In-house Insights: Procurement

In the third of our series of six “In-house Insights” webinars Fran Mussellwhite and Helen Feinson consider some of the key issues within the Procurement Act 2023 that is due to take effect from October 2024. The session includes (i) an update on the background to the Act and the current position, (ii) changes to how procurements will be run in terms of procedures and award criteria, (iii) a summary of the new transparency notices that authorities will be required to (or will have the option to) publish, (iv) the new rules around contract management and performance, and (v) an explanation of what will be required in terms of management of conflicts of interest.

Watch the webinar here.

Key takeaways:

The Procurement Act 2023 is due to come into force in October 2024 following a formal six-month preparation period due to start in March.

The related secondary legislation is still to be finalised, but is available in draft. The draft Transparency Regulations are in particular worth reviewing at this stage to understand the level of information that will need to be included in future notices.

The Central Digital Platform for suppliers is due to be available before the Act comes into force. Suppliers will need to access this and upload their information to be able to bid in procurements from October 2024.

Authorities will be able to use one of two procurement procedures for competitive processes: Open Procedure and Competitive Flexible Procedure. Direct awards will be available if the justifications in Schedule 5 of the Act are met (or where the direct award is being made in order to protect life). Authorities and suppliers should familiarise themselves with the new terminology and timescales, and ensure policies and processes are updated accordingly.

The number of notices that must or may be published by authorities in respect of procurement plans and decisions will significantly increase. While this means greater transparency for suppliers, for contracting authorities it means that work needs to be done in the lead up to October 2024 to ensure procurement teams are aware of their obligations.

Some notices in particular will require forward planning at this stage. For example, the Pipeline Notice (s.93) will require authorities to set out details of their plans to procure any contract with a value of over £2m over the next financial year provided they are due to spend over £100m in total on public contracts (although it does appear that this duty will only be triggered by the financial year commencing, and the notice will need to be published within 56 days of that date).

The Cabinet Office will be producing precedent notices for use by contracting authorities.

Contract management will be regulated to some degree by the Procurement Act 2023 and good contract performance will become significantly more important to suppliers’ ability to win future contracts. For all contracts with a value over £5m, authorities will have to set and publish three KPIs and then publish their assessment of compliance with these KPIs at least annually in a Contract Performance Notice.

In addition, under s.71(5), authorities will have to publish any instances of sufficiently serious breach of contract or performance failure by their suppliers for any regulated public contract (except Light Touch contracts).

Other authorities will be able to exclude bidders from procurement processes if a s.71(5) notice has been published in respect of any other contract and that authority considers that the circumstances giving rise to the exclusion ground are likely to occur again.

There will be an obligation on authorities to identify any potential or actual conflicts of interest in relation to a procurement and to take reasonable steps to mitigate these. This could include requiring a supplier to take steps to mitigate conflicts.

The conflict of interest rules will also cover any person acting for or on behalf of a contracting authority, including a person who influences a decision made by or on behalf of a contracting authority.

Authorities will be required before advertising a contract to prepare an conflicts assessment, which will then need to be kept under review and updated throughout the life cycle of the contract.

If you’d like further information about the Procurement Act 2023, our Talking Heads series is a good starting point, or feel free to contact any of our procurement specialists who will be happy to help. The Cabinet Office is also regularly publishing information on its website.

Watch the webinar here.