With almost no fanfare, the Procurement Bill became the Procurement Act last week. This does not represent an immediate change in procurement law; for that, further regulations are required. In its press release, the Government has said it expects the new law to come into force in October 2024, and that this will be after a six-month implementation period which, working backwards, we can expect to start in March next year (but we await formal confirmation).
The Government is hailing this new Act as “one of the largest shake ups to procurement rules in this country’s history”. Whether that is right is a debate for another day, but there will certainly be a lot of new terminology and procedures for contracting authorities to grapple with. For the first time we now have all of the procurement rules in one piece of legislation (though to be supplemented by later regulations) and that at least is quite a notable change (albeit one of "form" not substance).
In terms of headline changes:
- The current six procedures will be streamlined into two procedures:
- 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”).
- Contracting authorities (yes, we keep this terminology) will have the flexibility to design their own procedures, provided they are "appropriate" to the procurement in question. While we expect most tender processes will bear the hallmarks of the current procedures (open vs restricted, for the most part), it will be interesting to see the extent to which more innovative procedures will be used as contracting authorities become more familiar with the legislation.
- The objectives behind the Act are different to those under the current Regulations. Currently, the (European) principles of equal treatment and non-discrimination are the building blocks underpinning our current legislation: failure to comply with these principles is at the core of most procurement challenges. In contrast, the new Act’s stated objectives are delivering value for money and maximising public benefit. To many people (procurement specialists included) this is what the procurement rules are understood to be about, so it is good to have this alignment now. Additionally, in our view this will undoubtedly change the way procurement challenges are handled going forward, which may in turn result in a further shift away from the European approach.
- Contracting authorities will be required to issue a lot more notices, throughout the life cycle of the procurement and while the resulting contract is in force. Examples include planned procurement notices, pipeline notices and termination notices.
Of course, there is much that is familiar. We still have a light-touch regime, we still have remedies, and we still have financial thresholds that are not wildly different from those currently in force.
We are continuing to engage with the details of the legislation and will produce further updates in due course, especially as the supplementary regulations (and indeed Government guidance) start to come online.
For now though, it is very much business as usual: any procurements currently underway, or that are about to start, must comply with the current Regulations (as applicable). It may only be as we near the expected date next year, when we know the Act will come into full force and effect, that planning decisions about when to start a procurement (if you have the luxury of that sort of time to plan) will start to factor in the coming into force of the Act.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, November 2023