The Procurement Act 2023 received Royal Assent in October 2023 and there's a lot of work to be done to understand what changes will affect bidders and contracting authorities alike. How, what and when do you need to prepare? Our series of insights on the new legislation should guide you through the key changes and issues that arise.
For those of you who have been following the progress of the legislation from its infancy in the Green Paper back in 2020 to the final version of the Act we have today, you will know that the concept of 'transparency' is fundamental to the legislation, albeit representing a change from the current regime.
The Green Paper promise was to embed 'transparency by default throughout the commercial lifecycle from planning through to procurement, contract award, performance and completion'.
Whilst that is quite a claim, for those of you who have read the Act, it won't have escaped your attention that one of the specific ways that the Government has sought to achieve that level of transparency is through the publication of a series of notices. The legislation is sprinkled with notices at every single stage.
Whilst that might be the case, the primary legislation certainly tells us when notices will be required, but the detail of what those notices should include is absent. Secondary legislation due in early 2024 should give us more information about the nuts and bolts of the notice requirements and enable public procurement practitioners to put the wheels in motion on the detail of the Government's transparency agenda.
At the same time, we await further information on the central digital platform expected to be implemented by the Government to support the sharing of information and notices, and to underpin the broader transparency objectives.
What types of notices are required?
The expectation is that notices will be required at every stage of the procurement life-cycle.
In practice, that means that the transparency regime starts even before the formal call for competition. There are provisions for contracting authorities to publish notices confirming an intention to publish a tender notice in due course, and a mandatory provision that contracting authorities publish 'pipeline notices' where they expect to spend more than £100m on public contracts in the next financial year. Planning the procurement pipeline will be key.
In a similar way to the current regime, we also see a requirement to publish a variety of notices throughout the tender process, from the initial tender notice at the outset of the procurement, right through to a notice confirming the decision about who will be awarded the contract and when.
It doesn’t stop there. We also see various requirements for information to be provided about the contract itself through a contracts details notice, confirming that the contracting authority has entered into the contract and providing key details about it. We expect that more about the 'key details' will be found in the secondary legislation in due course.
Interestingly, there is also a requirement to publish the contract itself if it has an estimated value of more than £5million. Whilst the legislation provides for exemptions to disclosure, questions have been raised about how that might work in practice.
The issue of publishing contracts is likely to need very careful consideration to strike the right balance between achieving the overarching objectives of transparency, but without providing the public – and competitors – with hook line and sinker of your contractual terms, detailed pricing and sensitive negotiation points. Will this lead to a change in the way that contracts are drafted and negotiated, making them easier to redact?
In the final stage of the procurement lifecycle, information will also need to be published around contract performance, payments, contract modifications and termination or expiry of contracts. Again, there are questions around how this will work in practice and how contracting authorities and bidders alike will get to grip with a regime requiring publication of information around contractor performance against contractual KPIs on a yearly basis.
It's easy to see the potential tension between transparency requirements on the one hand and commercial sensitivity around contract performance on the other – and this is a concern for both contracting authorities and bidders. Will we see a step change in the way that these contracts are managed in practice?
However, with the new regime, the Government's intention is to make the transparency requirements proportionate, so some of the notices are only applicable to the procurement of larger contracts. Understanding how those thresholds apply to you will be important.
What do I need to know?
Whilst the detailed information about the content of the notices will not be with us for a few months yet when secondary legislation is laid before Parliament, perhaps coupled with more detailed guidance, it remains hugely important that contracting authorities and bidders get to grips now with what the new regime will look like.
With less than a year until 'go live' date, there are key things you can do to put yourself into a good position to adapt to the new regime.
If you are a contracting authority:
- Get to grips with what notices are required and at which stage of the procurement process.
- Understand the crystallising points for certain notices – for example by contract value – and how those will form part of your procurement plans.
- Review your processes and procedures and understand how those will need to be updated to integrate and embed the notice regime within your key procurement phases.
- Consider what training your teams might need on new issues like contract publication, ensuring adequate knowledge of contract redaction and assessment of commercial sensitivity, and ensuring that these sensitive categories of information are not disclosed in error.
If you are a bidder:
- Get to grips with the noticing regime – they are there for your benefit, to increase transparency and provide you with information. Understand what you should be expecting to see in the context of your bids, and when.
- Train key staff to understand the issues that arise if contracting authorities do not provide the relevant notices, or they don’t contain the right detail, so that they know when to take advice and raise issues at the appropriate stage. We know that in challenges for breach of the procurement legislation, time is not on your side. Know what you are looking for, take advice and act quickly.
- The transparency agenda will affect you too. Start thinking now about the categories of information that you would routinely expect to be withheld from the public gaze, particularly in the context of assessing performance against KPIs and the publication of contracts. How can you use the legislation to persuade contracting authorities to redact commercially sensitive information appropriately?
- Finally, consider what training your teams might need on how the new legislation impacts you, the way that you bid for and manage contracts and how your own internal processes and procedures will need to change.
