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Procurement in a Nutshell – Procurement in a crisis

The Government published its Green Paper "Transforming Public Procurement" on 15 December 2020, with its aim to provide a modern, fit for purpose set of rules, improving and simplifying the procurement process.

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 proposals for procurement in a crisis or emergency.

What the Green Paper said

The Green Paper identified that the current regulations do not provide clear guidance where an urgent procurement is required. It proposed that the current arrangements for limited tendering are retained for instances where a procurement is required due to an urgent requirement brought about by unforeseeable events. However, recognising that it is not always clear when these regulations apply, they proposed introducing a new category to cover a crisis which would count as a local or national emergency. The Minister for the Cabinet Office would have new powers to declare an emergency and activate the provisions, which would then allow limited tendering to proceed. The Paper also proposed the removal of the automatic suspension of a contract award when the award of a contract through the limited procedure is challenged by an unsuccessful bidder. This is to encourage contracting authorities to use the limited procedure rather than the less transparent direct award procedure.

Results of the Consultation

Concerns were raised about the use of the word ‘crisis’, and how it would be defined. The consultation also revealed concerns amongst respondents to ensure that any new category would be transparent and not open to abuse. The government has returned to working on options for the new category but will not be using the term ‘crisis’. Instead, the Government is likely to give the Minister power to ‘declare when action is necessary to protect life’. In doing so, the government was conscious of its obligations under the WTO Agreement on Government Procurement (GPA) and that all measures must be ‘proportionate and non-discriminatory’. Article III of the GPA allows states to take measures necessary to ‘(a) protect human, animal or plant life or health, or (b) protect public order or safety’. Therefore any new powers for a Minister would be limited to rare occasions and subject to the normal parliamentary scrutiny. There would be a new transparency notice for these contracts, allowing them to be open to challenge, which must be published before or alongside the award of the contract.

Respondents were supportive of the proposal to remove automatic suspension provisions when using the limited tendering procedure in extremely urgent situations. This reflects the acknowledgement that contracts often have to be awarded in a hurry but contracting authorities need to have confidence when using the limited tendering procedure that no automatic suspension would follow. The government will therefore be incorporating this proposal.

What this means

The first main difference will be the introduction of a new category, authorised by central government, which will allow the limited tendering procedure to be used for contracts required in urgent situations. Within these provisions, there will be a need for transparency and clearly defined criteria to prevent any abuse of the provisions. The second will be the removal of the automatic suspension provisions for contracts awarded in the context of the new category, although the requirement to publish contract details is intended to ensure clarity and fair process.

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

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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Melanie Pears

Partner | Head of Public Sector

+44 (0) 330 137 3451

+44 (0)789 987 8424

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Tim Care

Partner | Public Sector

+44 (0) 330 137 3458

+44 (0) 752 590 3378

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