As the Procurement Bill (the Bill) makes its way through Parliament, there is much that housing associations can be doing now to prepare themselves for the upcoming reform to the public procurement regime.
The Bill had its third reading and Report Stage in the House of Commons on 13 June 2023 where it passed with amendments. Following a potential period of “ping pong” debate between the House of Commons and the House of Lords on any finer points of amendment, the Bill is expected to gain Royal Assent in summer 2023.
Housing associations should note that, whilst the Bill is expected to obtain Royal Assent later this year, the new rules themselves will not come into force immediately. Instead, there will be a six month “go live” period in which to transition into the new regime after some of the necessary secondary legislation has been implemented. Given this, whilst the Bill is not expected to be fully in force until October 2024 at the earliest, there are things that housing associations should be doing now in preparation for the new rules:
Understand changes in terminology
Whilst many of the concepts under the Bill remain similar to those that we are already used to, there is a significant shift in language and terminology (with a departure from pretty much all of the European concepts and terms). It is therefore sensible to get to grips with these changes in terminology now. There are some simple updates (for example, “Contract Notices” are now “Tender Notices”), but housing associations will also need to understand new concepts such as “Covered Procurement”.
There are also some terms that remain under the Procurement Bill, but which now have different meanings. For example, “Contract Award Notices” remain, but are now notices to be published after the contract has been awarded, whereas a “Contract Details Notice” must be published prior to the contract being entered into.
Some time spent now getting used to the new and updated terminology will pay dividends when the new regime is in force.
Learning & Development programme
Housing associations should also keep themselves apprised of future updates from the Cabinet Office regarding the extensive Learning & Development programme that will be rolled out to facilitate the new regime as part of the “go live” period. The Learning & Development programme will be a government funded programme available to all contracting authorities (including housing associations) with a range of training aimed at different levels within organisations, including:
- Knowledge drops;
- Self-guided e-learning;
- Full day instructor-led advanced learning; and
- Communities of Practice.
The training is intended to help contracting authorities prepare for the new Procurement Act and the changes to the regime, and it is worth identifying now who will benefit from attending the various know-how sessions, and enrolling on the relevant programmes as and when they become available. If you are not already in touch with the housing sector’s Single Point of Contact with the Cabinet Office for the learning and development programme and communities of practice, please contact John Wallace, Director of Procurement at Clarion Housing Group.
Assess internal resource and capability
In line with the Learning & Development programme, housing associations should take stock of their internal resources and capability, and identify where there is room for additional resource or skills development. This aligns with the principles already set out in the National Procurement Policy Statement.
Ensure up-to-date contracts register, identify anticipated spend, and plan pipeline of upcoming procurement requirements
Whilst the new regime is designed to provide additional flexibility for contracting authorities, the quid pro quo is an enhanced transparency regime.
In particular, housing associations who anticipate that they will pay more than £100m under public contracts in the next financial year will be required to publish a pipeline notice setting out details of any contracts with an estimated value of more than £2m which they expect to advertise in the next 18 months. There will also be enhanced obligations for contracts above £5m in value, including a requirement to publish redacted copies of those contracts with the Contract Details Notice.
Additionally, for all public contracts, housing associations will need to publish Contract Termination Notices when a contract comes to an end (either due its natural expiry, early termination, or by agreement between the parties).
It is clear from these requirements that housing associations will need to have a detailed understanding of what they expect to procure over the coming years (including their anticipated spend) and when contracts are due for renewal, and it is advisable to spend some time now ensuring that contracts registers and plans for upcoming procurement activity are up to date to ensure that your organisations know what is on the horizon.
Consider internal contract procedure rules
Finally, it is worth revisiting existing Contract Procedure Rules and Standing Orders to identify where updates may be required to align with the new regime. A useful starting point may be the procurement procedures to be adopted for different values of contract opportunity, recognising the increased flexibility afforded to contracting authorities in terms of how they can structure procurements under the new Competitive Flexible Procedure.
Further guidance on the use of the Competitive Flexible Procedure is expected from the Cabinet Office in due course, and housing associations may want to give some thought now as to how they can design their own procedures in a way which will work best for their organisation (for example, will there be certain types of procurement where an element of dialogue / negotiation will be particularly useful?).
Whilst there is still some time under the existing regime, there is much to do to get ready for the Bill, and housing associations should be acquainting themselves now with the new regime to ensure they can hit the ground running when the full force of the Act hits.
