15/08/2022
The Procurement Bill was introduced on 11 May 2022 and is currently going through the parliamentary process. In this series of Procurement Bill Bytes we take a detailed look at some of the issues and draw out some of the key changes that contracting authorities and suppliers need to get to grips with.
It should be noted that any of the provisions of the Procurement Bill might change as a result of the process of parliamentary approval. If changes occur to the provisions described in this article, we will update it on our website at the appropriate time.
We are really interested in your thoughts on how these reforms will affect you and are particularly keen to hear any questions you may have on the topics covered in our Procurement Bill Bytes. Please send any questions to Jessica Boardman and our procurement team will endeavour to answer as many as we can in our Procurement Bill Bytes Q&A Webinar, taking place next month. Register for the webinar here.
Introduction
On 11 May 2022, the government published the long-awaited Procurement Bill. The current version of the Bill implements recommendations from the government’s own response[1] to the original Green Paper[2] on proposed reform to public procurement law.
A key focus of the original response document was on the issue of increasing overall transparency of the whole procurement process; from initial advertising of opportunities and invitations to tender, through contract award, and on to the means of addressing potential challenges to the contracting authority’s decision. Despite this key focus, it is notable that there is no general overarching duty of transparency in the current drafting of the Bill. There is, however, an increase in specific transparency requirements, including the number of notices that contracting authorities will need to publish throughout the procurement process.
The initial proposed reforms in relation to notices were covered in our previous article, which can be found here. However, there are some differences between the recommendations raised in the response paper, and the actual provisions contained in the Bill. For example, the Bill does not (as yet) contain the suggested Contract Implementation Notice.
This article details the different notices contracting authorities will need to familiarise themselves with at each stage of the procurement process in order to ensure that they comply with the new transparency requirements. There are five main stages of the procurement process under the Bill which specific groups of notice requirements address; namely, the planning stage, tender stage, contract award stage, the moment of contract commencement (i.e. contract stage), and finally contract implementation (which also covers the period up to and including the end of the contract’s life and the relevant requirements at that point).
What information should be included in each notice?
Before considering each type of notice in detail, it must be recognised that each one (except for Section 53 covering Termination Notices) makes reference to Section 86 of the Bill, which covers the future provision of secondary legislation designed to specify exactly what form, content, or extra information a particular class of notice is required to contain. We can therefore expect further legislation in relation to what information must be included in each notice and how such notices are supposed to be published.
Planning Stage
Planning Notice: Section 14
The publication of a Planning Notice is purely optional, and only sets out the declaration (along with relevant S86 information) that the contracting authority intends to publish a Tender Notice at a future date; enabling suppliers to plan for potential future procurements.
If a Planning Notice is published at least 40 days, but not more than 12 months, before the publication date of the Tender Notice, then the Planning Notice becomes a “qualifying planned procurement notice”. This may permit the contracting authority to take advantage of a reduced minimum tendering period specified under S52(4): i.e. 10 days.
Pipeline Notice: Section 84
In order to allow potential suppliers to plan future work with the public sector, a contracting authority will be required to publish a Pipeline Notice if it fulfils certain requirements; namely, that within the coming financial year it considers that it will pay more than £100M under relevant contracts (i.e. contracts for the supply of goods, services, or works other than exempted contracts). Such a notice must set out “specified information” (to be determined in subsequent S86 secondary legislation) relating to intended tenders where the estimated contract value is greater than £2M. The notice has a deadline for publication: 56 days following the first day of the relevant financial year. Note that the Pipeline Notice does not apply to utilities contracts.
Preliminary Market Engagement Notice: Section 16
The publication of a Preliminary Market Engagement Notice is purely optional. This need only set out that the contracting authority intends to conduct preliminary market engagement (along with relevant S86 information). This will enable suppliers to consider pre-market engagement events for attendance.
Tender and Award Stages
Tender Notice: Section 20
A contracting authority is required to publish a Tender Notice when inviting suppliers to submit a tender as part of an open procedure. For competitive procedures other than open procedures, this is required when inviting suppliers to submit a request to participate or, where such requests are not relevant, when inviting their tender itself. The Tender Notice must contain a declaration of the contracting authority’s intent to award a public contract under S18 (as well as further information required under S86 secondary legislation). The contracting authority will be required to accompany the Tender Notice with publication of “associated tender documents”, the contents of which are yet to be specified under S86.
After publication of the Tender Notice, publication of future notices will naturally depend on whether or not the contracting authority chooses to proceed with awarding the relevant contract. If so, then an Award Notice must be published. If not, then a Procurement Termination Notice must be issued.
Award Notice: Section 48
The contracting authority will be required (subject to exceptions below) to issue an Award Notice if it chooses to proceed with an award. Note that this does not coincide with the actual commencement of the contract, and must merely state the contracting authority’s intent (alongside further S86 related information) to enter into the contract.
However, prior to issuing the notice, the authority is required to publish an “assessment summary” to each supplier that submitted an assessed tender. This is a key requirement of the new transparency provisions within the Bill; most notably because, where the relevant supplier is not the successful tenderer, they must receive a report not only on their own submission but also on the successful tenderer’s submission to permit ease of comparison.
Note that in the case of contracts awarded under defence and security frameworks, or user choice contracts, the authority is not required to publish an Award Notice under S48(1). The legislation seems unclear, however, as to whether such contracts require the provision of assessment summaries to the suppliers, as S48(3) appears to imply that these are only contingent on the planned publication of an Award Notice. Further guidance may be issued by the Government on this point.
Procurement Termination Notice: Section 53
An authority must publish a Procurement Termination Notice if it decides not to award the contract; but only if it has previously published either a Tender Notice or a Transparency Notice (see below) beforehand. There is no provision as to what must be included in the Termination Notice, but it must be issued as soon as reasonably practicable after the confirmation of the authority’s decision. Note that this is not required in the context of private utilities procurement.
Contract and Implementation Stages
Contract Detail Notice: Section 51
Publication of this notice is required (subject to certain exceptions below) following contract completion. The notice must set out confirmation that the contract has been entered into, along with other information to be determined within S86 secondary legislation. Publication of the notice must occur within 30 days of the date of completion (unless the contract falls within the ‘light touch’ regime, in which case this time period is 120 days). Note that if the contract has an estimated value of over £2M, a copy of the contract must be published (subject to certain devolution related exceptions). Publication of the notice is not required in the case of private utility or user choice contracts.
Contract Change Notice: Section 70
An authority is required to publish a Contract Change Notice prior to any modification of the contract, unless certain thresholds are not met. This must include a declaration of the intention that the authority wishes to modify the contract, along with information required by secondary legislation under S86. Where the intended modification neither increases nor decreases the value of the contract by 10% or less in the case of goods or services contracts, or 15% or less in the case of works contracts, no publication shall be required. Furthermore, where the term is to be increased or decreased by 10% or less of the maximum term permitted on award, there will be no publication requirement. Finally, this requirement does not apply to any contract falling within the ‘light touch’ regime. Note that Section 70(4) operates so as to prevent the division of large modifications into smaller alterations that would otherwise fall under the stated thresholds. Where a modification is successfully completed, the authority must publish a copy of the contract as modified.
Payments Compliance Notice: Section 64
An authority is required to publish Payments Compliance Notices where it either makes a payment under a public contract or a sum owed by it under a public contract becomes payable. These notices are intended to provide an indication of how well contracts are being managed. They must be published within 30 days of the last day of the reporting period (which following the initial transition period on the Bill coming in force will be six month period), and contain “specified information” regarding the contracting authority’s compliance with the obligation to pay sums under public contracts within 30 days (the detail is to be confirmed in the S86 derived secondary legislation).
Other Notices which may be required
Transparency Notice: Section 43
An authority is required to publish a Transparency Notice before awarding any contract under Sections 40 or 42; i.e. where allocating the contract under a direct award, or switching to a direct award procedure where no suitable tenders have been submitted through the competitive procedure. The notice requires declaration of the authority’s intent to award the contract directly, and further information to be determined by secondary legislation under S86. Note that this is not required in the case of user choice contracts.
Dynamic Market Notice: Section 39
An authority is required to publish a Dynamic Market Notice both before and after establishing a dynamic market, as well as subsequent to any modification to, or cessation of, that market. The notice must include, respectively, either the intention to establish, the fact of establishment, details of the modifications, or the fact that the market has ceased to operate. Again, this is alongside any further information required under secondary legislation. Note that in the case of private utilities contracts there is no requirement to publish notice of the cessation of the relevant dynamic market.
Regulated Below-Threshold Contracts: Section 79
An authority is required to publish a Below-Threshold Tender Notice prior to advertising for tenders in relation to “notifiable below-threshold” contracts (except where advertising to particular or selected suppliers), stating its intention to award such a contract as well as extra information specified under S86 secondary legislation. This is intended to increase transparency and enable the understanding of the intended implementation of such contracts. In addition, a contract details notice must be published as soon as reasonably practicable after entering into a notifiable below-threshold contract.
Such a below-threshold contract is “notifiable” when it is valued below £213,477 inclusive of VAT (the initial threshold set by Section 78(3)(b)) but not less than £30,000 (Section 79(4)(b)) in the case of contracts that are not to be awarded by a central government authority. Where the authority is a central government authority, the threshold changes to between £138,760 inclusive of VAT (Section 78(3)(a)) and £12,000 (Section 79(4)(a)).
Publication requirements for assessment of contract performance
Section 66 requires an authority that has chosen and specified key performance indicators (KPIs) in line with Section 50(1) (where the relevant contract is estimated to be worth more than £2M) to publish information relating to the supplier’s performance in relation to those KPIs. The publication must occur at least annually throughout the contract’s lifetime, and also on termination. The information required in the publication is still yet to be specified under S86 secondary legislation. This provision was originally considered for inclusion within paragraph 226 of the government’s response to the Green Paper as the “Contract Implementation Notice”, and envisaged a mechanism that would bring relevant contract performance criteria into public view for greater transparency by means of a KPI register that could indicate supplier responsibility for poor performance. What is contained in the Bill would appear to be a simplified method that does not rely on the upkeep of a centralised KPI register, and that is less likely to fall foul of the original criticisms in the consultation paper relating to attempting to standardise KPIs across different types of contract. The onus is also placed on the authority to publish information relating to a supplier’s breach of contract, or failure to remedy poor performance (except in the case of light touch contracts). Section 66 does not apply to private utilities in its entirety.
For a consolidated table summarising the different notices under each stage of the procurement process, please click here.
This article was co-written by Rupert Simpson, Trainee Solicitor.
[1] Transforming_Public_Procurement-_Government_response_to_consultation.v3_.pdf (publishing.service.gov.uk)
[2] Green Paper: Transforming public procurement - GOV.UK (www.gov.uk)
