The Cabinet Office has recently released its Green Paper outlining proposed changes in public procurement now that we have left the EU. This is a unique opportunity to remould the public procurement process in the UK and show that we are open and ready for business post-Brexit.
Certain changes have already been introduced e.g. the requirement to publish in Find a Tender rather than EU’s Official Journal. We will now outline some of the major proposed changes and their potential impact on public procurement in the UK.
Changes to regulation
Although the UK is no longer subject to EU procurement law, it is still subject to the WTO’s Government Procurement Agreement (GPA). This somewhat limits the scope for legal reform. However, the Government is proposing several changes including the repeal of most existing regulations such as the Public Contracts Regulations 2015 and the Utilities Contracts Regulations 2016. These would be replaced with a single set of regulations covering all contracts. Until the regulations are officially repealed and replaced, current procurement, TUPE and EU-based regulations still apply.
The proposed changes are not planned to extend to other legislation such as the Social Value Act – this may be a missed opportunity to fully consolidate procurement legislation.
Any new legislation is proposed to be underpinned by six core principles:
- Public good
- Value for money
- Transparency
- Integrity
- Fair treatment of suppliers
- Non-discrimination
This reflects an increased focus by the Government on social value in procurement.
Changes to award procedures
This is perhaps the most significant proposed change which will have a direct impact on bidding. Instead of the current 8 public solicitation award procedures, the Green Paper suggests only having two: the existing Open Procedure (which will also be made available for defence and security contracts) and a new Competitive Flexible Procedure which will replace the other current procedures.
The Competitive Flexible Procedure will be available for all types of procurement and offers great flexibility in approach e.g. it can be conducted like a restricted procedure, a competitive dialogue and so on. It can also be conducted in an ‘open’ form to allow for discussions between contracting authorities and bidders before any qualification process.
For tenders not requiring public solicitation, a new procedure called Limited Tendering is proposed. It remains mostly similar to the old procedure but now includes a provision to be used in cases of ‘crisis’ as declared by the Cabinet Office to allow for rapid response to unforeseen events – a significant change in a time when COVID-19 necessitated extensive hasty procurement (much of it unregulated). The Green Paper does propose that a notice must be published before the Contracting Authority enters into the directly awarded contract, though the 10-day standstill period will be waived in cases of crisis use.
Changes to selection criteria
In order to simplify processes, the Green Paper proposes to have bidders submit basic information via a central online database that is fully accessible to contracting authorities. This is intended to cut down on the time-consuming and repetitive process of completing selection questionnaires for each bid and ensure transparency by making the same information available to all entities.
Changes to exclusion criteria and poor performance
The Government is proposing new mandatory exclusion criteria relating to fraud, as well as the potential to create a centrally managed list of banned suppliers. However, this would be a costly and complex undertaking so is unlikely to be pursued. Additionally, adding to the exclusion list instead of simplifying it may add needless complexity.
It is also proposed that KPI performance for individual contracts be published on a central database so that contracting authorities can potentially exclude bidders based on poor performance even if the contract was not terminated. This is another example of how the Government is trying to increase transparency in the procurement process.
Changes to award criteria
The Green Paper proposes to change the Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT). This is intended to reflect that a wider range of non-economic factors such as social value should be taken into account. Contracting authorities will also be able to evaluate tenders by their wider benefit and impact on other entities. This should give more flexibility to contracting authorities but is currently not clearly defined. Further guidance has been promised.
Changes to Dynamic Purchasing Systems (DPS) and Framework Agreements
Changes to these systems are intended to make them more flexible. The Green Paper proposes the introduction of a tool called DPS+ with no maximum time limit which can be used for all types of procurements. It also suggests relaxing framework rules into two options: a framework up to four years which is closed to new suppliers; and an open framework of up to 8 years with an initial three-year closed period. While more flexibility is attractive, these proposed changes may make the system more complex without offering clear benefits.
Changes to feedback process
One of the changes proposed is that contracting authorities be required to publish ‘basic disclosure information’ about the procurement with the contract award notice before the contract can be awarded. This will include the identity of the bidders, the evaluation reports and the basis of the award decision. It will not include bidders’ finances, intellectual property, trade secrets or any personal data. As a result, contracting authorities will no longer be required to provide individual feedback letters to bidders. Bidders will need to develop their own feedback based on the information available. Any reductions in either transparency or the levels of feedback being provided to suppliers would be viewed by many as a retrograde step.
Thoughts
The Green Paper focuses on increasing transparency and flexibility in the procurement process, but some of the proposed changes may introduce burdens to Contracting Authorities and bidders without delivering enough benefit to offset these. More clarity about the intended changes is needed to make an informed assessment about them.
Make your opinion heard
AM Bid is engaging with APMP UK to shape and inform the bidding profession’s response to these proposed changes.
While there is no specific timetable for new legislation, the closing date for general consultation on the new Green Paper is 10th March 2021. It is suggested that when submitting a reply, be as specific as possible about what you view as good points, potential problems and their effect on your business.
The Green Paper is available at: Transforming Public Procurement (publishing.service.gov.uk)