Transforming Public Procurement green paper: a high-level summary

The green paper was published in December 2020 and remains open for consultation until 10 March 2021.

Below is a high-level summary of some of the key proposals and our thoughts.

Simplification

One of the key themes of the proposed reforms is to simplify the procurement requirements so that "commercial teams can tailor their procedure to meet the needs of the market".

The new framework will be based on the GPA Principles of non-discrimination, transparency and impartiality and everything will be viewed through that lens.

Rather than different regulations for Utilities, Defence, etc, the proposal is for there to be a single set of regulations with separate sections for Utilities and Defence (though no details are provided within the consultation document of what those sections will contain). Health will remain outside the proposed new regulations. The devil will be in the detail of the separate sections but this could mean an increased burden for Utilities and Defence.

It is intended that there would be just 3 procedures:

Open

A procedure for buyers to use for simpler, "off the shelf" competitions

Flexible

Providing maximum flexibility with minimal detailed rules. Such rules would be:

• the process is consistent with the proposed principles of public procurement;
• the opportunity is advertised and notices are published in line with the proposed transparency requirements;
• the contract notice contains the basic information regarding the contracting authority and the opportunity (e.g. specification, timelines and any conditions for participation);
• the process remains consistent with the information provided in the contract notice (i.e. the buyer does what they said they would do at the outset);
• the process complies with the proposed requirements on selection and evaluation;
• time limits on participation and submission of final tenders are reasonable and proportionate and within the GPA minimum time periods of: 30 days to receive expressions of interest after publication of the contract notice; 25 days for submission of tenders after issuing the invitation to tender; and scope to reduce either or both of these timescales to 10 days in each case in the case of urgency.

Increased flexibility appears favourable, but we question the extent to which contracting authorities will take advantage of it.

Limited

Similar to the existing negotiated procedure without prior publication but its use will be extended to emergency and crisis situations. It will be mandatory to publish a notice of intention to use and there will be a 10-day standstill period (unless using procedure due to crisis or extreme urgency). A crisis situation would be declared by the Minister for the Cabinet Office. A degree of competition should be retained if possible and all decisions should be recorded.

Award criteria should continue to be linked to the contract but there can be exceptions set by Government (e.g. sustainability). This seems a sensible suggestion to allow Central Government to progress its agenda.

Government will investigate introducing a debarment list.

Poor performance can be taken into account on a wider basis and public bodies would be required to evaluate contract performance and publish the evaluation. Query the extent to which adverse evaluations would expose contracting bodies to litigation by contractors.

Selection stage of tenderers would be simplified by use of a central platform.

The paper proposes the introduction of "Dynamic Purchasing Systems +" which remains continuously open to new joiners. A flexible tendering procedure would be used within the DPS+.

Two types of framework are proposed:

•            Closed (up to four years)

•            Open (up to 8 years with an initial closed period of up to three years).

The revised DPS and framework arrangements will no doubt cause nervousness among many contracting authorities (particularly Utilities).

Open and transparent contracting

It is proposed that transparency would be embedded in the commercial lifecycle from planning through to procurement, contract award, performance and completion.

Contracting authorities would need to record and publish all decisions they make through the process – appropriate record keeping will be an essential requirement and this will increase the burden on contracting authorities.

Contracting authorities would be required to declare in their tender documents when information will be disclosed and justify what, if any, information is to be treated as commercially sensitive.

Before initiating contract award, it would be necessary to publish:

• Bidder identities;
• Basis of award decision;
• Basic disclosure of tenders submitted - Bidders will naturally be concerned at this and it may also cause problems for contracting authorities if they have to re-run a tender;
• Evaluation reports; and
• Basic evaluation disclosure information.

The default position should be to disclose all information, but Government will publish guidance on what would reasonably not be disclosable.

The requirement for debrief letters would be removed. It is likely that bidders would expect to receive individual feedback, though the requirement to state relative advantages and disadvantages would be removed.

It is proposed that contracting authorities would publish procurement and contracting data throughout the commercial lifecycle to the central platform. This will increase the burden on contracting authorities and subject them to greater scrutiny.

Fair and fast challenges to procurement decisions

Government wants to speed up and streamline the court process with a suggestion that they may consider the introduction of a tribunal for low value claims or where the procurement process is on-going. The aims are admirable but it will be a significant challenge to achieve them.

The focus of redress will be on pre-contract measures. This can only be achieved if the aspirations regarding transparency and speeding up the court process are fulfilled.

It is proposed that if a remedy is sought by bidders post contract award, they will be limited to a cap of 1.5 x bid costs (subject to certain exceptions). This is likely to meet strong resistance from the bidder community and there is a risk that it could result in a lowering of compliance with procurement regulations.

Contracting authorities would be encouraged to undertake formal internal reviews of complaints. Many contracting authorities will already have a system of review in place.

Test for lifting automatic suspension would be changed to make it less likely that the suspension would be lifted. The intention is that this would not be significant if the challenge process has been speeded up.

There would be a requirement to publish contract amendment notices (with some exceptions).

It is proposed to introduce a cap on the profit which an incumbent can charge where a contract extension is necessitated due to a challenge to a tender process. This is a welcome step, though query how the cap on profit will be determined.

If you have any questions on the above or would like to discuss the proposals or any other issues in relation to public procurement, please contact us.