Procurement regime changes moving forward
22 December 2021
22 December 2021
In December 2020, the UK Government published a green paper entitled Transforming public procurement, setting out its proposed road map for procurement policy following the Brexit transition period and inviting responses to a public consultation (see our previous legal update).
On 6 December 2021, the Government published its long-awaited Consultation Response, which summarises feedback received from over 600 respondents and sets out updates in relation to the proposals for reform. In summary:
We set out below are some of the key points arising from the Consultation Response.
The Government is going ahead with the proposal to consolidate the existing patchwork of regulations into a single framework. However, in response to feedback, the Government has confirmed that it will:
The Government proposed to redefine and expand the principles which procuring authorities would be required to have regard to during procurement exercises. However, the Government has decided to refine its approach as follows:
These reforms are ambitious and have the potential to add considerable complexity to the evaluation of tenders, rather than achieving the Government's stated goal of simplifying procurement processes. Therefore, the development of additional guidance on achieving the statutory objectives will be vital.
As regards the broader proposals to increase transparency in public procurement, the Government has recognised the need to ensure that the new requirements are proportionate and simple to implement. Therefore, the Government has indicated that it intends to issue detailed guidance to support procuring authorities with the implementation of the new requirements.
The Government has also confirmed that it intends to adopt its proposal for contracts to be awarded to the "most advantageous tender" rather than the "most economically advantageous tender". This decision should facilitate the ability of procuring authorities to have regard to the new statutory objectives.
In the Green Paper, the Government proposed to make it easier for procuring authorities to exclude suppliers on the basis of misconduct such as fraud, corruption or prior poor performance. However, in the light of stakeholder feedback, the Government has concluded that a wider refresh of the legal framework for the exclusion of suppliers is needed. The Government has signalled that it intends to introduce a simpler and clearer framework, which will focus on excluding those suppliers who pose an unacceptable risk to effective competition for contracts, reliable delivery, and protection of the public, the environment, public funds, national security interests or the rights of employees.
In addition to defining new grounds for exclusion, the Government has said that it will also make changes to the way exclusions are applied to streamline the regime. This includes two proposals which could prove controversial:
The Government had proposed to cap damages by reference to a multiple of bid costs, subject to limited exceptions. However, this proposal is not being taken forward. The Government is instead considering other measures:
The Government intends to remove the automatic suspension for challenges of award decisions in cases where "urgent contracting" is required. The Government has noted that the terms for urgent contracting need to be clear, measured and proportionate, and there will still be certain requirements that need to be followed, including the publication of notices. The remedy of ineffectiveness will, however, remain available.
The Government proposes to bring forward legislation to enact these changes "when Parliamentary time allows". Recognising the extent of the changes and the need to support procuring authorities and contractors, it also intends to produce a detailed set of resources to accompany any legislation, and to provide six months' notice before the new regime comes into force. The Consultation Response confirms that this is unlikely to be until 2023 at the earliest.
Authors: Edward McNeill (Counsel), Aaron Marchant (Solicitor)
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.