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Government Set To Transform Public Procurement Processes

In an attempt to make the process simpler, more flexible and speedier, the Government has clarified and set out further changes to the public procurement processes within Transforming Public Procurement: Government response to consultation.

The response to consultation stemmed from a green paper (Transforming Public Procurement) published in 2020 and subsequent consultation with relevant stakeholders. Although various aspects of the legislation will remain unchanged (including what constitutes a public contract and contracting authority), some key proposed changes are as follows:

  • streamlining the regulations and consolidating them into one place, to make them easily accessible;
  • implementing new procedures to take into account the type of competition;
  • shifting away from ‘Most Economically Advantageous Tender’ to ‘Most Advantageous Tender’;
  • refreshing the provisions dealing with excluding suppliers; and
  • establishing a government procurement unit.

The new legislation will create a single, simpler legal framework and be underpinned by six core principles: public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination.

As part of this, the Government proposes to overhaul the procurement procedures themselves into three new procedures:

– a flexible competitive procedure, to encourage negotiation and innovation by giving contracting authorities more autonomy to produce their own tender processes;

– an open procedure for simple ‘off the shelf’ competitions, in line with the current open procedure; and

– a limited tendering procedure (previously known as the negotiated procedure) for use in certain circumstances, such as extreme urgency or crisis.

The light touch regime will no longer be scrapped as originally envisaged but rather will be retained with “improvements to its scope and application”.

In addition to the new procedures, the Government propose to change of emphasis of award criteria from the current ‘Most Economically Advantageous Tender’ to a ‘Most Advantageous Tender’ empowering buyers to consider, more fully, other value a tender could create, such as social value and environmental impact. The proposals also take into account the role of SMEs outlining that award criteria will need to be proportionate to the requirements of the contracting authority (i.e. so as to facilitate more SME engagement).

Another shift in approach can be seen in the grounds for excluding suppliers – the current approach of mandatory and discretionary exclusions grounds will be retained but with a focus on suppliers who pose an unacceptable risk in areas such as, public confidence, the environment, national security and rights of employees. Additionally, past performance will become a discretionary exclusion ground taking into account historic breaches of contract.

Finally, the Government proposes to have a Procurement Review Unit within the Cabinet Office, which will focus on systematic breaches of procurement regulations and investigate poor policy and general

compliance with the new regime. As well as these new objectives, it will essentially take in the work of the current Public Procurement Review Service.

The proposals stated above are subject to change whilst the Government works to finalise the new procurement regime. The Government plans to give a minimum of six months’ notice before going live with these changes but cannot yet confirm the start date of the new procurement regime. However, it is understood that this will not be until 2023 at the earliest. The existing legislation will apply until the new regime goes live and will continue to apply to procurements started under the old rules.

Government Guidance for SMEs contracting under the current public procurement processes

The current rules will remain in place until the Government confirms the implementation of the new procurement processes and, helpfully, the Government published a short guide designed to support and encourage SMEs in bidding for and winning government contract opportunities.

This includes guidance on:

  • working with the Government, finding potential government contracts and how to use the online portal;
  • preparing your business for submitting a tender and meeting the brief; and
  • the processes in place to support SMEs.

In addition to including responses to FAQs, the guide also includes 10 top tips for tendering, such as how to find tenders, assessing whether to submit a bid, what to include in your submission and how to improve if a bid fails.

We would encourage any SMEs to review the guidance before getting involved in the public procurement process and reviewing a tender / submitting a bid.

Our Commercial Contracts team has experience of advising on both sides of Public Procurement arrangements and so please contact us if we can be of any assistance.