The proposed text of the government's 'once in a generation' overhaul of public procurement was published on 11 May 2022. The Procurement Bill sets out the government’s plans to create what it intends to be a simpler and more flexible system for public procurement and follows the government's 2020 green paper on Transforming Public Procurement.

The Bill paves the way for significant reforms that include:

· Reducing the number of regulated procurement procedures from seven to three;
· Consolidating all (or almost all) procurement rules into a single regulation; and
· Changing the basis on which contracts are awarded, with more emphasis on social and other considerations.

There is a lot for public sector schemes and their suppliers to consider before the new legislation comes into force in 2023. This article highlights some of the key changes.

Scope

The bill adopts a new definition of 'contracting authority' that extends to organisations with public functions, which are mainly funded by public funds or are subject to oversight by a contracting authority. Schemes which are 'contracting authorities' under the current regime should consider whether they will remain so under this new proposed definition.

A simpler regulatory framework

The bill consolidates the legal regimes for public contracts, utilities, concessions and defence and security, all of which are currently governed by different regulations. The bill does not, however, create a single 'one-stop shop' for all public procurement laws.

Regulated schemes will still need to have regard to procurement rules which exist under separate enactments (for example, under the Equality Act 2010), which will remain in force as further sources of public procurement regulation. In addition, the bill anticipates that there will be extensive secondary legislation to deal with certain important matters that are not addressed in the bill itself (for example, the required contents of compulsory transparency notices).

Fewer procurement procedures

The bill reduces the number of regulated procurement procedures and affords more flexibility to contracting authorities to design and conduct their own procurements.

The seven procurement procedures in the current regulations will be replaced by three, as follows:

(i) A new 'flexible competitive procedure' which permits contracting authorities to design and implement their own procurement procedures providing they comply with the general rules in the bill (for example, in relation to award criteria, timing, technical specifications etc);

(ii) An 'open procedure' for simpler 'off-the-shelf' competitions – a single stage procedure similar to the current open procedure.

(iii) A 'direct award procedure' which can be used only in certain limited circumstances such as extreme urgency.

Regulated schemes will need to consider and revise their existing procurement policies and templates to adopt these new procedures.

Major reform of rules on exclusion

The bill establishes a new framework for the exclusion of suppliers from procurement processes. These include:

(i) The introduction of a new 'past poor performance' exclusion criterion, which is to be available in certain circumstances where a supplier has breached a prior public contract or where a contracting authority is dissatisfied with a supplier's performance. There will also be a national register of past poor performers, which can be used as a basis to exclude on the 'past poor performance' ground.

(ii) The introduction of a new debarment list – a central register of suppliers who are excluded from a procurement competition on any exclusion ground, to be operated by the Cabinet Office.

New extensive transparency requirements

In an effort to ensure that transparency is observed throughout the procurement lifecycle, the bill implements proposals to require contracting authorities to publish a range of new notices and other documents. New mandatory notices include: a 'contract change notice' where certain variations have been made to an existing public contract and a 'preliminary market engagement notice' where a contracting authority intends to engage with suppliers in relation to certain procurement planning activities. Whilst these measures will improve transparency for suppliers, there will inevitably be an increased administrative burden on regulated schemes to comply with these requirements.

What next?

Regulated schemes will need to consider the implications of the new bill carefully. These include, most notably, understanding and adapting to the three new procurement procedures. The bill is likely to take a number of months to pass through parliament and may be amended further on the way. To help authorities and suppliers prepare for the new rules, the government has pledged that a six-month ‘go live’ period will apply once the bill has been enacted before it enters into force.

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