The Cabinet Office has published its consultation paper for reforms to public procurement law for a post-Brexit Britain, outlining what promises to be the most radical changes to public procurement in a generation.
The green paper – Transforming Public Procurement – sets out reforms that the government promises will “speed up and simplify” government’s procurement processes, “place value for money at their heart” and “unleash opportunities for small business, charities and social enterprises to innovate in public service delivery”.
The reforms are intended to redefine public procurement law following the UK’s withdrawal from the European Union, building on the government’s commitment to the World Trade Organisation Agreement on Government Procurement and the procurement parts of the UK-EU Trade & Cooperation Agreement.
Such reforms are timely, but much is expected of them: can they do all we need them to do? The reforms need to address the varied challenges of a multitude of post-Brexit trading partnerships, Covid, Grenfell fire outcomes, the Carillion collapse, the recession and the need to ensure that the public purse gets the maximum “bang for its buck”. All of these demand a legal framework whose rules prioritise value for money, openness and transparency while underpinning the message that UK PLC is open and ready for business.
Set out below are some of the key proposals included in the green paper.
- New legislation: The government proposes to repeal the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011 and produce a single set of regulations covering all contracts. This “bonfire of red tape” will not warm many in practice: we only use one set of regulations at any one time.
- Principles of procurement: In a move away from the need to open up the common market, the green paper proposes that the new legislation will be underpinned by six core principles: public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination. The introduction of the newly phrased principle of “public good” chimes with recent outputs from government, including the Social Value Model, Procurement Policy Note 11/20 concerning the reservation of below-threshold contracts to SMEs/VSCEs and local businesses, as well as the anticipated publication of the National Procurement Policy Statement.
- Award procedures: The green paper proposes a complete overhaul of the procedures for awarding contracts, reducing the current myriad procurement procedures to three: the open procedure and a new “competitive flexible procedure” will be the competitive procedures. The current negotiated procedure without prior publication of a contract notice will be retained and renamed the “limited tendering procedure”. The existing ground of using this procedure will remain broadly unchanged, although it will now be able to be used in cases of “crisis” as well as extreme urgency brought about by unforeseeable events.
- Selection criteria: Contracting authorities will be able to use a wider range of information to carry out selection criteria verification. The government will also investigate the feasibility of a centrally managed “debarment list” of banned suppliers. This facility would revolutionise the impact and efficacy of this stage of a process, which is often difficult, costly and time-consuming for an individual client to undertake. However, the cost and feasibility of compiling such a list may result in this idea not making it out of the blocks.
- Past poor performance: Bidders may be able to be excluded for significant poor performance on previous contracts even where this did not lead to termination, damages or other sanctions, and is considering requiring contracting authorities to publish KPI performance for individual contracts on a central database. The idea of KPI performance being published has been gleaned from examples of best practice in other jurisdictions. Again, whether such a central database is deliverable will define the impact and efficacy of this proposal.
- Transparency requirements: One of the major changes proposed in the green paper is the proposal to adopt an approach in line with the Open Contracting Data Standards and require all contracting authorities to publish information throughout the commercial lifecycle, including the identity of the bidders, the evaluation reports and the basis of the award decision. As a consequence of “embedding” transparency through the procurement process, contracting authorities will no longer be required to provide individual feedback letters to bidders. Bidders will be encouraged to create their own feedback from the information available.
The green paper has real potential to revolutionise public procurement law and recast the principles that underpin it. In doing so, we need to ensure that the tricky path between “simplification” and “flexibility” is navigated successfully: it is unlikely that both can be achieved in the same piece of legislation.
The government states that the proposed reforms will deliver the best commercial outcomes with the least burden on businesses and the public sector. The devil will, as always, be in the detail – but this objective will only be achieved if the more ambitious proposals (a central online platform for tender information, a centrally-operated debarment register and expedited remedies process) are delivered. Otherwise, there will be limited opportunities available to contracting authorities and their bidders to offset the cost and time burdens of the increased transparency requirements and the upskilling and training that will inevitably be required.
Responses to the 42 questions raised in the consultation are invited and should be submitted to the Cabinet Office by 10 March 2021. The paper – Transforming Public Procurement – is available here.
Rebecca Rees is a partner in the public procurement team at Trowers & Hamlins
