Anyone hoping for a post Brexit bonfire of the procurement rules will be disappointed. However, the Cabinet Office is proposing major changes in its Transforming Public Procurement Green Paper.
As the UK wants to remain open for international trade, the government is negotiating free trade agreements with various countries. The UK has also signed the World Trade Organisation's Government Procurement Agreement in its own right and a Trade and Cooperation Agreement with the European Union. Supplemental agreements are likely to follow. These international obligations commit the UK to public procurement rules which promote open competition, transparency and an independent system for addressing challenges.
In the meantime, transitional procurement rules were put in place before Christmas to tide us over with minor changes. For example, references to the Minister for the Cabinet Office replace the European Commission and contracts must be advertised on Find a Tender instead of OJEU.
The Cabinet Office aims to have completely new public procurement legislation in place by spring 2021.
There is already a procurement policy in PPN11/20 which allows authorities to reserve below threshold value contracts for suppliers from your county or the UK. This is a change from the previous EU non-discrimination provisions, but above threshold procurements still need to be open to tenderers from countries to which the UK has promised market access through the GPA and trade agreements.
The government wants a progressive, modern procurement regime which can adapt to the fast moving environment in which business operates. There will be one set of procurement rules for all contracts, i.e. combining the Public Contracts Regulations (PCR) with the utilities, concessions and defence regimes.
There could be a new flexible procedure that gives authorities freedom to negotiate and innovate to replace the competitive dialogue, competitive negotiated procedure and innovation partnership.
There will be an open procedure for simpler off-the-shelf competitions and a ‘limited tendering procedure’ replacing the negotiated procedure without advertisement, for use in crisis or extremely urgent circumstances.
The light touch regime will go.
Contract notices would have to include information about the specification, timelines and conditions for participating and as previously, the process would need to be consistent with information in the contract notice.
The Cabinet Office is proposing new procurement principles in law:
- public good- supporting national priorities including economic social ethical environmental and public safety;
- value for money- including whole life costings, economy, efficiency and effectiveness and achieving the business case outcome;
- transparency – openness plus accountability for public money, anti-corruption and effectiveness of procurement;
- integrity – good management, fraud and corruption prevention;
- fair supplier treatment- impartiality with no conflicts of interests; and
- non-discrimination.
There is potentially a new dynamic purchasing plus system.
A new Public Procurement Unit could review and intervene to ‘improve the commercial capability’ of contracting authorities. Also proposed is a centrally managed supplier debarment list.
What is new, is that authorities could evaluate a procurement's wider impacts such as on other contracting authorities and broader society. For councils, this could mean co-designing evaluation criteria with health and other tiers of government.
The government proposes further legislation to embed transparency which would require all authorities disclosing procurement and contract data in a format compliant with the Open Contracting Data Standard used by 30 other countries. However, authorities could withhold commercially sensitive information using exemptions similar to FOIA, EIR and DPA.
The government is proposing a register of contract performance and a register of legal challenges.
The Technology and Construction Court would hear major challenges with a tailored fast track system, but tribunals would hear smaller procurement challenges. Courts could cap procurement breach damages to the amount of the challenger's legal fees plus 1.5 x bid costs because the government believes compensating suppliers for the loss of a chance of contract award due to mistakes in a procurement process is a waste of public money.
Proposed stricter transparency requirements will obviate the need for feedback debriefing ‘Alcatel’ letters.
To address prompt supply chain payment, subcontractors in the supply chain would be able to contact the authority directly where not being paid by the main contractor.
Some ‘tidying up’ of the rules on modifying signed contracts is proposed.
However, there is nothing about in-house ‘Teckal’ companies or clarifying the status of development agreements. This is too complex probably, but it would be nice if ‘non-commercial considerations’ in s17 of the LGA 1988 were repealed- an ugly relic of compulsory competitive tendering (CCT)!
So do write in before 10th March to procurement.reform@cabinetoffice.gov.uk
Our next chance may be decades away!
Helen Randall is a partner at Trowers & Hamlins LLP
