THIS BLOG HAS BEEN UPDATED ON 13.09.24 AFTER ANNOUNCEMENT BY NEW LABOUR GOVERNMENT THAT A NEW NATIONAL PROCUREMENT POLICY STATEMENT (NPPS) WILL BE PRODUCED.
The NPPS is a statotyr statement that allows the Government to set and communicate the wider policy objectives to which it expects public procurement to contribute (e.g. economic growth and opening up public contracts to small businesses). The NPPS sets out the Government’s strategic policy priorities for public procurement is an essential element of the Procurement Act, and it is crucial that the new regime commences with a statutory NPPS aligned to the new Government’s priorities. The NPPS laid down by the previous administration will be withdrawn. This is the reason that The Procurement Act 2023 is now anticipated to come into effect on 24th February 2025. It will still cover NEW contracts in England, Wales and Northern Ireland (the devolved Governments were able to decide whether to participate, and Scotland has opted out, so it is not covered by this legislation).
The existing rules will continue to apply to procurements that are in progress or have already been awarded. If a Contracting Authority had been planning on commencing a procurement between October and February, it will need to make a decision on whether to proceed with the planned timetable (and purchase under the existing regulations) or delay the procurement until after 24th February 2025.
The Procurement Act applies to public sector contracts with a value over:
- £138,760 – for supply of goods, services or works to a central government authority
- £213,477 – for supply of goods, services or works to a sub-central government authority
It covers contracts being let by:
- Central Government departments and arms-length bodies.
- Local authorities.
- NHS trusts.
- Some (but not all) schools, universities, housing associations and health bodies.
The Procurement Act 2023 pulls together 4 different sets of regulations into a single simplified set of rules with a view to:
- Increasing visibility of public sector opportunities (and storing information relating to these in one place via developments currently being made to the UK’s Find a Tender service).
- Simplifying the process and removing duplication of activity where possible (via a central digital platform).
- Opening up public sector opportunities to new entrants and SMEs.
- Increasing the information available to suppliers via pre-market engagement and assessment summaries which will provide more detailed feedback on tender submissions.
- Making opportunities more flexible so suppliers are not shut out for long periods of time via use of “Dynamic Markets”. These contracts which will allow potential suppliers to bid for and be awarded contracts at any time during the contract term. Open Frameworks will still continue for some procurements.
- Ensuring that all suppliers (including non-UK suppliers) are treated the same.
- Ensuring prompt payment.
The Procurement Act’s Objectives
The Procurement Act 2023 has a set of objectives which covers:
- Delivering value for money – by achieving the best mix of quality and price, and demonstrating the value delivered by the supplier.
- Maximising public benefit – by ensuring that suppliers will deliver improvements in terms of economic, environmental and social value. MEAT – or most economically advantageous tender will be replaced by MAT – most advantageous tender. What this means is that more emphasis will be placed on criteria such as social value rather than purely best value for money.
- Sharing information – by requiring Contracting Authorities to share information with suppliers and embed a new culture of improved transparency.
- Acting with integrity – by preventing fraud and mismanagement and maximising good management and process controls.
- Treating suppliers the same – by ensuring that deadlines, quality standards, word counts etc are the same for everyone, and ensuring there is no unfair advantage or disadvantage to any supplier.
- Having regard to SMEs who may not have internal bid teams by removing barriers they may face (e.g. ensuring realistic response times).
Central Digital Platform
This is being built on the current Find a Tender service platform. It is designed to provide a single procurement system where Contracting Authorities will publish all opportunities and suppliers can register and upload key business information (similar to that required at SQ stage currently). For this to be successful, suppliers must ensure that information on this platform is kept up to date!
Once suppliers have registered on this platform, suppliers will be able to do customised searches for opportunities that relate to their business and access alerts free of charge. They will also be able to find pipeline notices and pre-market engagement notices identify upcoming opportunities in advance.
What’s more suppliers will be able to see who the existing suppliers are, have clear visibility of their performance and be able to see contract expiry and opening dates.
Notices
Where there are currently only 5 notice types, this will increase significantly to 13! The key notice types for recruitment agencies to consider will be:
- Pipeline notice – Contracting Authorities will be required to published pipeline notices for contracts exceeding a value of £2 million that are due to arise over the forthcoming 18 months to enable suppliers to plan/prepare for them.
- Market engagement notice – providing suppliers with the opportunity to participate in events, understand the Contracting Authority’s requirements and help inform the procedure. This notice may also be used where market engagement has already take place to inform suppliers of the outcome.
- Planned procurement notice – an optional notice intending to show that a public body intends to publish a tender notice in the future.
- Tender notice – equivalent to the current contract notice and provides details on the tender notice will publish details of the tender procedure.
- Contract award notice – published at the conclusion of procurement before entering into a contract. As part of this the Contracting Authority will be required to issue all bidders with an Assessment Summary (equivalent to the current standstill letters) with feedback to each supplier that submitted a tender before publishing the Contract Award Notice.
- Contract details notice – confirming the details of the award and copies of the contract.
- Procurement termination notice – where a contract comes to an end for any reason (including expiry).
Tender Procedures
There will be three types of tender procedure:
- Open Procedures – designed for relatively simple procurements and will be a single stage process.
- Competitive Flexible Procedure – this is similar to the current restricted procedure in that it will be a multi-stage process with more opportunity for negotiation and dialogue between the Contracting Authority and suppliers (e.g. incorporating opportunities for suppliers to demonstrate innovation, run product demonstrations and test prototypes).
- Direct Awards – where there is extreme, unavoidable urgency (e.g. during Covid-19). These can take place where a Minister of the Crown, Welsh Minister or Northern Ireland Departments can authorise direct award of a contract to protection life and health, or public order and safety. A Direct Award contract can also be used by specific end users (e.g. within a health or social care environment where the end user can determine who provides the service).
Frameworks & Dynamic Markets
A Framework is a contract between a Contracting Authority and one or more suppliers for future award of contracts with Participating Authorities via call off contracts. It sets out the terms and conditions that all supply must align to.
An Open Framework is a framework that will allow new suppliers to join the framework during the contract term. An Open Framework will have a maximum 8 year duration (currently it’s 4), however:
- The Contracting Authority must reopen the Framework to bidders at least once within the first 3 years.
- The Framework must not be closed for more than 5 years.
Dynamic Markets will be similar to the current DPS in that suppliers will be able to apply to join the contract at any time and there will be no limit on the number of suppliers that can join. This means that Dynamic Markets will be much more flexible and agile for suppliers.
Grounds for Exclusion & Debarment
The equivalent of the current mandatory and discretionary grounds for exclusion will still appear in tenders to protect Contracting Authorities from suppliers with a history of offences or misconduct. These grounds will be stronger and more detailed to improve clarity, and there will be new grounds for exclusion added. There will be a “self-cleaning” process for suppliers during the tender process.
The Act will also introduce a public “debarment list” maintained and managed by the Procurement Review Unit within the Cabinet Office. Suppliers on this list will be precluded from participating in public sector procurements. Debarment will be able to occur because of serious cases of misconduct or unacceptably poor performance (or other circumstances that make a supplier unfit to bid for public contracts), with a view to preventing unscrupulous suppliers from winning public sector contracts.
Debarred suppliers can apply to be removed from the list if they can provide evidence that the issue has been fully resolved (i.e. by proving they have made changes that mean they no longer breach the exclusion grounds). They can also appeal against a debarment decision via the High Court (in England, Wales & Northern Ireland) or the Court of Session (in Scotland).
Award Procedures & Tender Feedback
It will be mandatory for Contracting Authorities for provide detailed feedback for unsuccessful bidders in the form of an Assessment Summary. This will detail the outcome of the individual supplier’s tender against the award criteria and against the winning supplier’s Assessment Summary (with any commercially sensitive information redacted). The Assessment Summary may also be accompanied by additional feedback but this is not a mandatory requirement for Contracting Authorities.
There will now be an 8 working day “standstill period (replacing the current 10 calendar days) before a contract can be entered into.
Contract Management
Contracting Authorities will also be required to specify a minimum of 3 KPIs for all contracts with a value greater than £5 million, and publish the performance of the incumbent suppliers against these KPIs annual throughout the life of the contract. Contracting Authorities will also be required to publish details of suppliers who have breached a contract or where poor performance has taken place. If suppliers consistently underperform then it will not only cause them reputational damage as this information will be in the public domain, but this could also impact their ability to bid for contract in the future as a new discretional exclusion ground will be added which requires suppliers to disclose poor performance (where they do not improve despite being given the opportunity to do so). The Act will also include the ability to exclude suppliers based on the status of their subcontractors as well as their own performance.
Prompt payment has also been addressed with 30 day payments terms being automatically passed down to suppliers and contractors, irrespective of whether such a clause is written into their contract. Performance data in terms of adhering to these payment terms will be published to hold Participating Authorities to account regarding their payment practices.
