This informal CPD article, ‘The Procurement Act 2023 – What Is Changing In Public Procurement?, was provided by Executive Compass, who provide bid management and bid writer services assisting owner-managed businesses, SMEs and large multi-national companies to win public and private sector contracts.
The end of last year saw the Procurement Act 2023 receive royal assent, with a targeted implementation date of October 2024. Unfortunately, this has been delayed, as the Cabinet Office published a ministerial statement declaring that the delay will allow time for a new National Procurement Policy Statement to be created.
The Procurement Act 2023 – Principles and Objectives
Within the introduction of the Procurement Act, the legislation outlines the following key principles and objectives:
- Delivering value for money solutions which are beneficial to the taxpayer through the public sector procurement process
- Maximising public benefit with award of contracts or framework agreements, such as the use of social value in procurement
- Acting with integrity through the tender procedure, including a commitment to transparency and openness – such as publishing notices of successful suppliers.
Further to this, the Cabinet Office has also highlighted the need to encourage and facilitate SMEs to become public sector suppliers.
Changes from the Public Contracts Regulations 2015
Previous procurement was governed by the Public Contracts Regulations 2015, which will expire once the Procurement Act goes live. While this will not fundamentally change the structure of public sector bids and tenders, there are differences to the procedures, evaluation and oversight for suppliers.
Changes to evaluation
Under the old procurement regime, the ‘most economically advantageous tender’ – commonly known as MEAT – was awarded the contract. The Procurement Act has amended this to define the ‘most advantageous tender’ as the successful bidder.
Although this may seem a minor semantic difference, it is aligned with one of the principal objectives of ‘maximising public benefit’, in addition to shifting emphasis to social value and environmental benefits within public sector tenders.
Requirement to publish KPIs and supplier performance
New guidance includes a requirement for the contracting authority to set and publish a minimum of three key performance indicators on all contracts with an estimated value exceeding £5 million.
These must also be assessed at least every 12 months, with results published publicly – allowing other clients, competitors and contracting authorities to monitor performance. It is hoped the above measures will increase oversight and scrutiny of supplier performance.
Introducing a public debarment list
In a similar vein, Regulation 62 outlines the new public sector supplier debarment list and procedures for excluding suppliers who have underperformed on a contract.
Following an investigation and confirmation of infraction of procurement processes, the excluded supplier and details of the infraction will be entered on to a publicly accessible exclusion list. Reasons for tender exclusion can include:
- Unacceptable contractual performance, such as defaulting on works or services delivered
- Serious breaches of contract, including a court judgement issued against the bidder
- Improper behaviour during the tender process, including providing inaccurate information or canvassing an authority representative.
Ultimately, the public debarment list will give authorities stronger measures for excluding suppliers who underperform on public sector contracts – increasing oversight and improving quality of service delivery.
Simplifying procurement procedures
Currently, public sector procurement has eight different types of tender procedures, with some reserved for specific kinds of procurement (such as utilities). The Procurement Act 2023 will simplify and reduce these to two different types:
- Open procedure – the most common form of tender procedure, where the SQ and ITT are returned to the buyer on the same date. This is identical to the current open procedure under the current regime governed by the Public Contracts Regulations 2015.
- ‘Competitive flexible’ procedure – a new process, which provides greater flexibility for contracting authorities to design and develop their own procurement processes. The competitive flexible procedure will support a more tailored approach to the complexity and cost of individual contracts.
It is hoped the two types of procedures will make it easier and more accessible for suppliers to submit tenders.
Greater market engagement before tenders are released
The current procurement regime includes the use of prior information notice, commonly known as PINs. The Procurement Act has introduced widespread guidance on market engagement before tenders are released, including:
- Releasing market engagement notices at least 40 days before the tender notice is due to be published, which replaces the more sporadic PINs
- Preliminary market engagements with suppliers to increase collaboration between stakeholders and identify priority areas for the works or services
- Duties to consider Lots within a tender by workstream if they cannot be reasonably delivered by a single supplier.
National Procurement Policy Statement – What Will Change?
As above, the new government formed by Labour has postponed the implementation date for the Procurement Act. They have also indicated that a new National Procurement Policy Statement will inform and guide public procurement in the coming years.
Recently, the government have published a stakeholder survey to determine how to:
- Achieve value for money for the taxpayer when delivering public services
- Increase quality and scale of social value as part of public procurement processes
- Accelerate collaboration between central and local government, partner organisations and suppliers
- Foster innovation to identify challenges and support mission outcomes, in addition to improving commercial capability.
The results of the survey – and the policy statement as a whole – remain to be seen. However, further amendments and addendums may be included as part of wider procurement changes.
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