Procurement in a Nutshell – Streamlining the procurement procedures

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 to replace the existing seven procedures with three procedures.

What the Green Paper said

The Green Paper explained that there are currently seven procedures available to contracting authorities and utilities and that the Concession Contracts Regulations 2016 also allow buyers the freedom to devise their own procedure.

The Government commented that there is much overlap between those procedures and that those procedures which allow dialogue and negotiation can be too restrictive. It also pointed out that in fact those procedures which allow for some form of negotiation accounted for less than 10% of all advertised contracts awarded in 2016-18, with the restricted and open procedures being the most common.

The Green paper therefore proposed that the seven procedures be replaced with three modern procedures.

Results of the Consultation

The consultation responses were largely in favour, although many commented that the new flexible procedure might prove to be more complex. The Government has taken that on board, but still intends to go ahead with its proposal for three new procedures:

• The ‘open procedure’ that buyers can use for off the shelf competitions;
• The ‘flexible competitive procedure’ which will give authorities the ability to negotiate and innovate. The approach would be similar to the current Light Touch Regime, giving authorities the flexibility to design the right process for their procurement; and
• A ‘limited tendering procedure’ that can be used in certain circumstances, such as extreme urgency. This would effectively be the existing ‘negotiated procedure without prior publication’ and would still only be available in limited circumstances.

In response to concerns that the new flexible procedure could lead to more complexity, the Government has said that it may require more thought and effort in the pre-procurement stage, but that this will mean those procurements will be better designed and managed. Authorities will be required to set out in the Tender Notice how the procurement process will function, including any conditions for participation, time limits, evaluation criteria and the phases (if any) of a multi-stage procedure. The Government has said that it will issue guidance to support the new flexible procedure, including template options and case studies.

The Government does propose to include an additional circumstance in which the limited tendering procedure could be used – effectively a ‘crisis’. We shall cover this in a later Nutshell.

The Green paper also proposed removal of the Light Touch Regime, but as a result of comments it seems that this will be retained in some circumstances. Again, we will cover this in a later Nutshell.

What this means

The main change will be the application of the new flexible competitive procedure. Like the current Light Touch Regime, there will be flexibility when designing that procedure, so long as it meets the proposed principles of public procurement.

Whilst that may sound as though it will create much work for contracting authorities, at least in the early days of the new legislation, we believe that much of the existing good practice that has built up around the existing competitive procedure with negotiation and competitive dialogue, will still be relevant. Government guidance may also help, but there will be other changes (dealt with in later Nutshells) such as new transparency requirements, changes in the grounds for exclusion and changes to evaluation which will also have an impact.

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