Procurement framework: Before and after the Procurement Act 2023
The UK’s procurement landscape has undergone significant reform with the introduction of the Procurement Act 2023. Originally introduced under the Remedies Regime in 2009, the system was grounded in EU principles of transparency, equal treatment, and non-discrimination. Remedies under the old framework were limited to damages and declarations of ineffectiveness, with a strict 30-day limitation period. While functional, the Remedies Regime has been criticised for lack of efficiency and clarity.
In contrast, the Procurement Act 2023 introduces reforms to streamline procurement and enhance flexibility. Key changes include:
- New procurement methods such as open procedure, competitive flexible procedure, and direct awards.
- An expanded exclusion regime and a centralised Debarment List.
- A shift to Most Advantageous Tender (MAT).
- Significant increase in the notice requirements during the life of a procurement.
- Standardised procurement documents, shorter standstill periods, and updated contract modification guidelines.
Following discussion in the webinar held, it is believed that the shift in focus and the volume of guidance will inevitably lead to differences in approach, all of which are likely to result in greater risks of challenge and successful challenge throughout the procurement.
Standstill period timing
Under the Act, the standstill period is triggered when the Contract Award Notice is published informing the market of the outcome of the procurement. The best time therefore to publish a Contract Award Notice under the Act will generally be as soon as possible; the sooner the contracting authority publishes the notice, the sooner time can start to run and, hopefully, lapse without a challenge.
Time limits for challenges
The current regime imposed a 30-day limitation period for challenges, extendable only in exceptional circumstances. The new Act retains this limitation period but introduces notable changes:
- Standstill Period: Reduced to 8 working days under Section 51(2).
- Automatic Suspension: Claims must be issued and notified within the standstill period to trigger the automatic suspension (Section 101(1)).
These updates increase the urgency for challengers, requiring swift action and protective claims to be issued to preserve suspension rights.
Abandonment of procurement procedures
Under current regime, there are broad rights allowing a contracting authority to abandon. However, abandoning a procurement may not stop litigation that is already in progress, as there remains a risk that a damages claim may already have crystalised before the abandonment. A claim for a breach of the current regime therefore does not automatically stop once a procurement is abandoned (Amey v West Sussex [2019] EWHC 1291 (TCC)).
The Procurement Act 2023 provides for notices to be published pursuant to s.55 but is silent on the legal consequences of abandonment, potentially leading to continued uncertainty. It feels as though there is an open door to revisit the Amey decision in order to provide some much-needed judicial guidance on this going forward and particularly, the practical implications of abandonment under the new Act.
Early disclosure of information
The Court has made clear that in procurement disputes, the contemporaneous documents relating to the evaluation of the bids submitted by a claimant and the other relevant bidders should promptly be disclosed at the outset of a dispute, in order that the complainant can understand how the bids have been treated and the true basis of the authority’s decision-making process (a well established principle arising from case law including Roche Diagnostics [2013] EWHC 933 (TCC)).
Under the new Act, there is no new provision in respect of disclosure in procurement challenges. However, the existing principles (including those in Roche) are likely to evolve as parties navigate the possible tension between providing early disclosure and the Act’s new objectives (including to ‘share information’).
Automatic suspension
Under PCR 2015, Courts applied the American Cyanamid test to determine whether to lift automatic suspensions. The Procurement Act 2023 introduces a new test (Section 102(2)), which emphasises that the Court "must" have regard to "whether damages are an adequate remedy for the claimant“. This change may mean that significantly more automatic suspensions will be kept in place such that the suspension becomes a more frequent remedial response for challengers, but the lack of guidance surrounding the interpretation of section 102(2) creates ambiguity.
Remedies
The remedies available to claimants are largely dependent on the timing of the challenge. These can be summarised as follows:
- Pre-contract award: Broader remedies available, including automatic suspension.
- Post-contract award: Damages or declarations of ineffectiveness (the effect of which is that the contract entered into is rescinded).
- Under the new Act, general tortious principles are expected to apply albeit this will be fact specific.
Practical implications
For Contracting Authorities:
- Ensure compliance with the new transparency and documentation requirements.
- Maintain comprehensive records to help defend against potential challenges.
- Utilise the Procurement Oversight Unit for expert guidance and advice.
And finally, act tactically – always try to foresee what could be challenged later in the process (the 'make buy' decision, the basis for choosing options in the process, the decision behind the chosen evaluation criteria etc.). Disclose the reasons for those decisions early to remove the risk of information coming to light later in the procurement.
For Suppliers:
- Act promptly within the shortened standstill period to preserve rights.
- Leverage the expanded grounds for exclusion disputes.
- Use early disclosure provisions to strengthen claims and ensure transparency.
Conclusion
The Procurement Act 2023 marks a transformative shift in the UK's procurement landscape, enhancing transparency, fairness, and efficiency while increasing the procedural urgency of procurement challenges. By understanding and adapting to these changes, contracting authorities and suppliers can better manage disputes and mitigate risks. The evolving legal landscape, particularly regarding abandonment and early disclosure, will require close attention as Courts provide further clarity in the coming years.
