The long-awaited Procurement Bill goes before Parliament: 10 key features

The post below was first published on our Public Law blog

The much-anticipated Procurement Bill was laid before the UK Parliament on 11 May and has already received its first reading in the House of Lords.   Once enacted, the Bill will overhaul the existing regulations governing the award of public and utility contracts in the UK (other than Scotland).  These outgoing regulations are based closely on EU Directives, which the Government sees as outdated and overly bureaucratic.  Following completion of the Parliamentary process, the Bill will become the Procurement Act and is likely to enter into force in 2023.

The Bill implements most of the changes foreseen in the Government's Green Paper of December 2020 on transforming public procurement, as modified in its response to the Green Paper consultation, issued in December 2021.  We covered these developments here and here.

The Bill is a long and complicated instrument, running to well over 100 pages.  We outline and comment on ten of the Bill's main features below.  We will closely monitor the Bill's progress through Parliament and issue further updates in due course.

The Procurement Bill

A single Act consolidating four previously separate sets of regulations

As foreseen in the Green Paper, the Procurement Bill will replace the four separate sets of regulations that are currently applicable in England, Wales and Northern Ireland: namely, the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence & Security Public Contracts Regulations 2011.

The Bill will therefore ensure that all of the procurement regulations applicable in the UK (outside Scotland) can be found in a single instrument.  This consolidation is to be welcomed, but does mean that the Bill's provisions are littered with detailed carve-outs and exceptions applicable only to utilities, concessions or defence.

Familiar provisions, but substantially re-worded and re-ordered

The Bill covers almost all of the provisions found in the current regulations, but these are extensively re-worded and re-ordered.  For example, the voluminous rules on scope (relevant entities and contracts), exemptions, technical specifications, contract modifications and court remedies remain substantively similar, but have all been rewritten in a more British style.

New terminology

Underlining the last point, the Bill introduces a lot of new terminology.  For example:

• Excludable supplier, for bidders falling within a discretionary exclusion ground
• Treaty state supplier, for bidders from countries with which the UK has a free trade agreement, giving them equal access to UK public contracts.
• Planned procurement notice, instead of prior information notice (PIN)
• Tender notice, instead of contract notice
• Dynamic markets, in place of dynamic purchasing systems
• Most advantageous tender, replacing most economically advantageous tender
• Order setting aside the contract, instead of a declaration of ineffectiveness.
• Contract details notice, instead of a contract award notice.

Increased use of Schedules

It is noticeable that many of the core provisions which appear in the main body of the current regulations are relegated to the 11 schedules at the back of the Bill.  These include the extensive provisions on exempted contracts (Schedule 2), valuation of contracts (Schedule 3), grounds justifying direct awards (Schedule 5), bidder exclusion grounds (Schedules 6 and 7) and permitted contract modifications (Schedule 8).

The increased use of Schedules arguably makes the text less user-friendly, as readers will frequently need to scroll between the front and back ends of the Act in order to ascertain the full picture on any particular point.

A simpler, less-regulated competitive award procedure

The above aspects of the Bill could be described as mere window-dressing, but the Bill does also include some more substantive changes.  In our view, the most important is the new "competitive award procedure".  This single, flexible procedure, which authorities may structure largely as they see fit, will replace four existing procedures: namely, the restricted procedure, competitive dialogue, the competitive procedure with negotiation, and innovation partnerships.  The current plethora of overlapping procedures is unnecessary and confusing.  Rolling them into one, flexible process is a genuine improvement.

Greater scope to adjust procurements mid-process

Another helpful innovation is an express provision (clause 31 of the Bill) allowing contracting authorities to make non-substantial modifications to the terms of a procurement at any time before the deadline for submitting tenders.  In a similar vein, clause 23 allows an authority to refine its award criteria at any time before it invites bidders to submit their tenders.

Open frameworks

The Bill retains most of the existing rules on framework agreements, including their prima facie maximum duration of four years.  However, as foreseen in the Green Paper, the Bill also introduces a new option, called "open frameworks" (clause 47).   These are successive frameworks which may last for a total period of 8 years, provided the framework is re-opened to competition at least once during its first three years and once in the subsequent 5 years.  It is debateable whether this rather complicated new option offers any real improvement on the current possibility of awarding two (or more) successive frameworks of four years each.

Increased transparency - and red tape

Another recurring theme of the Bill is the requirement for increased transparency.  In particular, contracting authorities will be required to publish various new types of notice.  In addition to the PINs, contract notices and award notices that already have to be published (and which will be re-named, as noted above), the Bill provides for at least seven new types of notice:

• Preliminary market engagement notice (clause 18 of the Bill)
• Transparency notice (before any direct award) (clause 43)
• Payment compliance notice (clause 64)
• Contract change notice (clause 69)
• Contract termination notice (clause 72)
• Below-threshold tender notice (clause 79)
• Pipeline notice (clause 82)

Furthermore, before entering into any contract worth more than £2 million, the Bill (clause 50) requires the contracting authority to set and publish at least three key performance indicators (KPIs).  The authority must then publish an assessment against those KPIs at least every 12 months during the contract's term (clause 66).

Greater transparency has its merits, but these new publication requirements will impose a significant administrative burden on contracting authorities.  One of the Government's stated aims in overhauling the regulations was to make the rules less bureaucratic, but these new publicity requirements will entail more "red tape", not less.

A (slightly) modified remedies regime

Part 9 of the Bill makes only modest adjustments to the existing remedies regime.  As expected, the more radical changes floated in the Green Paper, including a cap on damages and the introduction of a specialised procurement tribunal, have been dropped.

The most significant change in this part of the Bill is a newly-worded test to be applied by courts when deciding whether to lift the automatic suspension on contract-making.  The new test requires courts to take into account the public interest in ensuring compliance with procurement law and in avoiding delays to public contracts, as well as the private interests of suppliers and whether damages would be an adequate remedy for the claimant.  In reality, however, these matters are already taken into account under the existing "balance of convenience" test derived from the American Cyanamid case.

Debriefing of unsuccessful bidders still required

Somewhat surprisingly, the Green Paper proposed abandoning the requirement that authorities send debrief letters (often called standstill or Alcatel letters) to unsuccessful tenderers before signing the contract with the winning bidder.  The Bill, however, requires authorities to send an "assessment summary" to each tenderer which sets out information about the authority's assessment of that tenderer's tender and the tender of the winning bidder (clause 48).  Although the nature of the required information is not specified, this sounds like a debrief letter in all but name.

Conclusion

Overall, the Bill delivers upon most of the changes foreseen in the Green Paper.  However, as outlined above, many of these changes are somewhat cosmetic in nature and do not fundamentally alter the underlying substance.  Moreover, the sheer length and complexity of the Bill calls into question whether it achieves the Government's original stated aims of simplifying the procurement rules and making them less burdensome for the public sector, utilities and their suppliers.