Procurement in a Nutshell – Changes to award criteria

In December 2021 the Government published its response to the consultation and the comments raised by over 600 organisations and individuals. As a result we now have a clearer indication of the reforms that the Government intends to introduce.

The Government plans to produce a draft Bill at some point in 2022. Further to the new legislation the Government will also introduce new secondary legislation or regulations to implement the new regime and produce  “a detailed and comprehensive package of published resources (statutory and non-statutory guidance on the key elements of the regulatory framework, templates, model procedures and case studies)” to help contracting authorities and suppliers understand how the new regime will work.

Due to significant changes and the amount of work required to bring this all into effect it is unlikely that the new regime will be implemented until 2023 at the earliest. We can expect a draft Bill this year and the Government has said that it intends to give at least 6 months’ notice of “go-live”.

What this Nutshell covers

This Nutshell looks at the proposal to amend the requirement to link award criteria to the subject matter of the contract, as well as removing the requirement to evaluate bids from the point of view of the contracting authority.

What the Green Paper said

The Green Paper stressed that it was important to link award criteria to the subject matter of the contract, because that enables contracting authorities to weigh up the costs and benefits against its own requirements and helps to protect against corrupt practices. However, the government felt that authorities should be able to consider wider factors than those just  linked to the narrow delivery of the contract. This in turn would enable contracting authorities to take account of the government’s strategic priorities and drive better supplier behaviour. Examples given in the Green Paper were a supplier’s record of prompt payments to its sub-contractors and a supplier’s commitments to improve environmental performance.

A second proposal was to remove the requirement for evaluation to be made solely from the point of view of the contracting authority. This would allow authorities to take account of the wider impact of tenders, for example the impact on whole communities and social value issues.

Results of the Consultation

Responses to these proposals were largely positive and there were suggestions of policy areas which could be taken into account in evaluation, such as Modern Slavery and the drive towards Net Zero.

However, some respondents were not so keen, stressing the complexity that these changes could lead to, the increased tendering costs for businesses and increased barriers  to small businesses.

The government recognised these concerns, but still intends to make the changes. The change to the requirement to link award criteria to the subject matter of the contract will be implemented by way of secondary legislation which will reflect certain specific policy areas.  It is not yet clear whether this legislation will simply make it permissible to adopt evaluation criteria linked to these policy areas or whether they will be mandatory. The removal of the requirement for evaluation to be made from the point of view of the contracting authority will be included in the new legislation, but the government has said that it will publish clear guidance to help authorities implement this new approach.

What this means

There is no doubt that these changes could introduce greater complexity into the tendering and evaluation processes. For many authorities the changes will enable them to take broader policy considerations into account, but for smaller projects and procurements they will have to guard against taking a disproportionate approach that disincentivises the SME and voluntary sectors from taking part.

This could certainly help drive the social value agenda, where one barrier to its wider application under the existing rules is that the evaluation criteria for social value proposals must be linked to the subject matter of the contract.

This is one area, however,  where we hope that the new legislation will expressly impose the requirement on contracting authorities to act proportionately.

If you have any queries on the issues raised or on any aspect of procurement, please contact one of our procurement specialists via our procurement hotline on 0330 137 3451