Procurement Act 2023: five months until “Go Live”

Insight

20.05.2024

This article is part of a series that looks at the impact of the Procurement Act 2023, which is coming into effect on 28 October 2024. For more on the topic, please see Preparing for the Procurement Act 2023: transitional arrangements and Procurement Act 2023: who needs to comply? Other articles will follow in due course.

This means the existing regulations (most importantly the Public Contract Regulations 2015, but also the Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016) will continue to apply to all procurements started prior to 28 October 2024. All procurements started on or after 28 October 2024 will be subject to the provisions of the Procurement Act 2023.

This article summaries the key changes. It is the first of a series of articles on the impact of the Procurement Act 2023.

What is new?

The Act consolidates all public procurement regimes into a single piece of legislation, albeit one which is supplemented by several fairly lengthy regulations that provide some of the critical details.

The biggest change rendered by the new legislation is the removal of the current six procedures, to be replaced with two:

A single stage tendering procedure, without restriction on who can submit tenders (“open procedure”), and
Any other competitive procedure as the contracting authority considers appropriate (“competitive flexible procedure”).

While some contracting authorities will relish the flexibility this brings, others will undoubtably stick with the tried and tested models, at least while the new legislation (and resulting industry practice) beds down.

We will have to get used to new procurement terminology. For example:

MEAT (most economically advantageous tender) becomes MAT (most advantageous tender), to reflect the fact that contracting authorities can take a broader view of what can be included in the assessment of tenders.
Ineffectiveness becomes contract set-aside.
Negotiated procedure without prior publication becomes direct award.

Instead of the legislation being underpinned by EC Treaty principles of transparency, equal treatment, and open competition, we now have the UK’s procurement objectives, which describe the importance of delivering value for money and maximising public benefit. Embedding these objectives into the legislation may, we suspect, result in differences in the nature of procurement challenges being brought and handled by the courts in the future.

In an effort to promote transparency in public procurement, public bodies will be required to publish a lot of notices throughout the procurement lifecycle, which will significantly increase the burden on procurement professionals working for contracting authorities. For example, Contract Performance Notices must be submitted annually for any contract that contains key performance indicators. The rules around contract modifications are relatively unchanged, but now whenever a contract is modified within the confines of the legislation, a Contract Change Notice must be issued (subject to some carve-outs for minor changes). To remain compliant with these transparency requirements, procurement teams will need to stay more closely involved with all publicly procured contracts throughout their lifecycle.

What is the same?

A lot. The UK still must comply with its obligations under the World Trade Organisation’s Agreement on Government Procurement (GPA). The EU rules were heavily informed by the GPA, and so it should be no surprise that the new rules do not represent a complete departure from what’s gone before.

The financial thresholds, and which organisations will be caught by the rules will largely remain the same, as will the remedies for breaches.

The UK Government has taken the opportunity to rewrite the provisions using more standard, and simplified, English. Some may recall that the previous regulations were produced using the “copy-out” method of drafting: to the extent possible, the language of the EU Directives was replicated in the UK regulations to avoid any room for arguments or the risk of gold-plating the provisions. While this was sensible at the time, it did make for some very long and laboured provisions. For an example of the changes, see the new simplified definition of a contracting authority (something we analyse in greater detail in Procurement Act 2023: who needs to comply?)

The simplified language is welcome, though time will tell on the extent to which this language will have any meaningful impact on how the rules work in practice.

Next steps

Procurement professionals have been gearing up for some time for this new regime, and the Government has issued a fair amount of guidance on the new legislation to enable contracting authorities to implement the new legislation when the time comes.

We at Farrers are also continuing to ready ourselves, and over the next few weeks will be issuing a series of related articles focusing on some of the key areas we most regularly advise on, and how the new legislation impacts on them.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.