The Procurement Bill: Competitive procedures reform explained

This is the second instalment in our series looking at some of the key changes proposed by the Procurement Bill (the Bill). This article addresses the proposed changes to the criteria against which tenders will be assessed and awarded, as well as the proposed changes to the ways in which competitive procedures will operate.  

Competitive awards - from MEAT to MAT

A fundamental change proposed by the Bill is a shift in the way in which tenders should be assessed and awarded.

Under the current regime, tenders must be awarded to the "most economically advantageous tender" (MEAT). These tenders are identified on the basis of price or cost and may include the best-price quality ratio which is assessed on the basis of criteria such as qualitative, environmental and/or social aspects.

S19(1) of the Bill instead requires that tenders are awarded to the "most advantageous tender" (MAT). MAT is defined as the tender that the contracting authority considers satisfies the contracting authority's requirements and best satisfies the award criteria.

What has prompted this change?

The shift from MEAT to MAT represents a closer alignment with the World Trade Organisation's Agreement on Government Procurement (GPA). Except in circumstances where price is the sole criterion, the GPA requires a public contract to be awarded to the supplier that has submitted the “most advantageous tender”.

The proposed change also gives effect to the Government's desire, as vocalised in the Green Paper, to reassure contracting authorities that they can consider a broader spectrum of issues in identifying value for money. Doing so should also help bolster other key items on the Government's agenda, including levelling up and environmental pledges.

What is the practical impact?

The shift from MEAT to MAT will allow contracting authorities to set wider criteria for assessing tenders, recalibrating the balance between price/cost and other non-monetary benefits such as value for money and maximising public benefit and integrity. That said, it is likely (especially in challenging economic conditions) that price will continue to be a key driver for many authorities.

In our view, the proposed change from MEAT to MAT is unlikely to create too many practical difficulties for contracting authorities and bidders as it represents more of a shift in semantics than a root and branch reform to the basis for evaluation.  However, contracting authorities will need to ensure that they set clear scoring criteria to make MAT workable and to minimise the risk of challenges. It also remains to be seen how a bid will be evaluated on the MAT basis in circumstances where it satisfies the contracting authority's requirements but may not best satisfy the award criteria.

Bidders will need to consider carefully how they can properly evidence the important non-monetary aspects of their bid, such as their environmental record – it will take bidders time to build up a proper evidence bank, and it will not be sufficient just to pay lip service to these aspects.

Competitive procedures - and then there were two

Another significant change proposed by the Bill is the reduction in the number of available procurement procedures.

Under the current regime, there are five different competitive procedures, namely:

• open procedure
• restricted procedure
• competitive procedure with negotiation
• competitive dialogue
• innovation partnership

Each of these procedures has different requirements, which can be confusing for contracting authorities which use different procedures for different requirements.

S20(2) of the Bill reduces the number of tendering processes down to two procedures. These are:

1. An open procedure – a single stage tendering procedure without a restriction on who can submit tenders

2. A competitive flexible procedure (CFP) – any other competitive tendering procedure as the contracting authority considers appropriate.

The intention behind the proposed reforms in this regard is to retain the benefits of the open procedure from the current regime. However, under the Bill, the open procedure will be even less prescriptive - for example, there is no minimum time limit between the publication of a contract notice and the deadline for receipt of tenders (see s56 of the Bill).

The CFP essentially allows contracting authorities to design such procurement process as they see fit, which could include reproducing a procurement process as it exists now, generating a new process from scratch, or combining the features of two or more existing processes.   

The increased flexibility afforded by the CFP and the reduction in red tape will, at first glance, seem very appealing to contracting authorities. However, contracting authorities will need to ensure that any CFP that they design complies with the rules, and that their procurement teams are fully engaged with and understand how to apply it. If not, the risk is that mistakes will happen, leading to challenges and delays.

The same applies to bidders who will, unfortunately, have to get to grips with a potential plethora of new processes, which may differ in very subtle (but potentially significant) ways.

What are the next steps?

In our next article, we will look at key changes relating to KPIs and monitoring, so please do keep an eye on our website and social media channels for that.

In the meantime, please do not hesitate to in touch with our procurement experts if you require any further information or help.