Procurement Act 2023: Getting your team up to speed
The Procurement Bill gained Royal Assent in October 2023, and it is expected that the Procurement Act 2023 will come into force in October this year. Secondary legislation is still being consulted on and we will share more information when it becomes available. The Procurement Act aims to create shorter simplified rules around public procurement, which accounts for £300 billion of all public expenditure per year in the UK.
We sat down with Mary Mundy, Partner at Capsticks LLP to discuss what the changes mean for public sector procurement teams.
What are your top three tips to prepare procurement teams for the legislative changes?
1. Read the legislation, attend training sessions, and read as much information explaining the legislation, such as articles by law firms. Do not delay getting up to speed as the more you prepare, the more confident you will be.
2. Think about how the new legislation compares to the current requirements and how the changes will impact your role. In particular, think about a procurement process you have run and how you could have future proofed your contract – this will be really important under the new legislation.
3. Don’t panic – you’ve got a solid grounding remembering that procurement is based on transparency, equal treatment, non-discrimination and proportionality – although some of this language is slightly different under the Procurement Act, a lot of the basics that happen in a procurement process will be similar to what happens now.
What are the benefits of the new Procurement Act to contracting authorities?
The main benefit I see is the flexibility that contracting authorities will have to design their own procurement processes. They may be really simple (like a restricted process as we know now) or they could involve a number of stages including dialogue and negotiation – these will probably only be necessary for more complex contracts, but it is good to know that flexibility is available.
Another positive change will be the open framework agreements – these can last for a maximum of 8 years and suppliers are able to apply to join at defined points set out in the procurement documents and framework agreement. This should enable NOE CPC customers to get access to the latest innovation from the suppliers.
What are the challenges of the new Procurement Act to contracting authorities?
There will be a lot more notices to publish and contracting authorities will need to keep on top of these. There will be an obligation to publish nearly all contract variations in advance and so these variations will need to have been drafted into the contract as potential variations from the outset or fall within one of the other safe harbours under the Procurement Act – a lot more work will need to go into future proofing contracts.
There is (arguably) more detail to go into standstill letters under the Procurement Act. These will be called “assessment summaries” and although the regulations covering assessment summaries are still being consulted on (at the time of our discussion), it is likely that one of the things that contracting authorities will need to explain is why a bidder didn’t achieve the score above the score it did achieve (unless it received full marks) as well as the reasons it got the score it did achieve. There will be a greater focus on contract management under the Procurement Act and so contracting authorities will need to ensure that those stakeholders in the organisation that manage the suppliers ensure they follow the contract management process under the contract and if the contract is worth over £5m, there will need to be KPIs and an obligation to publish the supplier’s performance against those KPIs.
What are the key differences between the new and existing legislation?
The key differences are:
1. The Procurement Act consolidates the legislation for contracting authorities (public contracts), utilities and concessions although the Procurement Act itself won’t contain all the detail – there will still be regulations sitting under the Procurement Act that will also have to be read, understood and complied with as they make up the legislation.
2. There will no longer be prescribed procedures (currently we have the open, restricted, competitive procedure with negotiation, competitive dialogue and innovation partnership procedures). Instead the Procurement Act will set out that the open procedure can be used and it will enable contracting authorities to design their own procedure as long as it meets certain parameters.
3. There will be a lot more notices to publish throughout the lifecycle of a procurement (including at pre market engagement, when a contract is advertised, when a contract is going to be varied, when a contract ends or is terminated by the Authority and how a supplier is performing against KPIs for example (this isn’t an exhaustive list.)
4. There is a broader framework for excluding suppliers under the Procurement Act and the introduction of a “Debarment List” that will be kept centrally – where suppliers are excluded, contracting authorities will have to notify the Minister of the Crown in order for it to consider whether suppliers should be on the Debarment List (suppliers will have to be consulted and may appeal). Depending on the reason for being on the Debarment List, suppliers either will or may have to be excluded from procurement processes until they are removed from the list. Theoretically it will be “easier” to exclude a supplier for prior poor performance of a public contract although suppliers must be given the opportunity to have dialogue with a contracting authority before this is done and the contracting authority will have to notify the Minister of the Crown in order for it to consider whether the relevant supplier goes on the Debarment List.
5. The standstill period will change to 8 working days (it is currently 10 calendar days) but in practice this won’t be that different.
6. As discussed earlier, standstill letters (which will be called “assessment summaries”) will need to be more detailed which will have a knock on impact on moderation records.
7. There will be more focus on how a supplier performs during the term of the contract – the Public Contracts Regulations 2015 don’t really cover contract management.
What support is available for contracting authorities to prepare for the changes?
The Government has made lots of training available and there are 'knowledge drops'. Lots of law firms have prepared articles, webinars and podcasts and will continue to do so. Capsticks has already published a number of articles and podcasts and will be issuing more in the New Year.
Knowledge drops on Transforming Public Procurement are available on the gov.uk website.