New Statutory Procurement Duties on the Horizon for Welsh Contracting Authorities

The Social Partnership and Public Procurement (Wales) Bill (“Bill”) aims to improve the well-being of people in Wales by creating a legislative framework that places greater emphasis on socially responsible public procurement, fair work and social partnership working.

The Bill continues on its legislative journey and returned to the Senedd chamber on 14 March for Stage 4 (debate on passing the Bill) proceedings which is the final stage of the Senedd scrutiny process. The Bill was approved by a majority of Senedd Members and is expected to become an act of Senedd Cymru in April or early May 2023, provided no concerns relating to legislative competence or Parliament’s reserved matters are raised by the UK Government.

What does this mean for public procurement in Wales?

The Bill builds on existing policy that aims to maximise social, economic, environmental and cultural outcomes through procurement. The intention is to give greater prominence to consideration of those socially responsible outcomes at every stage of the procurement lifecycle.

Part 3 of the Bill (as amended at Stage 3) covers socially responsible public procurement and contains new procurement and contract management duties for contracting authorities in Wales.

Socially responsible procurement duties

There are a number of overarching duties around objective setting and application of those objectives in the procurement lifecycle and also regarding reporting of performance, for example, duties to:

• carry out public procurement in a socially responsible way by taking action aimed at contributing to the well-being goals set out by the Well-being of Future Generations (Wales) Act 2015 (section 24(1) and (2)).
• create, publish, revise and review objectives that align with its aim of contributing to the well-being goals (“well-being goals”) (section 24(3) and (4)).
• take all reasonable steps to meet the socially responsible procurement objectives set when carrying out public procurement (section 24(5)(a)).
• prepare a procurement strategy that sets out how procurements will be undertaken in a socially responsible way and in line with socially responsible procurement objectives, including details of how payments due under contracts will be paid promptly (section 38).

Reporting duties

New reporting duties will allow for greater scrutiny of procurement activities by the Welsh Ministers. A contracting authority will be required to:

• Publish annual socially responsible procurement reports which are to include:
  • a summary of procurements undertaken;
  • a review of the steps taken to meet the authority’s socially responsible procurement objectives;
  • where required, information intended to facilitate a Welsh Minister’s assessment of the extent to which an authority’s procurement objectives contribute to the achievement of the well-being goals; and
  • detail of future steps the contracting authority may take to meet its socially responsible procurement objectives (section 39).

• Maintain and publish a contracts register with mandatory information (section 40).

A contracting authority’s procurement activity may contribute to the achievement of the well-being goals by, for example, benefiting the local economy through contract awards to SME’s; taking environmental and social considerations into account; and promoting and facilitating the use of the Welsh language (section 39).

Section 41 contains a power for the Welsh Ministers to investigate how authorities carry out public procurement (both specific processes and generally) to ensure they are meeting the well-being goals.

Contract management duties

In addition, in order to strengthen the link between socially responsible outcomes in the procurement process and the delivery of those outcomes under the contract, there are certain contract management duties in the Bill which apply for major construction contracts (of a value of £2m or more) and outsourcing services contracts.

These duties include requirements for contracting authorities to have regard to model social public works clauses and social public workforce clauses (respectively); to include such clauses in contracts where appropriate; and to take reasonable steps to ensure the contractual obligations are implemented (section 25-34).

The Bill once enacted will create supplementary obligations for Welsh contracting authorities which will need to be considered in addition to the new procurement requirements to be introduced by the Procurement Bill later this year.

If you would like to discuss the Bill and what the changes mean for your organisation, our public procurement team would be happy to help. Please contact Bethan Lloyd or Isobel Williams.