The Procurement Act 2023 ("the Act") is due to come into effect on 28 October 2024 (see our blog post for further details). In the run up to the Act coming into force, the Government has presented both a National Procurement Policy Statement (the "Statement") to Parliament and introduced the Procurement Regulations 2024 (SI 2024/692) ("the Regulations"). In this blogpost, we outline the priorities and developments contained in the Statement and the Regulations, which add further colour to the way forward set out in the Act.
Timeframes
On 13 May the Government Central Function, the cross-government network which procures or supports the procurement of goods and services for the Government, presented the Statement to Parliament.
The Statement sets out the Government's strategic priorities for public procurement, as well as how contracting authorities can support their delivery. The Statement is further supplemented by the Regulations, which were made on 22 May 2024. The Regulations provide extra details on certain aspects of the new procurement regime. Both the Statement and the Regulations accompany the Act and will come into effect on the same date (28 October 2024).
The Statement
All contracting authorities, save for specified exemptions, must "have regard" to the Statement under section 13(9) of the Act.
Five national priorities are addressed in the Statement:
1. Value for money
The Statement emphasises that value for money is paramount in fulfilling the Government's commitment to taxpayers and delivering public services efficiently.
Contracting authorities must place value for money at the "forefront of all procurement activities" by balancing effectiveness, efficiency and economy over the life cycle of a product, service or works to achieve the intended outcomes of the procurement. Notably, this explicitly includes socio-economic and environmental benefits and impacts.
In terms of application, the Statement suggests that:
- in preparation for the preliminary market engagement and procurement strategy design phases of a procurement, commercial teams should ensure they have a good understanding of the policy or programme of which their procurement is a part; and
- the procurement should be designed and managed in order to enhance achievement of the associated policy outcomes (as monitored in a policy impact evaluation by the policy lead).
2. Social value
The Statement requires all contracting authorities to have regard to the following outcomes in their procurement activities (where it is relevant to the subject matter of the contract and proportionate to do so):
- creating resilient businesses and opportunities for quality employment and skills development;
- improving innovation, supply chain resilience and security of supply; and
- tackling climate change and reducing waste.
The outcomes could be achieved, for example, by changing the way the procurement is structured or the award criteria which will determine the most advantageous tender.
However, the Statement emphasises the need to achieve these outcomes without overburdening suppliers (for example, by placing onerous requirements on supplies or using disproportionate clauses in tenders and contracts).
3. Small and Medium-sized Enterprises
The Statement champions the role of small and medium-sized enterprises ("SMEs") in the economy and encourages contracting authorities to open up public procurement opportunities to more SMEs and voluntary, community and social enterprises. It notes that SMEs play a role in not only providing a local service and employment, but also in offering innovative solutions to public service delivery.
The Statement recommends that contracting authorities 'level the playing field' by reducing and removing barriers in the procurement process.
4. Commercial and procurement delivery
The Statement notes that contracting authorities should consider whether they have the right operational policies and processes in place to manage the key stages of commercial delivery, including by reference to the Government's Playbook series. The Sourcing Playbook captures best practice, detail on the principles, and guidance on sourcing services and assets. Depending on the sector, contracting authorities should also consider the Construction, Digital Data and Technology and Consultancy Playbooks.
5. Skills and capability for procurement
Tying into the key priority of value for money, the Statement provides that contracting authorities should consider their organisational capability and workforce plans, with regards to the procurement and contract management skills and resources required to deliver value for money, for example by reference to professional standards. Contracting authorities should be confident they have sufficient work force and capability to ensure taxpayers' money is spent effectively and efficiently.
A contracting authority may be held accountable for any breaches through judicial review proceedings and, in cases where a contracting authority commits systemic breaches, there may be grounds for an investigation under Part 10 of the Act. Following an investigation, authorities which are held to be engaging in actions giving rise to a breach of the Act may receive a recommendation under section 109 of the Act. This recommendation will state the action the relevant contracting authority should take to ensure it complies with the requirements and the timing of such action.
The Regulations
The Regulations provide further detail on requirements in the Act and, in particular, prescribe the information which must be published by a contracting authority in various procurement notices and documents.
In addition, the Regulations set out the requirement for a contracting authority to use, and share information through, the central digital platform:
1. Publication of notices on central digital platform
Regulation 5 requires that specified notices, documents or information published or given under the Act must be published on the central digital platform (accessed on www.gov.uk). Relevant documents include (but are not limited to) tender notices under section 21 of the Act and contract award notices under section 50 of the Act.
The Regulations also set out further detail on when this obligation is deemed to have been met by the contracting authority. Importantly, the Regulations do not prevent a contracting authority from publishing a notice, document or information elsewhere, but it must not do so before publishing the notice, document or information on the central digital platform (or an alternative online system, as set out in further detail in the Regulations).
2. Sharing core supplier information through a central digital platform
Where a supplier provides core supplier information (for example, basic information, economic and financial standing information or connected person information) during the process of tendering for a public contract, Regulation 6 sets out a requirement for the contracting authority to ensure that this information has been provided to the central digital platform.
The timeframes for suppliers to take this step differ depending on the selection procedure, but the supplier must register for the central digital platform and submit up-to-date core supplier information to the platform. Before awarding a public contract, the contracting authority must then obtain further confirmation from the supplier that it has submitted updated or corrected core supplier information to the central digital platform.
The Regulations further identify services that are considered 'light touch services' (i.e. subject to more flexible rules) for the purposes of the Act.
Comment
The Statement adds colour to what is expected of a contracting authority under the broad policy objectives set out in the Act, in particular the three new objectives of delivering value for money, maximising public benefit, and acting with integrity. The Statement emphasises the importance of "value for money", which should be "at the forefront of all procurement activities" and provides guidance on how the objective should be interpreted and the steps contracting authorities should take at the initial stages of a procurement to deliver this. The Statement's focus on social value and SMEs also provides a steer on topics which contracting authorities should have in mind when considering how to maximise public benefit.
The Regulations expand upon another of the Act's objectives, sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions. Relatedly, the Act stipulates that a contracting authority must treat suppliers the same unless a difference between the suppliers justifies different treatment. The Government's use of the central digital platform (which will build upon the current Find a Tender service) and its prescriptiveness about the type of information which must be published by a contracting authority seek to deliver these objectives and ensure procurement decisions are objective and fair.
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