UK Government Publishes Response to Transforming Public Procurement Green Paper Consultation

Transforming public procurementIn December 2021, the UK Government published its response to the consultation process that followed its 2020 Green Paper on transforming public procurement in the UK.

The consultation received over six hundred submissions, demonstrating strong interest and engagement from bidding and procurement stakeholders alike. The subsequent government response shows broad support for a number of key proposals which will change the way the UK public sector buys goods and services from its suppliers.

There is a lot to unpack in the response, but some noteworthy highlights include:

Move from MEAT to MAT

The paper proposes a move away from the commonly applied ‘Most Economically Advantageous Tender’ (MEAT) to an updated ‘Most Advantageous Tender’ (MAT) evaluation, to reduce the impact that low pricing has on the overall tender outcome and ensure other criteria are considered, in addition to value for money.

This will be welcome news for many bidders’ keen to see a move away from the perceived ‘race to the bottom’ in public tendering.

However, bidders will have to consider how they will evidence performance and delivery of social value, environmental sustainability, prompt payment of suppliers and other criteria that will have increased importance under MAT.

Debrief letters  

A less welcome change, perhaps, is the proposed removal of the requirement for public authorities to issue bidders with debriefing letters, supplying feedback on their tender submissions.

This proposal relates partly to the proposed increase in transparency requirements – the thinking being that bidders should be able to compare their own tender responses with the winning bidder’s submission to draw their own conclusions.

In practice, many bidders may be left feeling confused or unsure about why their bid was not successful, without this specific buyer feedback.

Simplified Legislation and Procedures

Current procurement legislation (comprising four sets of regulations) will be replaced by a simplified, single regulatory framework for all contract awards, which will be welcome news for many bidders seeking simplicity in how contract awards are governed.

Procurement procedures will also be simplified, reducing in number from six to three: Open Procedures; Flexible Procedures and Limited Tendering Procedures.

Again, this simplification will be welcomed by many, but bidders (and buyers) will have to familiarise themselves with the new legislation and procedures to understand how they apply and how they must be navigated.

The consultation response stops short of outlining a definite timescale for the new proposals to be enshrined in legislation and implemented, but it is unlikely that any changes will come into force until 2023 at the earliest. This gives bidders good notice and plenty of time to plan for these significant changes to the public tendering landscape. The full consultation response can be accessed here.

SME engagement

An area the UK Government is focused on in 2022 is increasing SME engagement in public tendering. Each year the UK public sector tenders out £290 billion+ on buying goods and services from organisations of all sizes. SME businesses make up around 99.9% of all UK businesses and the UK Government wants £1 in every £3 of public procurement spend to go to SMEs by the end of 2022.

Achieving this would represent a huge leap from the current rate of around £35 billion (12%) to over £96 billion (33%), a jump of over £60 billion. This could be transformational for many small businesses – winning contracts from clients that provide sustainable revenue streams, fast payment and guaranteed work.

However, with the majority of UK SMEs not currently tendering at all for public sector business, and for those that are, less than half (46%) are bidding successfully for public sector contracts.

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UK Government House of Commons