Transforming Public Sector Procurement
The long awaited Procurement Act 2023, designed to reform the UK’s public procurement regime post‑Brexit, received Royal Assent on 26th October 2023.
The Government plans to bring the Act into force in October 2024, and will give 6 months' prior notice of the go‑live date to give contracting authorities and suppliers to the public sector time to prepare for implementation.
This article looks at some of the key changes under the new Act, and which FM suppliers to the public sector should be aware of.
Simplifying The Current Procurement Procedures
Contracting authorities will have a choice of 3 procurement procedures under the new Act – the “open” procedure for straightforward procurements, the “limited tendering procedure” for urgent procurements and the “competitive flexible procedure” for all other procurements. Under the latter, contracting authorities will have flexibility to shape their procurements in a more proportionate manner to reflect the nature, value and complexity of each contract opportunity. The Government intends to issue guidance on how these procedures may be structured. It has hoped that the introduction of this new procedure will help streamline public sector procurement processes and reduce the costs involved to suppliers in participating in them.
Increased Transparency
Contracting authorities will be obliged to share the winning bidder’s evaluation documents with the unsuccessful bidders, which is a greater level of disclosure than applies currently.
In addition, authorities will be required to publish a copy of any contract they award with a value of more than £5 million (with any commercially sensitive information redacted). Authorities will also be required to publish details of the supplier’s KPI performance under such contracts on an annual basis. The intention being to provide greater transparency regarding how suppliers are performing on high value public sector contracts.
Supplier Exclusion
The Act provides updated grounds for exclusion of suppliers from procurement processes, together with the introduction of a debarment register to list suppliers excluded for serious breaches. Of particular interest to suppliers may be the additional discretionary grounds which give an authority the right to exclude a supplier that has breached a previous public contract which resulted in contract termination, the payment of damages or a settlement agreement being entered into between the contracting parties. The new Act also gives authorities the ability to apply the exclusion grounds to “connected” entities such as the supplier’s sub‑contractors.
Greater Scope For Modifying Contracts
The new Act will give authorities greater flexibility to modify existing contracts with suppliers without having to put them back out to competitive tender. The Act widens the grounds on which modifications can be made including new grounds for urgency of the protection of life, to deal with the “materialisation of a known risk” or to secure any developments in technology in defence contracts, in addition to grounds which broadly correspond with the current permitted grounds under the existing legislation. Authorities will, though, be required to publicise the majority of changes prior to implementation through the increased use of contract change notices.
Remedies For Aggrieved Suppliers
The remedies available to aggrieved suppliers under the new Act will essentially be the same as they are currently – namely an injunction to put a halt on the procurement process, a damages claim for wasted tender costs and/or loss of profit, and in the most serious cases an action to have the contract between the authority and the successful supplier cancelled.
The Government will be publishing secondary legislation between now and October 2024 to provide further clarity on some of the more operational aspects of the new Act, which is likely to be of particular practical interest to suppliers’ bid teams.
