UK Public Procurement Reform – the Government's response to public consultation
Back in October, we provided an update on the Cabinet Office's plans for public procurement reform following publication of its Green Paper "Transforming Public Procurement" UK Public Procurement Reform – What's the latest? Now that the UK is free to determine its own legislative framework for public procurement, the Paper's goals are to "speed up and simplify our procurement processes, place value for money at their heart, generate social value and unleash opportunities for small businesses, charities and social enterprises to innovate in public service delivery".
Over 600 responses were received as part of the Green Paper consultation and the Cabinet Office has now published its response: Transforming_Public_Procurement-_Government_response_to_consultation
Our previous articles summarised the key features of the Green Paper transforming-public-procurement-what-does-the-green-paper-tell-us-about-the-likely-direction-of-travel__february-2021 and transforming-public-procurement---proposed-reforms-to-the-legal-procedures-for-challenging-public-procurement-decisions---march-2021. This latest article sets out the key changes from the Green Paper approach that have arisen from the public consultation. It also covers the next steps and timetable for the new legislation.
Support for reform
The Government's response to the consultation reports that overall, levels of support for the reforms in the Green Paper were high and many responses recognised the ambition and breadth of the proposals. At the same time, many respondents recognised that the reforms would come with significant implementation challenges if the expected benefits are to be realised.
The consultation response provides a detailed analysis of the feedback received, as well as the Government's response on each issue. In many areas, the Green Paper's proposals were broadly supported. Interestingly, the proposal to include only three procurement procedures was questioned heavily. As we set out in our previous article, we shared concerns about there being only two procedures (other than for specified circumstance such as extreme urgency). We argued that the loss of the restricted procedure could lead to an over-use of the new flexible competitive procedure which could be costly and time consuming for more straightforward procurements where a selection stage was needed.
Although it seems that these concerns were shared by many of the respondents, the Government plans to press ahead with this reform and will provide templates and guidance to help address these concerns.
There are quite a few other areas, however, where the Government has adjusted its plans as a result of the feedback received. Here is a summary of the key ones:
So what's new?
- A single regulatory framework
The plan is still to simplify the current legislation as far as possible into a single, uniform regulatory framework but some of the flexibility in the Utilities Contracts Regulations will be retained, particularly with regard to commercial exemptions for organisations competing with the private sector. The consultation response also signals that some security related exceptions may continue to apply for defence procurements.
- The Light Touch Regime survives
The Green Paper proposed a radical reduction in the number of available procurement routes which would have included the axing of the Light Touch Regime. In response to calls for it to remain, it will survive the cut but with some improvements to its scope and application.
- A wider refresh of the exclusions framework
The Green Paper already proposed changes to the approach for excluding suppliers from procurements for misconduct such as fraud, corruption and poor performance. Feedback suggested that the current system is overly complex and the provisions in relation to self-declarations and self-cleaning particularly confusing. Cabinet Office now plans to introduce a new exclusions framework which will be "simpler, clearer and more focused on suppliers who pose an unacceptable risk to effective competition for contracts, reliable delivery, and protection of the public, the environment, public funds, national security interests or the rights of employees".
- Proportionate transparency
The Green Paper had a strong emphasis on improving transparency which was broadly supported in the consultation. But there were concerns about the potential burden on contracting authorities, slowing down processes and decision making. Recognising this, Cabinet Office states that the transparency requirements will be proportionate to the procurements being carried out and simple to implement. To give one example, the requirement to publish redacted contracts will only kick in for contracts with a contract value of over £2 million.
That said, the consultation response does emphasize that the drive for greater transparency will be a key focus of the new regime, with plans for notices to be published over the life of a contract (Contract Implementation Notices with KPIs for contracts over a threshold to be confirmed, Contract Change Notices for certain contract variations and Contract Termination Notices when contracts come to an end).
- No more cap
One of the more controversial proposals in the Green Paper was a cap on the level of damages available to bidders that successfully challenge a contract award decision. This was met with mixed views and has now been dropped from the reforms. Cabinet Office is considering other measures aimed at resolving disputes faster which would "reduce the need to pay compensatory damages to losing bidders after the contracts have been signed". Watch this space!
The Queen's Speech in May this year announced that legislation to give effect to these reforms would be brought forward when parliamentary time allows. The consultation response notes that although it is not yet possible to confirm when the new regime will come into force, the intention is to provide six months' notice of "go-live" once the legislation has been concluded. In any event, the new regime is unlikely to come into force until 2023 at the earliest.
There will be comprehensive package of resources (statutory and non-statutory guidance), templates, model procedures and case studies. If funding allows, there are also plans for a programme of learning and development to meet the needs of varying stakeholders. All of this recognises that the potential benefits of the reform will not be realised by legislation alone. Those involved in public procurement will need training and support on the new approaches to get the very best out of them.