Procurement reform - Will the grass be greener on the other side?15/01/21
The Government has issued its Green Paper on procurement reform. In this insight, we examine the proposals, whether this will be the simpler, cheaper regime promised and what procurement might look like for registered providers in the future.
What is the Green Paper?
The Green Paper was published in December 2020 and sets out the Government’s proposals to transform public procurement. The proposals are by no means set in stone but it gives a flavour of the direction in which procurement might move in the UK post-Brexit.
What are the key proposals?
For registered providers, the “top ten” key proposals to change the procurement rules are:
1) New procedures
It is proposed that the current procedures would be replaced with just three options:
- “Open procedure” – this will be the same as the current open procedure, keeping a familiar “default position” procurement process for off-the-shelf style purchasing.
- “Competitive flexible procedure” – this will replace the restricted procedure, competitive dialogue and competitive procedure with negotiation (and the lesser used innovation partnerships and design contests). As the name suggests, it is intended to be a flexible procedure which allows negotiation with bidders. It looks to be similar to the “light touch regime” we currently have, with registered providers being able to design their own procurement procedure.
- “Limited tendering procedure” – this will be similar to the current negotiated without-prior-publication procedure (Regulation 32) which can be used in limited circumstances, such as extreme urgency. This will be very similar to the current rules, but with an obligation to issue a notice whenever this procedure is used. There will also be a new ground of “crisis” for national or local emergencies. This appears to have been directly influenced by the Coronavirus pandemic.
2) More flexible frameworks
The green paper proposes the introduction of “open” frameworks which would be for a longer term, with defined points when new suppliers could apply to join. This would allow for longer term arrangements, open the market to new suppliers and drive competition with existing suppliers on a framework. The existing “closed” framework system would continue as currently.
Dynamic Purchasing Systems are encouraged, proposing that these can be used for all types of procurement and not just common goods or services. Awards would use the new competitive flexible procedure, giving registered providers the ability to design their own process at call off stage and potentially negotiate with suppliers.
4) Modifications of contracts
The rules around contract changes will remain largely unchanged, but there will be a requirement to publish a notice of any contract changes, except for minor changes to value/duration and changes which do not change the scope of the contract. This will be an increased administrative requirement and the timescale and “standstill” process will need to be built into any negotiations for contract changes. It may, however, give reassurance that changes will not be challenged after the standstill period and the 30 day limitation period.
5) Selection stage
The intention is to simplify this stage with basic information being submitted on a central platform (see below). Registered providers would then apply their chosen criteria (e.g. a turnover requirement) to this criteria to identify suppliers eligible to bid. This will limit what can be looked at during the qualification stage, although if you are using the competitive flexible procedure further criteria could be used to reduce suppliers again, after this initial selection stage.
6) Exclusion of bidders for poor performance
There are proposals to make it easier to exclude bidders based on past performance which is a welcome change, as currently this is difficult to do in practice. It won’t be necessary to show that a contract has been terminated or damages claimed. It will however still be necessary to show “significant” or “persistent” deficiencies of a “substantive” requirement so the bar is still fairly high. There is a proposal to look at a system of publishing KPI information on a central platform to help with this process.
There is an emphasis on including a broader range of evaluation criteria, so that national priorities such as social value can be looked at more easily. Evaluation will be based on the “Most Advantageous Tender” (rather than the Most Economically Advantageous Tender) with clear messages about assessing value for money and not just awarding contracts on the basis of lowest price.
8) Publishing information and notices
There will be an overhaul of the notices used and notably an increase in the type of notices to be published. This will include publishing details of annual pipeline, contract amendment notices and contract termination notices.
The aim here is to increase transparency throughout the procurement process and the life of contracts. This will involve more work for registered providers, but the intention is to use a new central platform to aid this process. By increasing transparency generally via public notices, this will decrease the need for other information currently provided to bidders (such as the detailed debrief letters) or via disclosure if legal proceedings are started.
9) Central platform
Proposals are to set up a new central platform which will include a supplier registration system which can be used as an “evidence locker” for suppliers (so they can submit qualification information in one place) and details of debarred suppliers.
The platform might also be used as a register of complaints and legal challenges against contracting authorities.
10) Legal challenges / remedies
There is a definite push to simplify and speed up legal challenges with a focus on taking measures to correct problems (for example amending your documents or re-running the procurement) rather than claim damages. It is also proposed that there will be a cap on damages to legal fees and 1.5x bid costs. There will be exceptions to this, for example where there is an illegal direct award.
What does this mean for registered providers?
At this time it is business as usual, as the current procurement regulations continue to apply with only minor changes to reflect the impact of Brexit. See here for details about the changes for advertising contracts post-Brexit.
In the future however, if the Green Paper proposals become law, registered providers would certainly benefit from more flexibility about how they run procurement procedures and the ability to look meaningfully at social value, which is already a high priority in the housing sector. There will hopefully also be less fear of high damages claims and more of an emphasis on fixing any mistakes which will be very welcome.
There will be more centralised information which will help streamline processes (for example where you can use a centralised supplier database rather than issuing Selection Questionnaires each time) but this will also result in an increased administrative burden for registered providers which will be required to publish more information about procurements, contract award and supplier performance.
How Capsticks can help
At Capsticks we strive to ensure our clients are “one step ahead” in delivering their ambitions to ensure value for money and the best possible service. We offer an experienced and responsive team of specialist procurement lawyers who are on hand to review your procurement options and/or procurement compliance.
If you have any queries around what is discussed in this article, and the impact on your organisation, please contact Katrina Day or Lee Clarke to find out more about how Capsticks can help.