Expected changes to public sector procurement procedures and transparency obligations

If your business is involved in public procurement or bidding for public contracts, you should know about the Procurement Bill which seeks to reform and rationalise the way public procurement works in England, Wales and Northern Ireland. In Scotland, the Bill will cover procurement for reserved functions. The UK Government sought a Legislative Consent Motion but the Scottish Government has rejected this. 

What is a public procurement system?

A public procurement system refers to the processes, policies, and procedures that the government and other public sector organisations use to purchase goods, services, and works from external suppliers. In the UK, the system is governed by the Public Contracts Regulations, which provide a legal framework for public procurement activities.

A public procurement system aims to ensure that public sector organisations obtain value for money, promote competition and transparency, and support wider policy objectives such as sustainability and social value. The system includes a range of procedures, such as open, restricted, and competitive dialogue procurement processes, and organisations are required to follow strict rules on advertising, tendering, and contract award.

To participate in public procurement in the UK, suppliers must register with the government’s procurement portal, which provides access to procurement opportunities and enables organisations to bid for contracts. The UK government also encourages the use of electronic procurement systems, which can help to streamline procurement processes and reduce costs for both buyers and suppliers. 

What is the purpose of the public procurement act?

The purpose of the public procurement act is to ensure the fair, transparent and competitive purchase of goods, services and works by public sector organisations and to help ensure that suppliers are treated fairly and have access to opportunities to bid for public sector contracts. This helps to promote competition, drive innovation and ultimately ensure that public sector organisations are able to obtain the goods, services and works they need to deliver services to citizens in a cost-effective and efficient manner.

The Procurement Bill regulation

The Procurement Bill repeals the current EU law-based procurement regulations. It lays out new rules and procedures for central government departments, their arms-length bodies and the wider public sector when selecting suppliers and awarding contracts with a value above certain thresholds. It also makes provisions for smaller, below-threshold contracts.

The Bill would introduce a new supplier selection regime, based on principles including non-discrimination, fair treatment, value for money, maximising public benefit, transparency, and integrity. Value for money remains the core objective of procurement, but the changes require public sector buyers to take a broad view and take account of the national strategic priorities

This means public sector procurement should consider wider public benefits, such as creating new jobs, tackling climate change, improving the diversity of their suppliers, and innovation throughout the procurement process. 

Key areas of change in The Procurement Bill for 2023

The Bill sets out enhanced transparency requirements under a new ‘noticing’ regime. This includes publishing information about future procurement ahead of time, and publicising new contract opportunities, procurement results and information on contract performance. The Government aims to establish a single platform for accessing procurement data, a public debarment list for excluded suppliers, a ‘tell us once’ system for supplier registration.

Legislatively, the Bill will repeal and replace:

• the Public Contracts Regulations 2015
• the Utilities Contracts Regulations 2016
• the Concession Contracts Regulations 2016
• the Defence and Security Public Contracts Regulations 2011

Despite this, the main features of the new procurement regime will remain substantively the same, including the concept of the contracting authority, the types of contracts that must be advertised and competitively tendered and rules on financial thresholds. 

As EU procurement rules were derived from the principles set out in the Treaty on the Functioning of the European Union (TFEU) including transparency, equal treatment and non-discrimination, the UK will base the new Procurement Bill on those same principles, along with others. These include the need to have regard to value for money and maximising the public benefit. The Bill requires contracts to be awarded to the Most Advantageous Tender, as opposed to the Most Economically Advantageous Tender. 

There’s a number of transparency changes as well, including public authorities having to publish when they think they will spend more than £100m in a year, issuing a tender notice at the commencement of the procurement procedure, a contract award notice before entering into a contract, instead of after, a contract termination notice ahead of the expiry or termination of a contract. 

One key change is the introduction of a debarment list, where suppliers can be added by the Minister and those suppliers will be barred from competing. A new single digital platform will make it easier for suppliers and contracting authorities to register once. Some things from the Green Paper have been left out of the Bill, however. The proposed cap on damages awards for procurement challenges has been dropped. Also, the Bill’s text does not sufficiently define key procurement principles such as integrity, did not include specific requirements to have regard for climate objectives, and did not emphasise the social value in procurement.