On 6 December 2021 the government published its response to the Green Paper on proposed reform to public procurement. A link to the response can be found here.

This is the second in a series of articles which the procurement law team at Bevan Brittan LLP are producing on what the proposed reforms will mean for the public sector and suppliers. Each article will give practical commentary on the different themes within the proposed reforms.

Here is a menu of what we will be covering, with links to each Part which will become live once each Part is published:

Principles and objectives

In the second of our Road to Reform series of articles covering the Government’s response to consultation on the proposed reforms to the public procurement regime we consider the proposed new principles and objectives of public procurement and the National Procurement Policy Statement (“NPPS”).

The Government plans to revamp the principles that underpin procurement and guide the decision-making standard expected of procurement officers. The reforms will see the procurement regime move away, in some respects, from EU-derived principles and bring new concepts into the procurement sphere. Having said that this is an area of evolution rather than revolution and contracting authorities and suppliers will find much that is familiar here.

The new principles that will be embedded in the new legislation are:

  • Transparency
  • Fair treatment of suppliers
  • Non-discrimination

These will be supported by statutory objectives:

  • Public good
  • Value for money
  • Integrity
  • Promoting the importance of open and fair competition

The practical distinction between principles and objectives is not detailed in the response to the consultation paper save for the comment that the objectives will “influence decision-making in the procurement process”. This may point to an intention that the principles will bind more directly and impose harder-edged obligations upon contracting authorities but we will need to wait for the detail of the legislation.

As to the principles and objectives themselves the concept of public good seems to represent the most radical departure.

It is made up of two facets in the Government’s proposals. Firstly; procurements must draw a clear link between the objectives, outcome and anticipated benefits that underpin the decision to invest and the selection of the contracting parties to deliver. Secondly; contracting authorities are to be expected to support wider national priorities in their procurement activity.

This latter point is an example of an on-going shift in emphasis: away from just choosing evaluation criteria which relate to the price of that contract, or the quality of the actual product or service to be delivered, and towards the ability to take into account a wider holistic range of factors that are not (at first glance at least) so directly connected with the actual subject matter of the contract.

Taking the public good into account a contracting authority could (and indeed should) justify using award criteria that do not bear on the subject matter of the contract but which reflect wider policy goals. An obvious example might be the use of award criteria that reward solutions that contribute towards the drive to net zero. Adopting these more idealistic concepts may raise the question of whether or not authorities will need to look beyond simply the award stage and beyond the policy aims of the present government to understand the true scope of what could come within the concept of the public good.

However, the principles could serve as a check on the power to use the public good to some extent, for example non-discrimination derives from the UK’s obligations in international treaties not to treat suppliers from fellow treaty states any less favourably than UK suppliers. That would appear to prevent using the public good to, for example, justify the use of selection criteria to favour national champions. In any event, contracting authorities will need to think quite carefully about how they apply the principles and objectives when they are planning their procurements, to ensure that all are properly taken into account. This means that the interaction between the principles and objectives may be important.

As mentioned above, there has already been a shift in the direction of using the power of procurement to leverage wider outcomes and policy goals through the increasing use of Social Value award criteria[1]. The National Procurement Policy Statement (covered below) also represents a push in this direction, so even before the reforms are finalised and come into force contracting authorities and suppliers will benefit from understanding what is envisaged here and what is required currently.

Transparency is already embedded in public procurement and the proposals for future reform regarding transparency will be covered in section 8 of this series so is not covered here. As with transparency parts of the principle of fair treatment of suppliers will be familiar. This is intended to cover both equal treatment of suppliers which is already enshrined in public procurement and procedural fairness during procurement procedures. It will come as no surprise to contracting authorities that they must adhere to the rules they have established in their procurement procedures and apply them equally to all suppliers, just as they have to now. As such the fair treatment principle does not look to be a significant departure but further detail may yet be significant.

Value for money may also be a concept with which those involved in procurement are familiar but the proposals do represent some departures from current practice. It is already well established that lowest price does not necessarily equal most economically advantageous, but the value for money objective will require contracting authorities to ensure that their procurements enable a whole-life blend of economy, efficiency and effectiveness that achieves the intended outcomes defined at the outset. Contracting authorities will need to ensure that their evaluation criteria draw out the features of bids to enable an assessment that identifies value for money. Evaluation and the shift from most economically advantageous tender to most advantageous tender will be covered in more depth in article five in this series.

The scope of the objectives of integrity and promoting the importance of open and fair competition is not yet clear but will hopefully become so with publication of the Bill. So far as Integrity is concerned, it is not immediately clear what this will add over and above other principles and objectives. However, it may well encompass and overlap with public law obligations as to good governance, managing conflicts of interest and protecting confidential information, fair treatment and transparency. There is also limited detail about what the objective to promote the importance of open and fair competition will mean in practical terms. We are told that this will draw together a number of strands that are woven throughout the proposals so again, we wait for further detail on this.

Those involved in procurement now will note that there is no mention of proportionality a key touchstone in the existing regime. In the response to the consultation the Government confirmed that it was not completely disposing of obligations to act proportionately but instead intended to introduce it in specific regulations i.e. rather than as an overarching principle. For example timescales for procurement procedures will need to be proportionate to the cost, nature and complexity of the requirement. As such, the detailed reforms will require careful checking to ensure that proportionality is taken into account, and evidenced to have been taken into account, where necessary.

So what is the main change?

National Procurement Policy Statement

Whilst the NPPS is referred to in the Green Paper and the response to the consultation it is, in fact, already in existence has been effective since 1 June this year. Procurement Policy Note (“PPN”) 05/21 comprises the PPN itself, the National Procurement Policy Statement and an annex of related resources. It is addressed to all contracting authorities and requires them to think in terms of “readiness buckets” to prepare for the new regime now. The “buckets” are:

In terms of social value the PPN sets out specific actions which all contracting authorities should now do. This includes a requirement that all authorities should familiarise themselves now with the contents of the National Procurement Policy Statement, should consider the national priority outcomes alongside local priorities in their procurements, and consider their policies, processes and procedures to ensure that they have the right skills in place. So it is clear that authorities
must now become familiar with and start to implement the NPPS, and once the Bill is published, it will contain legislation that makes it mandatory for all contracting authorities to have regard to the National Procurement Policy Statement when
they are undertaking procurements.

The NPPS is linked to the public good objective we have examined above as it is the NPPS that will set out what those national priority outcomes that should be delivered through procurement are. The national priority outcomes are currently:

  • Creating new businesses, new jobs and new skills
  • Tackling climate change and reducing waste, and
  • Improving supplier diversity, innovation and resilience

These should be taken into account in addition to local social value priorities.

The second readiness bucket is commercial and procurement delivery. All contracting authorities should consider whether they have the right policies and processes in place to manage key stages of commercial delivery. Typically, the greater the complexity, cost and risk, the more robust and rigorous a process is required to set up, procure and manage contracts relating to it. The NPPS also requires contracting authorities to think about whether greater public to public collaboration or sharing of services, resources, pooling of buying can lead to greater efficiencies and value for money.

There is some specific preparatory work that contracting authorities should be thinking about now in order to be ready for when the new regime comes into effect:

  • Publication of procurement pipelines – these are going to have to be published annually looking forward at least 18 months but ideally 3 to 5 years.
  • Market health assessments – how can commercial strategy and contract design address potential market weaknesses.
  • Project validation reviews – for complex outsourcing there should be independent review prior to any public commitment being made.
  • Make versus Buy assessments should be carried out preprocurement to decide whether to outsource, in source or re-procure.
  • Should Cost Models to estimate the total cost of delivery and to protect the authority from low cost bias.
  • Pilots where a service is being outsourced for the first time.

Finally, the third readiness bucket is skills and capability for procurement. The key theme word from the NPPS on this third readiness bucket is “bench-marking”. Authorities should be doing a bench-marking exercise now to make sure that they have enough people, with the right skills and training, and the right systems in place to benefit from and be able to respond to the reforms. Useful further resources for those benchmarking exercises are set out in the Annex to the NPPS.

Authorities should be undertaking a capability and capacity assessment across their organisations to check pragmatic points such as:

  • Do we have enough staff in place to deliver our procurement objectives and deal with the reforms coming our way?
  • Do those staff have the right skills and training?
  • Are our governance procedures right and/or clear enough?
  • Once contracts are awarded, do we have enough people in place to manage those contracts?
  • Have we got the right procurement systems and data reporting systems in place to help us with efficiency but also to respond to the greater transparency requirements in the Green Paper?

Procurement Review Unit (“PRU”)

To conclude this section we will look briefly at the PRU which will be established to help drive up procurement standards. The powers of the PRU will be covered in more depth in section 9 but for our purposes it is worth noting that the PRU will take on the functions of the Public Procurement Review Service. It will be able to investigate and make recommendations in individual procurements. However, its more important role is intended to be in addressing systemic or institutional breaches of the procurement regulations. As such it will have access to experts to consult with and will be able to make formal recommendations. Where the PRU identifies common patterns of non-compliance which could be addressed by statutory guidance the Bill will contain the power for the Minister of the Cabinet Office to publish such guidance and contracting authorities will be required to have regard to it when exercising procurement functions under the legislation. This power to bring about statutory guidance may well mean that the PRU is a body with significant influence over the direction of the new procurement regime and tis practical implementation when it comes into being.

If you would like to discuss this topic in more detail, please contact Emily Heard, Partner, or Kyle Duggan, Associate.


[1] mandated to be evaluated in all central government procurement where the requirements are related and proportionate to the subject-matter of the contract by PPN 06/20 and increasingly prevalent outside of central government

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