Regulated procurement | Regulatory Outlook July 2022

Procurement Bill

As reported in our previous Regulatory Outlook, the Procurement Bill is currently at Committee Stage in the House of Lords. A large number of the amendments that the Lords are reviewing are technical in nature and do not change the general policy intent of the Bill. 

Some of the key issues discussed in the House of Lords so far include:

• Improving the UK’s supply chain resiliency against dependency and human rights abuse by creating a double regulation making power: to enable the government to develop a plan to address dependency and to bring human rights standards in line with the procurement standards of the Department of Health and Social Care.
• Using AI in the public sector, highlighting that the guidance on AI in procurement should be reflected in the Bill. 
• Calls for the concept of social value to be included in the bill itself rather than only by reference to the National Procurement Policy Statement (NPPS).
• The impact of the Bill on small and medium enterprises (SMEs) and ensuring the regime works for them.
• Exclusion grounds – both their scope and purpose. 

The House of Lords will be breaking for summer recess on 22 July and the debates on the Bill are set to continue in early September. 

Secondary legislation (expected after the Bill has received Royal Assent) will provide further detail on the processes and measures introduced in the Bill.  These include, among other things, further information on transparency notices and how the appeal mechanism will operate to allow for removals from the newly introduced debarment list. 

The Bill is expected to receive Royal Assent in 2023 and there will be a six month implementation period after the Bill is enacted to allow time for preparation and training, giving time to contracting authorities and suppliers to gain a better understanding and knowledge of the procedures before bidding under the new regime. 

Policy paper on transparency of UK public contracts

On 30 June, the Cabinet Office published a policy paper on its proposals for improvements to transparency of UK public contracts and spending. As acknowledged in the "Transforming Public Procurement" green paper and consultation response, and now translated into the Procurement Bill, the government proposes to embed transparency throughout UK public procurement.

The paper gives details on three core transparency reforms:

• The introduction of a number of new procurement "notices", covering the entire procurement lifecycle from planning through to contract expiry.
• The provision of a registration service for suppliers, where they can input information that will be used by all contracting authorities during procurement processes - a "Tell Us Once" system.
• A digital platform which will display all of this information publicly, with API access to data published to the Open Contracting Data Standard (OCDS). Once the government has completed the core notice development, over time it will also plan to build a number of useful registers, and explore integrating commercial data analysis tools. 

The paper goes on to set out the benefits of these reforms which are: lower prices through better disclosure; improved accountability in spending; reduced scope for corruption; and time savings through the "tell us once" system. It then outlines the next steps, flagging that much of the detail for the transparency reforms will be finalised in secondary legislation and guidance. 

Public Procurement (International Trade Agreements) (Amendment) Regulations 2022 

On 27 June, the Public Procurement (International Trade Agreements) (Amendment) Regulations 2022 (SI 2022/766) came into force. The regulations amend the Public Contracts Regulations 2015 (SI 2015/102), the Concession Contracts Regulations 2016 (SI 2016/273) (CCR 2016) and the Utilities Contracts Regulations 2016 (SI 2016/274) to implement the EEA EFTA Agreement between Iceland, Liechtenstein, Norway and the UK and, in particular a provision (article 6.9) in the agreement concerning abnormally low tenders. 

This provision requires tenderers proposing abnormally low tenders to explain whether the price or costs take into account the grant of subsidies. The explanatory memorandum explains that "Article 6.9 does not confer on contracting authorities the ability to reject an abnormally low tender on the basis of the receipt of a subsidy alone and therefore no new provision for this is being made in the public procurement regulations." 

The changes set out in the regulations will not affect any procurement that commenced before the regulations came into force.