Update On the Procurement Bill – What We Know So Far

Simply put, the Procurement Bill has been widely touted as a ‘one-stop’ repeal and replace of over 350 laws originating from the European Parliament. The main objectives of the Bill include the following:

• Creating a simple, flexible system for tendering for government contracts, with an emphasis on accessibility for small businesses
• Clarifying the principles and objectives that govern a contract award, including delivering value for money, maximising public benefit and conducting the tender process with transparency and integrity
• Setting out new contract management requirements for buyers, including assessing and publishing information on supplier performance
• Enacting a duty for purchasing authorities to consider the barriers facing SMEs during public procurement, and what can be done to address and overcome them.

A little over a year on from our previous blog around the Procurement Bill and just weeks away from the final stages of its enactment, we review the background, legislative process and eventual impact for public procurement across all industries.

Background and scope of the Procurement Bill

The Procurement Bill was introduced to essentially ‘simplify four sets of laws into one’, implementing rules on how the government will spend its annual budget of over £300 billion on works, goods and services. The Bill will provide comprehensive coverage of regulations for the following:

• Public contracts awarded by central government authorities (e.g. the Ministry of Defence and Crown Commercial Services) and subcentral authorities, such as councils, NHS Trusts and schools.
• Utilities contracts between the government and companies operating in the water, energy and transport sectors.
• Concession contracts for the provision of works or services where the public purchasing authority allows the supplier to appropriate the authority’s contracted workforce.
• Defence and security contracts, which are currently governed by the Defence and Security Public Contracts Regulations 2011.

Early indications that the Procurement Bill was on the horizon stemmed from the 2020 Green Paper, subtitled ‘Transforming public procurement’. The Green Paper set out a list of detailed proposals for shaping future public procurement, complete with consultation from over 600 stakeholders, including local and central government representatives, SMEs and other suppliers. Legal professionals, procurement academics and members of the public also responded to the call for consultation, ensuring comprehensive feedback from all walks of public life.

Why has the Bill taken so long to implement?

As the Procurement Bill is set to transform the entire UK public procurement policy, it has understandably taken a long time to progress to its current position. As per the parliamentary process, the Procurement Bill began in the House of Lords, spending over seven months in the second chamber:

• First and Second Readings (11–15 May 2022)
• Committee stage (4 July–26 October 2022)
• Report stage (28 November 2022)
• Third Reading (13 December 2022)

During its time in the House of Lords, the Bill experienced a ‘near record’ 594 proposed amendments to facilitate clarity, close potential loopholes and make the language more user friendly. Following the Third Reading, which offered one last opportunity to present any adjustments, the amended draft of the Bill passed to the House of Commons, which progressed as follows:

• First and Second Readings (14 December 2022–9 January 2023)
• Committee stage (31 January–12 June 2023)
• Report stage and Third Reading (13 June 2023)

A further 104 amendments were made during the committee stage of the House of Commons, lasting from 31 January to 12 June 2023. The Bill is now open for its second public consultation period, with the annual summer recess period for the House of Commons expected to last until 4 September.

What will the Procurement Bill include?

Although the exact content of the Procurement Bill is still unknown, we can make reasonable assumptions about new requirements, obligations and rules the Bill will enact, based on information published by Parliament in accordance with government transparency laws. These assumptions include:

• Introducing increased measures to ensure public procurement remains accessible to SMEs. This could include potentially reducing barriers such as minimum turnover and length of time spent trading, ensuring small and new businesses are not unfairly excluded from the tender process.
• Raising the current threshold for setting and publishing KPIs from £2 million to £5 million, in order to reduce the administrative burden for buyer representatives. However, buyers will still be able to set and publish KPIs under the threshold at their own discretion.
• Requiring a formal explanation of how the tendered works or services and appointment of suppliers, will align with national strategic priorities as outlined in PPN 05/21. Priorities include creating new jobs/skills, tackling climate change and reducing waste, and improving the diversity, innovation and resilience of government supply chains.
• Strengthening commitments to the Social Value Act 2012 by including ‘social value’ within the final text of the legislation. Social Value UK have published their thoughts on embedding social value into the Procurement Bill rather than incorporating it as a supplementary, and therefore weaker, policy framework.
• Creating a centralised, online exclusion and debarment list maintained by the government. The list will exclude suppliers from participating in public sector procurement based on failures, infractions or unacceptable performance on previous contracts or framework agreements.

The Cabinet Office has confirmed a provisional go-live date of October 2024. Similar to the introduction of the Public Contract Regulations 2015, the Bill’s implementation is likely to be completed across several phases. Crown Commercial Services, the Cabinet Office’s division responsible for all commercial activities, is expected to provide a learning and development programme for buyers and providers alike, supporting a smooth transition and implementation of the Bill.

Further updates from Executive Compass

As stated above, the Procurement Bill is currently in a public consultation period, where purchasing authorities, suppliers and members of the public can offer their views on the draft legislation. The consultation is due to end on 28 July.

We will continue to provide up-to-date information, including a series of blogs once the Procurement Bill becomes law. This will conclude with a white paper, outlining our guidance and advice for bidder organisations to ensure a smooth transition prior to the Bill coming into force.

For more information and resources on bidding in the public sector, our bid and tender management services and the industries we support, our sales and marketing team can answer your questions at 0800 612 5563, or via email info@executivecompass.co.uk.