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Will the new UK Procurement Bill truly transform public procurement?

  • Northern Ireland

    18-05-2022

    After a false start last year, the much anticipated Procurement Bill was introduced to Parliament last week, only a day after it featured in the Queen’s Speech. One of Boris Johnson’s ‘Brexit bonanza’ bills, the speed with which the Bill has hit the House of Lords for its 1st reading demonstrates its flagship nature and the prominence that the Government has placed on the Bill as part of its agenda to seize on the perceived opportunities of Brexit.

    On an initial reading of the Bill there are a few surprises in the proposed legislation which could mean that the Bill becomes bogged down in Parliamentary process, as the Lords and Commons seek to amend the detail.

    As those that have been following the Government’s ambitions for Transforming Public Procurement will know, the Bill is the culmination of a Green Paper consultation process which formally commenced in December 2020. That process was completed in December 2021 with the Government’s response to the Green Paper consultation. We largely welcomed the Government’s consultation response, as it demonstrated that in key areas the Government had listened to the feedback and showed an ambitious and welcome set of proposals for change. It’s therefore perhaps unexpected that some of the apparently settled positions included in the consultation response appear to have been changed in the Bill. The reasons for this change of policy direction are unclear and may emerge during debates on the Bill.

    Our headline observations on the Bill include:

    • As expected, the language used by the drafters of the Bill is much more user-friendly than was previously the case with drafting that had resulted from lengthy and complex negotiations amongst EU member states. This is a welcome change, and one that will demystify public procurement and make it more accessible.
    • That change in linguistic approach has, though, impacted on many of the key concepts and definitions that authorities and practitioners were familiar with. As is so often the case, the devil is in the detail and so understanding any nuances in e.g. the definition of “public authority” or “public contract” or the new definition of “complete work” will be important.
    • The Bill is also comprehensive and contains detailed rules in respect of procurement processes, although it does make provision in a number of important areas for Ministers to table secondary regulations. In these areas, including notably the use of a ‘specified online system’ for the conduct of procurement processes, the Government will have more time to work out its approach and allow greater flexibility for future changes.
    • The Bill’s approach to the ‘principles’ of procurement law appears somewhat unclear. Part 2 of the Bill is titled “Principles and Objectives”, and whist the latter concept is defined in section 11, the former is not. On a reading of the Government’s consultation response, this appears to represent a shift as there was a clear focus there on the principles of transparency, non-discrimination and fair treatment of suppliers. These concepts do appear throughout the draft legislation but with far less prominence than might be expected.
    • The much promoted ‘competitive flexible procedure’ appears to have been demoted somewhat and is now the snappily named ‘competitive tendering procedure other than an open procedure’. In the consultation response, the Government promised guidance on what this procedure would entail, which will no doubt be eagerly anticipated by contracting authorities and bidders alike.
    • The requirements around the transparency of award criteria appear to provide a good deal of discretion to contracting authorities. In terms of describing the importance of the award criteria to be used, authorities can use weightings, ranking or “by describing it in another way”. This latter approach is certainly a significant departure from current practice, and without further guidance on what this means in practice we may see increased challenges.
    • The proposed rules on ‘open frameworks’, which were the subject of heated debate through the consultation process, don’t appear to offer any silver bullets. Whilst the open framework does appear in the Bill, it essentially seems to be a series of frameworks where existing providers are in practice required to re-bid if they want to keep their place.
    • The test for lifting ‘automatic suspensions’ arising as a result a procurement challenge will still involve an assessment of the adequacy of damages for a challenger. Many practitioners’ noted in response to the Green Paper the difficulties with this aspect of the current test and the impact that it had on the number of challenges which proceeded towards a damages hearing (sometimes resulting in the authority paying twice for the contract in question). The Government’s consultation response appeared to suggest that this limb of the test would be removed, but that is no longer the case.

    At 122 pages long, with 116 operative provisions and 11 Schedules, there’s a lot of detail to work through. The headlines above represent our initial thoughts on some of the key topics. We wait to see to what extent the Bill is amended as it passes through Parliament; however, if what is given Royal Assent at the end of the process is even largely in line with the initial draft, it’s clear that procurement practice in this country will change quite significantly. A good deal of this change will be for the better – and result in more flexible, streamlined and fairer procurements. However, some of the changes, including those that have appeared after the Government’s consultation response, may be more difficult to implement and result in increased legal challenge as authorities and bidders alike seek clarity on their meaning.

    We will be providing updates on the Bill as it progresses through Parliament and what the changes will mean in practice for both the public and private sectors. If you have any questions about the changed proposals, please get in touch.

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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