The PRU will sit in the Cabinet Office in Whitehall ©  Bryan Leung/Getty Images
The PRU will sit in the Cabinet Office in Whitehall © Bryan Leung/Getty Images

Eight key points from the UK's new procurement rules

Will Green is news editor of Supply Management
10 December 2021

The UK government has said it will give six months’ notice of “go-live” for a new set of public procurement regulations, though it is likely to be 2023 “at the earliest”.

The new rules, possible because the UK is no longer subject to EU regulations following Brexit, have been modified following a consultation on the government’s green paper Transforming Public Procurement.

Fresh legislation will be required to bring the regulations into force.

Here we summarise eight key points from the government’s response to the consultation:

1. The Procurement Review Unit (PRU)

The PRU will have a mandate to investigate “systemic or institutional breaches of the procurement regulations”. It will not intervene in specific procurement decisions but will make recommendations to contracting authorities.

The PRU will be made up of a team of civil servants, the government said, adding: “The panel itself is unlikely to communicate directly with any contracting authorities during the investigation but will advise the officials in the PRU during the process of compiling a report and developing any recommendations.

“Whilst the views of the panel will be taken into account, it will ultimately be for the minister for the Cabinet Office to issue, and decide the nature of, any recommendations. The panel will have no specific sanctions available to them.”

2. Consolidating rules

The green paper proposed consolidating current EU rules into a “single, uniform framework” and this was supported by 81% of consultation respondents.

The government will go ahead with this plan, with some modifications to address concerns from the defence and utilities sectors.

“Contracting authorities will find the structure of the new procurement legislation familiar and recognise similarities in its application, scope and definitions,” said the government.

“The new provisions on principles, procedures, purchasing tools, conditions of participation, contract award, legal challenges and remedies will be set out in much simpler and clearer language than the EU terminology used in our current regulations.”

It added: “The government is also taking forward reforms through the Health and Social Care Bill, and we recognise the need for integration between local authorities and the NHS (both for joint commissioning and integrated provision across health, public health and social care). The Cabinet Office and the Department for Health and Social Care are working together to ensure a coherent procurement regime for these and other types of user-focused services.”

3. Three modern procedures

The green paper proposed three new procedures, which will go ahead:

a) a new “flexible competitive procedure” that “gives buyers freedom to negotiate and innovate to get the best from the private, charity and social enterprise sectors”;

b) an “open procedure” for simpler “off-the-shelf” competitions; and

c) a “limited tendering procedure” that can be used in certain circumstances such as extreme urgency.

“The key concern raised by respondents was that the new competitive flexible procedure could introduce more complexity into procurements as it requires design and tailoring to the procurement being undertaken,” said the government, adding it would be providing guidance and templates on use of the procedure.

“We recognise that use of any competitive flexible procedure may require more consideration by contracting authorities at the outset of a procurement in order to decide the best manner in which to run their procedure.

“However, it is thought this increased effort at the outset will enable more complex procurements to be better designed and run by contracting authorities. Contracting authorities will be obliged to set out how the procurement process is to function, and this will be laid out in a tender notice.”

4. Most advantageous tender

Following support in the consultation, the government will change tender wording from “most economically advantageous tender” to “most advantageous tender” (MAT).

“This change in terminology will provide further clarity for contracting authorities that when determining evaluation criteria, they are able to take a broader view of what can be included,” said the government.

“It will support levelling up by encouraging contracting authorities to give more consideration to social value when procuring public contracts in their areas.”

5. Single supplier database

Suppliers will register on an electronic data storage system, owned by the Cabinet Office, and be responsible for the accuracy of the data they input.

“When a supplier enters a competition the self-declaration that none of the exclusion grounds apply and that they meet the conditions for participation will be submitted to the contracting authority via the system,” said the government.

“The supplier registration system will retain the majority of information required for a procurement, however a contracting authority will have the discretion to request further information, if required for the specific procurement.”

6. Tribunals

A “small minority” of respondents called for a procurement tribunal to deal with legal challenges to tender awards, though this was not included as an option in the green paper. Proposals for an existing tribunal to take on this task, or for an “independent contracting authority review” of disputes, will not be taken forward.

“As a result of some of the detailed feedback provided through the consultation responses, we are continuing to explore feasible options for faster and more accessible routes for valid challenge of procurement decisions,” said the government.

“Changes to the Civil Procedure Rules and/or Technology and Construction Court Guidance are intended to align with statutory reform, but will be subject to review by the Ministry of Justice and the Civil Procedures Rules Committee.”

7. Capping damages

A proposal to cap damages claimable by aggrieved bidders at 1.5x bid costs will not be pursued.

“Some respondents (especially among local government) welcomed the suggestion in order to disincentivise speculative challenges and limit spending of public money on compensatory damages,” said the government.

“Others had significant concerns about unintended consequences which they suggested could increase the cost to the taxpayer and outweigh any perceived savings achieved by the cap.”

8. Late payment

Supported in the consultation, proposals to allow organisations in the supply chain to approach contracting authorities directly with payment concerns will be adopted. Authorities will also be given the power to investigate supply chain payment performance.

“Taking into account the feedback we received in the consultation responses, we propose additionally requiring evidence from subcontractors that reasonable efforts have been made to resolve the payment delays directly prior to escalating to the contracting authority,” said the government.

“This will help mitigate against contracting authorities being drawn into contractual disputes between suppliers.”

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