#Commerical Matters: Procurement Act MEAT vs MAT
We are continuing our series of legal blogs as we head closer to the implementation of the Procurement Act, scheduled for October.
Our theme for August is #CommericalMatters and we are taking a deeper dive into the implications of the changes from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT).
We spoke to Andrew Daly, Partner, and Head of Procurement at Hempsons, about what these changes mean for contracting authorities.
The term ‘economically’ has been dropped, is price still likely to be a deciding factor for contracting authorities?
In practice, I don’t expect that the NHS will see any difference between MEAT and MAT when assessing bids. Yes, the word “economically” has been dropped, but our experience is that NHS organisations already assess price and quality, rather than just looking for the lowest price.
Section 19 of the Act provides for contracting authorities to award a public contract to the supplier that submits the most advantageous tender in a competitive tendering procedure. The most advantageous tender is described as the one that the contracting authority considers: (a) satisfies its requirements; and (b) best satisfies the award criteria when assessed by reference to the assessment methodology, and (if there is more than one criterion) the relative importance of each criterion. "Price, other costs or value for money in all the circumstances" is included as a factor which contracting authorities should have regard to when setting award criteria in accordance with section 23, so it is clear that price can still be assessed under the Act.
It is also of note that the published guidance, “Assessing Competitive Tenders,” states:
“The overall basis of award is now referred to as the ‘most advantageous tender’ (MAT), rather than, as in the previous legislation, the ‘most economically advantageous tender’ (MEAT). However, this is not a change in policy and the change is to clarify and reinforce for contracting authorities that tenders do not have to be awarded on the basis of lowest price/cost, or that price/cost must always take precedence over non price/cost factors.”
So, in my view, the change is not significant, and price will still be a key factor in determining the identity of the preferred bidder.
The building in of sustainability and social value into procurement activity has been in place for some time. Does the shift from MEAT to MAT put more focus on social value, environmental and other considerations for contracting authorities?
It will be for contracting authorities to decide on the criteria. The Act does set out a broader range of factors which contracting authorities must consider when carrying out a procurement (see section 12), but these must still be linked to the subject matter of the contract. "Maximising public benefit" is included, which could cover environmental and social objectives. Whether this will have a greater impact beyond the current assessment of social value will have to be seen. One size will not fit all, so just like the position is now under the PCR 2015, consideration will need to be given to how tenders will be assessed. There may be some contracts where a greater emphasis on social value etc. would be sensible, but I suspect most contracting authorities will stick to the bulk of the weighting being quality and price.
How will the shift to MAT affect suppliers?
For the reasons above, we will need to watch this space. Suppliers need to respond to the requirements stipulated by contracting authorities. Initially I can’t see much change as the new Act beds in, but there could be a move towards greater emphasis on maximising public benefit. Much may depend on the political drivers at the time.
What are the key points for trusts to be aware of when looking at MEAT vs MAT?
My view is that it will be business as usual.
The key requirements for award criteria are:
- they must relate to the subject-matter of the contract.
- they must be sufficiently clear, measurable, and specific.
- they must comply with the rules on technical specifications (see guidance on technical specifications for more information); and
- they must be a proportionate means of assessing tenders having regard to the nature, complexity, and cost of the contract.
Just like they do now, contracting authorities will need to determine the criteria, based on the specific requirements of the contract, and make sure these are published etc. You will still need to ensure it is clear how the criteria will be assessed. Setting the evaluation criteria will remain a key part of any process.