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Breaking Down the Procurement Bill: What it Means for Suppliers and Contracting Authorities

What is the Procurement Bill and what is it replacing?

The Transforming Public Procurement Programme will see the existing EU-based laws replaced by a single Procurement Bill which aims to make procurement simpler, more transparent and easier to navigate.

At over £300 billion each year, public procurement is the largest area of public spending, so the proposed reforms are an important upcoming change.

What existing laws is the Procurement Bill replacing?

Currently, there are four sets of laws in place – Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016, and Defence and Security Public Contracts Regulations 2011 – which will be consolidated to remove overlap and create a regime that is better suited to the needs of the UK.

This regime is based on value for money, competition and objective criteria in decision-making, placing public benefit, integrity and transparency at the heart of the procurement system. In doing so, the government hopes to open up more procurement opportunities for small businesses.

How will the Procurement Bill change the tender process?

Central to the streamlined and unified approach is the replacement of five existing competitive tendering processes with two new processes.

The first is a single stage tendering process without restrictions on who can submit bids and the second constitutes any other competitive tendering procedures that the authority deems appropriate.

This includes the introduction of the ‘Competitive Flexible’ procedure, which ensures that contracting authorities can design a competition to best suit the particular needs of their contract and market. The ‘Competitive Flexible’ procedure will function alongside the existing ‘Light Touch’ regime for certain social, health and education services.

Direct contract awards will continue to be allowed in a limited number of circumstances, with new rules governing the award of contracts to protect life and public order. Improved regulations regarding emergency procurement will also ensure that contracting authorities can efficiently procure vital goods and services with less reliance on direct awards.

Another key element of the reform is the creation of a centralised digital platform for suppliers to register their details once for use in any bids, whilst an online transparency platform will provide a single space for all opportunities to be listed.

Which parts of the UK will be affected by the Procurement Bill?

The Bill is large and complex, made up of 124 clauses arranged over 13 parts and 11 schedules.

These rules will cover contracts awarded by most central government departments, their arm’s length bodies and the wider public sector, including local government and health authorities.

The changes will apply to England, Wales and Northern Ireland, whilst the Scottish Government has opted to retain their own similar but separate regulations.

How will the Procurement Bill impact reporting and transparency?

Running throughout the Bill is the aim to embed transparency across the procurement process, with three core transparency reforms:

  • The introduction of new procurement notices covering the entire commercial lifecycle.
  • The provision of a registration service for suppliers to input their information.
  • The creation of a digital platform to display all information publicly.

 

The transformation includes an emphasis on transparency from the pipeline stage through to the contract end, with specific reporting requirements for the planning, tender, award and implementation of a contract.

Under these regulations, large contracting authorities will be required to publish pipeline notices for all opportunities worth over £2M within the upcoming 18 months.

What does the Procurement Bill mean for me?

How will the Procurement Bill affect small businesses?

The Bill has been developed with a focus on benefiting SMEs and lifting the barriers they face in winning public contracts.

A new duty will require contracting authorities to consider SMEs and, in a concerted effort to accelerate spending, the regulations will ensure 30-day payment terms on a broader range of contracts.

The digital platform will help enable cheaper and easier access for small businesses by eliminating the time-consuming process of registering for multiple platforms, as suppliers will only need to provide their details once to cover all future bids.

By providing increased visibility of procurements plans and facilitating better market intelligence data, the platform will allow SMEs to be proactive in finding opportunities.

How will the Procurement Bill affect Contracting Authorities?

The simplified regime is also designed to be beneficial to contracting authorities, providing access to a diverse range of suppliers through a more efficient procurement process.

In particular, the ‘Competitive Flexible’ procedure grants the authority more autonomy and flexibility in developing a procurement procedure and negotiating with suppliers.

Though contracting authorities will have an increased responsibility for publishing details of upcoming procurements and existing contracts, the Bill’s transparency reform will likewise result in greater transparency on the performance of suppliers through a new ‘debarment register’.

This means that buyers will have the ability to exclude suppliers who have underperformed on other contracts, ensuring a higher quality of service and a better value for money.

What progress has been made and when will the Procurement Bill come into effect?

Significant progress has been made on developing the Bill since the Green Paper was published in December 2020.

The Bill is currently going through the Houses of Parliament, having started in the House of Lords in May 2022 and now made it to the Committee stage of the House of Commons.

Once the Bill has been enacted into law, there will be a minimum of six months advance notice before it comes into effect.

At this stage, the earliest estimated approval date is early 2024, providing plenty of time for suppliers and contracting authorities alike to prepare.

 

Register for our webinar with Martin Traynor OBE, the Cabinet Office’s SME Crown Representative: 

How the Procurement Act 2023 Transforms Your Ability to Win Public Contracts – Oxygen Finance (oxygen-finance.com)

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