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 fifth 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:
- Section 1 - An overview
- Section 2 - Principles and objectives, the National Procurement Policy Statement and the PRU
- Section 3 - Single set of Regulations with exemptions, interface with health procurement, light touch regime and concessions
- Section 4 - New procedures, including for urgent procurements, emphasis on pre-market engagement and planning
- Section 5 - Evaluation (MAT not MEAT), links to NPPS and other legislation
- Section 6 - Exclusion: grounds for exclusion, debarment register, past performance and supplier registration system
- Section 7 - Purchasing tools – new DPS+, new rules for open and closed frameworks
- Section 8 - Transparency – notices, debriefing, what has to be published and Open Contracting Data Standard
- Section 9 - Remedies: reforms to Court process, no independent review up front by the authority, disclosure, new test for automatic suspension, no cap on damages, no tribunal and alternative route via PRU
- Section 10 - Contract Management: prompt payment, amendments to contracts after signature
From Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT)
New legislation will capture the requirement for contracting authorities to award contracts on the basis of Most Advantageous Tender (MAT), rather than Most Economically Advantageous Tender (MEAT).
The government concedes that it is reinforcing and adding clarity to encourage broader considerations of value rather than changing the scope of the current principles.
Under the current procurement rules, the economic component of MEAT focuses on cost effectiveness, particularly in its ratio with quality.
The use of MAT is aimed at encouraging and giving comfort to contracting authorities in taking on social and environmental considerations.
But what will that mean in practice?
Contracting authorities are able to consider broader notions of value under the current procurement rules, therefore the introduction of MAT is more of a cultural and perspective shift.
Value for money will remain a dominant focus for contracting authorities and the new legislation will retain the requirement that award criteria must be linked to “the subject matter of the contract” (Regulation 67(2) Public Contract Regulations 2015).
Requiring the award criteria to be linked to “the subject matter of the contract” is an important transparency safeguard in the procurement rules to prevent irrelevant considerations being taken into account in determining the winner.
Exceptions to the requirement for award criteria to be linked to “the subject matter of the contract”
Nonetheless, the new legislation proposes to introduce a power for a Minister of the Crown to make secondary legislation that will allow award criteria to be set that breaks the link with the subject matter of the contract.
This will enable a supplier’s adherence to government policies such as the Net Zero policy, to be assessed by evaluating a supplier’s track record in meeting environmental targets across its whole business and not just its environmental performance relating to the immediate procurement.
Safeguards will be put into place in that the criteria approved by the Minister will need to be implemented strictly and contracting authorities will not have independent abilities to choose to break this link.
There will also be overriding requirements for contracting authorities to comply with principles of non-discrimination, transparency and fair treatment in the conduct of the procurement procedures.
There are concerns that the use of MAT and the alignment of award criteria with policy objectives which go beyond the subject matter of the contract may pose barriers to competition for SMEs. They may not have the capacity, capability nor economies of scale to be competitive against larger suppliers when it comes to social value and environmental outputs. The government intends to address these concerns by requiring award criteria to be proportionate to the contract being procured.
Where the unlinking of award criteria to the subject matter of the contract is sanctioned by the Minister, contracting authorities will need to be careful to stay within the boundaries of that authorisation. Nonetheless, it does provide a route for enhanced environmental and social value outcomes to be achieved which were not previously possible.
Contracting authorities will need to be discerning in the manner in which this flexibility is used and consider whether it helps achieve the right balance between contract price and improved outcomes or whether the flexibility will unintentionally limit the range of competitive providers and increase costs.
Evaluating from a wider point of view
Whilst the evaluation of tenders is currently understood to be taken from the contracting authority’s vantage point, the new legislation will make clear that a broader perspective can be taken into account in terms of benefits or costs for the contract users. This can already be done under the current procurement rules as the performance of a tender with regard to service user benefits is a relevant consideration that can be taken into account. However, this wider point of view will provide contracting authorities with greater assurance which will be a welcome addition to the range of tools available for conducting public procurement exercises.
If you would like to discuss this topic in more detail, please contact Isobel Williams, Solicitor.