The Procurement Bill – What’s New?
Leaving the EU provided the UK with the responsibility and opportunity to overhaul the public procurement regulations. The Procurement Bill is intended to shake up how the public sector procures its strategic goods and services, making it quicker, simpler, and more transparent.
The wide-ranging changes encompass new procurement processes, greater transparency, a renewed focus on social outcomes, supply chain engagement, and new obligations for organisations bidding in the public sector.
Though the Bill aims to simplify the process for all involved, there will undoubtedly be some confusion over the changes, particularly in the early transition period, so it is vital that suppliers take the time to understand the proposed changes now to ensure they are able to bid with confidence under the new regime.
A simplified procurement process
The Procurement Bill is intended to consolidate the 350+ different procurement regulations that are currently in operation into a single regime that is quicker, simpler and better meets the needs of the UK. This extends to defence and security contracts, except for a limited number of derogations, such as to protect national security.
The Bill will also enable the creation of a single digital platform for suppliers to register their details once for use in any bids, while a central online transparency platform will allow suppliers to see all opportunities in one place. Related, the Bill introduces a central public debarment list for serious cases of misconduct, making it easier for contracting authorities to reject bids from suppliers which pose unacceptable risks.
The Bill sets out a small number of simpler rules which apply to lower value contracts and also makes provision to carve out those procurements regulated by the Health and Care Act, to ensure clarity about which regime applies.
Transparency for flexibility
Running throughout the Bill is a sort of quid pro quo – transparency for flexibility. Transparency comes in the form of the requirement for Buyers to publish transparency notices at each stage of the procurement process from preliminary market engagement, and including any time there was a change to the procurement.
This is to ensure that procurement information is publicly available not only to support effective competition, but to provide the public with insight into how their money is being spent. In return, Buyers will have more flexibility under the new regime, in the form of a new procedure for running a competitive tendering process, the “competitive flexible procedure,” to ensure that contracting authorities can design a competition to best suit the particular needs of their contract and market.
Additionally, there will continue to be a special regime for certain social, health and education services which may be procured as ‘Light Touch Contracts,’ leaving room for authorities to design procurement procedures that are more appropriate for these types of services.
MEAT to MAT
One of the core aims of the bill is to move away from the ‘race to the bottom’ mentality, where bidders price their bids cheaply in order to undercut their competition, rather than reflecting the real cost of delivery. In that spirit, the Bill has replaced the Most Economically Advantageous Tender (MEAT) with Most Advantageous Tender (MAT).
The removal of the word ‘Economically’ is expected to broaden the criteria that contracting authorities can use when assessing tenders, rebalancing cost-effectiveness and other criteria, particularly for contracts where quality and safety are paramount. While value for money will remain the highest priority in procurement, the Bill will require buyers to take account of national strategic priorities such as job creation, improving supplier resilience and tackling climate change.
This has the potential to be game changing, specifically for SMEs who historically have been unable to compete with larger organisations on price, however we don’t yet know how this is expected to work in practice. For instance, how do you assess which tender is the most advantageous without taking price into account?
One suggested implementation is the use of ‘Average Value Pricing’ assessment criteria, wherein a Tender could get full marks if their pricing is within or below the average cost submitted. However, this is not mandated by the bill, and it remains to be seen to what extent individual Contracting Authorities will interpret and embrace the change.
Reaction to the Bill has been largely positive, and it has achieved cross-party support, though most outside observers agree that it is early days and though the aspirations are welcomed the devil will be in the detail, and at 122 pages long there’s a lot of detail to work through.
Even at this stage, the Bill is not without its critics, including those who feel some of the changes to definitions will likely cause confusion to both Buyers and Suppliers alike. The Scottish Government has opted to retain their own procurement regulations, in line with the current EU rules, this means Suppliers who operate across the UK will effectively have to learn to work under both systems.
The Bill is currently at committee stage in the House of Lords and is expected to be debated over at least the next six months, allowing plenty of time to iron out these issues, including the publishing of a raft of secondary legislation to fill in the details of the Bill.
After this, 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. This includes a Learning & Development Programme covering an overview of the changes through to more detailed learning focussed on the behavioural and cultural changes required.
Until then, the best decision you can make for your bidding function is to nominate a member to stay up to date with the changes. We at AM Bid will do our best to keep you informed as the situation develops.
The Procurement Bill in its current iteration is available here.