Regulated procurement | UK Regulatory Outlook March 2024

Procurement Act 2023: Government publishes draft Procurement Regulations

Following its two consultations on draft regulations implementing certain aspects of the Procurement Act 2023, the government has now published its response and has also published the draft regulations. The consultation response notes the draft regulations have been amended to improve them in line with comments received, although no significant changes are being made.

The consultation response adds that the government will provide a minimum of six months' notice of go-live of the new regime and that the laying of the regulations would be the earliest point that this notice would be given. Its expectation continues to be that the new regime will come into force from October 2024.

Some of the key takeaways from the consultation response are:

• With regard to the Act and the Provider Selection Regime (PSR), the response states that healthcare services will be included in the schedule of light touch services covered by the Act to ensure that those bodies that are not covered by the PSR are regulated under the Act when buying healthcare services. Guidance will be published on how the Act and the PSR interact.
• For pipeline notices, the response confirms that contracting authorities are not held to the information in the notice which could change over time as plans for the procurements become clearer and they are not legally obliged to indicate when a contract will not be procured.
• For tender notices, an amendment will be made to the regulations to require contracting authorities to state whether or not they consider the contract would be particularly suitable for small and medium-sized enterprises and voluntary, charitable or social enterprises.
• Guidance will be published on practical aspects of transparency notices, such as timings for publication.
• The government is considering an optional field for termination notices for authorities to use voluntarily to provide reasons for termination. Termination notices are new under the Act and will be used to tell the market that a procurement has been discontinued.
• For assessment summaries, the government will remove the requirement for contracting authorities to explain why the next available score was not achieved. This change was made because it was being misinterpreted as requiring a separate statement, whereas it was intended to be included in the overall explanation for the score. Further, the obligation to provide suppliers with information regarding the most advantageous tender remains, but the new approach will be less burdensome than the current requirement.
• For contract award notices, the naming of unsuccessful bidders has been removed for lower value contracts and will only be a requirement for public contracts valued at £5m or above. Guidance will provide further clarity on practical concerns about contract change notices.
• No changes will be made to the transitional provisions in terms of the length. Guidance will confirm questions raised around transition of procurements under the new regime, but it is understood that those conducted under the current regime, including when modified, will continue to be regulated under the current regime rather than under the Act.

Procurement Act 2023 guidance

The government has published its first tranche of guidance for stakeholders to help prepare for the Act, which is aims to provide technical guidance to help understand the new regime. It will be publishing the guidance documents in batches, with the aim to have the full suite published by the end of June 2024.

The first suite covers the following topics:

• contracting authority definition;
• covered procurement definition;
• valuation of contracts;
• mixed procurement;
• exempted contracts; and
• thresholds.

The government also states that transition guidance will also be published shortly. 

Crown Commercial Service publishes its updated commercial pipeline under the Procurement Act 2023

The new Procurement Act 2023 introduces a new requirement on authorities to publish their pipeline notices detailing their upcoming procurements. These notices are mandatory for authorities planning to spend more than £100m on regulated contracts in the coming year. 

Pipeline notices are intended to help suppliers plan better for upcoming contract opportunities and allow them to resource the bidding, which can be time consuming.  In order to take full advantage, suppliers should become practiced in monitoring pipeline notices.

Ahead of the Act coming into force (expected to be October 2024), the Crown Commercial Service (CCS) has published its pipeline priority list of commercial agreements anticipated to be awarded from October 2024 under the new regime. The article states that the Procurement Act 2023 is not retroactive adding that: "All current live commercial agreements will continue operating under the Public Contract Regulations 2015 (PCR 2015). We will operate agreements under both PCR 2015 and the Procurement Act 2023 for a period of time; at least until existing agreements expire, are replaced, or cease to exist."

Suppliers interested in bidding for CCS framework agreements should review the list so they are aware of which upcoming agreements will be run under the new regime.

PPN 01/24 Carbon Reduction Contract Schedule

The Cabinet Office has published Procurement Policy Note (PPN) 01/24 that introduces an optional standard carbon reduction contract schedule that can be included in government contracts. Use of the Carbon Reduction Schedule is optional and should be included where relevant to the subject matter of the contract and proportionate to do so. The PPN can be applied with immediate effect.

The Carbon Reduction Schedule published alongside this PPN provides standard terms and conditions to support contract specific decarbonisation objectives to be set and delivered, and provides a framework to monitor and assess the supplier’s decarbonisation performance. These include contract specific greenhouse gas (GHG) emissions reporting, setting supplier GHG emissions reduction targets and monitoring and reducing GHG emissions throughout the life of the contract though a supplier GHG emissions reduction plan.

PPN 01/24 applies to all central government departments, their executive agencies and non-departmental public bodies, but other public sector contracting authorities may also wish to apply the approach set out in this PPN.

Consultation on competition and consumer protection-related information sharing

The government is consulting on two proposals which would amend the Enterprise Act 2002 to enable the exchange of competition and consumer protection-related information between relevant UK public authorities to assist them in exercising their statutory functions.

This includes adding the Procurement Act 2023 to the list of legislation in schedule 15 of the Enterprise Act in order to allow information sharing between the CMA Competition and Markets Authority (CMA) and contracting authorities and the Procurement Review Unit. This is in relation to the mandatory and discretionary exclusion grounds under the Act.

Adding the Procurement Act 2023 to the Enterprise Act will create an information-sharing gateway to allow contracting authorities to contact the CMA to know whether a supplier has or is being investigated. Under the 2023 Act, the mandatory exclusion ground includes where the CMA has made a decision that a particular supplier has infringed Chapter I of the Competition Act 1998 within the last five years. Under the discretionary grounds, it covers decisions by the CMA in relation to infringement of Chapter II prohibition (abuse of dominance) and situations where an alleged competition infringement has not been investigated, or where a case is being investigated but has not yet concluded.

Update on regulations to eradicate modern slavery in NHS supply chains 

Please see Modern slavery.