issue of PPN 03/23, which contained the 2023 SQ.
Key changes include:
- updated payment related questions
- updated steel related questions
- clarity for contracting authorities considering bids from Russian/Belarusian suppliers — as set out in PPN 01/22
- removing references to PAS 91 which has now been withdrawn by the BSI
- formatting changes to assist and support the move to e-procurement platforms.
This seems to be evolution rather than revolution of the SQ. Of the three PPNs issued in March, this is the one that most practitioners will need to take note of and ensure that they either implement the SQ or ensure that their third-party provider for contract notices has implemented the changes.
Procurement Act 2023 — further developments
On the 25 March 2024 the Cabinet Office laid the draft Procurement Regulations 2024 (PR 2024) before Parliament. PR 2024 is intended to sit as subordinate legislation to the Procurement Act 2023 (the Act) in order to develop some of the concepts and requirements set out within the Act.
Draft subordinate legislation was issued last year as part of a two-stage consultation process. PR 2024 does not differ much from what was previously issued, save that instead of two sets of regulations all the contents are now set out in one single set of regulations. At the same time the Cabinet Office also issued the UK Government’s response to the consultation from last year.
PR 2024 sets out a wealth of detail in respect of how to comply with requirements under the Act.
This includes:
- the basic information that suppliers need to provide
- the content requirement in the various notices that contracting authorities are required to issue
- the content requirements for assessment summaries (which replace the previous contract award notification document as the primary debrief document for bidders)
- clarifying what services are designated to be light touch services and also what are reservable light touch services
- disapplying the provisions of the Act in relation to regulated health procurement, which comes under the Provider Selection Regime that came in earlier this year
- further clarifying the meaning of “works” as used in Schedule 1 of the Act
- setting out what is meant by “central government authorities”.
In comparison with the earlier draft consultation versions of the PR 2024, the version laid before Parliament has removed the provisions dealing with transition and how to calculate utility turnover and percentages for horizontal and vertical arrangements. These aspects are intended to follow later in separate legislation. Also removed is the requirement that a tender notice indicates the suitability of the procurement for SMEs/VCSEs. Finally, the revised version of PR 2024 limits the requirement to state unsuccessful bidder names in a contract award notice to only procurements over £5m.
PR 2024 is subject to the draft affirmative procedure, which means that Parliament must approve these regulations before they become law. They must be debated by the House of Commons and the House of Lords prior to approval. The date for these debates has not yet been confirmed, however, we expect them to take place soon given that this new regime is intended to come into effect in October and a six-month leading period is required prior to then.
New guidance on the transition to the new Act
The UK Government considers that a number of queries will be addressed by guidance published on the Transforming Public Procurement website.
The guidance currently covers the following:
- Definition of a “Contracting Authority”.
- Definition of a “Covered Procurement”.
- Dealing with mixed procurement.
- Calculating thresholds.
- Calculating the value of contracts in relation to the thresholds.
- Exempted contracts.
Further guidance is expected to be published soon — including on transitional arrangements.
It’s clear that the intention of many of these provisions is that — while many terms have changed — it’s very much ‘business as usual’ when transitioning from the current regime to the new Act. The guidance also clears up some existing queries, for example it has been made clear in the guidance on thresholds that the already outdated thresholds contained in Schedule 1 of the Act will be updated to reflect the new financial thresholds introduced at the start of this year.
Talk to us
It’s crucial that practitioners of procurement law take on board this information and familiarise themselves with these changes.
If you require any assistance, talk to our experienced procurement law team.
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