Context
A key "goal of the Procurement Bill is to create a fully transparent public procurement system". Whilst transparency is not a new concept in the context of the current regime, the Cabinet Office has identified that the "existing rules and systems have room for improvement".
With "one in every three pounds of public money, some £300 billion" being spent on public procurement each year, it is understandable that transparency reform has become a core principle of the Bill. Improving transparency can help to ensure "everyone [has] access to…highly valuable information" in the context of the "public procurement market". Enhancing transparency can also increase "public trust" and improve "commercial outcomes" ultimately saving "the taxpayer money and [driving] benefits across" the UK.
What transparency reforms are proposed under the Procurement Bill?
The key transparency reforms can be briefly summarised as follows:
- the "introduction of a number of new procurement ‘notices’, covering the entire procurement lifecycle from planning through to contract expiry";
- the implementation of "a registration service for suppliers, where they can input information that will be used by all contracting authorities during procurement processes - a ‘Tell Us Once’ system"; and
- the launch of "a digital platform which will display all of this information publicly, with API access to data published to the Open Contracting Data Standard".
Consultation
As the Bill makes its way through parliament, the Cabinet Office is conducting a two-part consultation on "secondary legislation required to implement the new public procurement regime established by the…Bill". Whilst part 1 of the consultation relates to the Procurement Act 2023 (Miscellaneous Provisions) Regulations, part 2 primarily focuses on the "transparency provisions and notices that will be used by contracting authorities to fulfil their legal requirements under the Bill".
Part 2 launched on 17 July 2023 and runs until 25 August 2023. Individuals and organisations can respond by completing the Cabinet Office's digital survey or emailing procurement.reform@cabinetoffice.gov.uk.
What notices will be implemented under the new regime?
The Cabinet Office has described notices as "the foundations for the new standards of transparency". The term "notices" is referenced over two hundred times in the Bill with voluntary and mandatory publication requirements "running throughout". The key notices that will apply under the new regime are summarised below.
(1) Planning
At the planning phase of a public procurement, there are three notices contracting authorities will need to consider.
Pipeline notices will provide "the market with advance notice of anticipated public contract opportunities with an estimated value of more than £2 million which a contracting authority proposes to enter into in the forthcoming 18 months". This notice "must be published within 56 days of the first day of the relevant financial year" and include details "of what is to be procured, when it is expected to be advertised, and when it is thought that the delivery will commence". Private utilities are not required to publish pipeline notices.
Before going out to tender, contracting authorities can also publish a planned procurement notice to inform the market that it intends to publish a tender notice. This notice is "designed to give…advance information to the market…to enable potentially interested suppliers to determine if the upcoming procurement is something that they wish to bid for". If the planned procurement notice is published at least 40 days and up to 12 months before the day on which the tender notice is published, the minimum tendering period can be reduced to 10 days. A key advantage if contracting authorities need to conduct procurements at pace.
Similar to prior information notices that exist under the current regime, preliminary market engagement notices will be "used to invite suppliers to participate in preliminary market engagement and/or notify the market this engagement has taken place". Contracting authorities must publish a preliminary market engagement notice where they carry out preliminary market engagement or provide reasons for not doing so.
(2) Tender
The tender notice applies at the tender stage and will advertise and officially launch a competitive tendering procedure. It is similar to the contract notice under the current regime. The "tender notice will [also] act as an invitation to submit a tender for the contract under the open procedure and could act as an invitation to tender or an invitation for suppliers to submit a request to participate under the competitive flexible procedure".
In the case of direct awards, section 44 of the Bill requires contracting authorities to publish a transparency notice before making the award. This notice informs the market that a contracting authority intends to award a contract directly.
Where a contracting authority decides not to award a contract, they must publish a procurement termination notice. This notice is only required where a tender notice or transparency notice has been published. Procurement termination notices will not apply to private utilities.
(3) Award
Under the new regime, there are two notices that apply at the award stage.
A contract award notice "notifies the market of the outcome of a procurement process and alerts the market to the fact that a contract is about to be entered into". In this respect, it is very similar to the contract award notice that is already in place under the current regime. For many procurements, contract award notices under the Bill will also commence "a standstill period which allows a window for challenges to the award decision before the contract is signed".
The Bill introduces the concept of contract details notices that will inform "interested parties that the contract has been entered into". Publication of this notice will follow the contract award notice and any associated standstill period. Save for light touch contracts, the timeframe for publication is 30 days from the day on which the contract is entered into.
(4) Implementation
Following contract award, there may be additional publication requirements for contracting authorities to consider.
Under section 69 of the Bill, contracting authorities are required "to publish specified information every six months, detailing how quickly they have paid their suppliers". Payment compliance notices will capture this information. These notices will effectively replace section 113(7) of the Public Contracts Regulations 2015 whilst increasing the frequency of publication from annual publication to every six months.
For contracts that have an estimated value of £5m or more, "a contracting authority will usually be required to set at least three KPIs in respect of the contract in the contract details notice". The purpose of the new contract performance notice is to record suppliers' performance against those "published KPIs and information relating to any serious breach of [the] contract".
Where a contracting authority intends to modify a contract, they must first publish a contract change notice ("CCN"). Recognising that "there is [currently] little information available during the implementation phase of contract management", CCNs intend to make "important decisions taken during the lifetime of larger contracts more transparent and open to scrutiny". Where the modification changes or results in a public contract with a value of more than £5m, contracting authorities must also publish a copy of the contract as modified or the modification. A CCN is not required for defence and security contract, light touch contracts or contracts awarded by a private utility.
At the end of the procurement lifecycle, contracting authorities must publish a contract termination notice within 30 days of the contract terminating "to inform stakeholders that a contract has been terminated and to ensure that the data record is kept up to data". This notice also provides an opportunity "for greater analysis of the value for money of the whole contract" noting that it is currently "unclear whether contracts have actually terminated or been extended".
What will the Central Digital Platform look like?
As part of the reforms, the Cabinet Office will implement a new digital platform to improve processes and drive transparency. The digital platform "will enable notices and documents to be accessible by electronic means, free of charge and through a single point of access". The platform aims to improve "clarity for suppliers and [support] fairer and open competition". It will operate as a centralised repository where "relevant procurement notices and information will be held in one place".
In accessing the platform, contracting authorities will be required to use "unique identifiers in all procurements when publishing notices and other information". The purpose of the identifiers is to prevent "duplication of records", enabling better "tracking and analysis" whilst linking "together all records associated with each procurement". In addition, the new "platform [could be] used to publish information relating to below threshold procurements".
Whilst the form and functionality of the new platform is currently unknown, it is expected to build on the Find a Tender portal.
What is the register of suppliers?
Under regulation 6 of the Regulations, contracting authorities must ensure that a supplier "has registered on the central digital platform" and "submitted its core supplier information to that platform" before participating in a covered procurement.
Capturing supplier information in this way will potentially lead to a "'tell us once' approach" in public procurement and, in turn, "enable suppliers to bid for public sector opportunities without having to duplicate core information with each bid they submit".
The core details suppliers will be expected to submit at registration include:
- basic information such as the supplier's name, unique identifier, VAT registration number and relevant qualifications;
- details of economic and financial standing including copies of relevant audited accounts;
- details of connected persons such as information on individuals with significant control over the supplier; and
- details of mandatory exclusion grounds that apply to the supplier, associated persons and connected persons.
Comment
The draft legislation builds on existing transparency principles and mechanisms under the current regime. The Cabinet Office has designed new notices and measures that are likely to improve transparency throughout the public procurement lifecycle. This should be welcome news to contracting authorities and tenderers. A main benefit of the Bill put forward by the UK Government was the ability to slash "red tape" and create "more sensible rules…[to]…reduce costs for business and the public sector". Whilst the new measures are extensive, it remains to be seen how easily these reforms will be implemented at a practical level and whether they are a proportionate means of improving transparency in public procurement.
