Almost a year from publication of its "Transforming Public Procurement" Green Paper, the Cabinet Office has published its 76-page response to the consultation which concluded in March this year. While many of its proposals are being maintained, there are a few notable changes set out in this article.
At around £300 billion annually, public procurement accounts for a third of all annual public expenditure. The Government's proposed changes in the Green Paper aim to simplify public procurement and make it quicker and responsive to innovation. While we will be hosting a webinar going into detail on the response to the consultation in the New Year, we've set out a dozen of the key points from our initial review:
1) Of 619 responses received, just over a third (226) were from public bodies (with half of these being from local government and only 32 from central government). The rest were from suppliers to the public sector (269) and third parties such as academics and lawyers (124).
2) The single legal framework proposal is being maintained (81% of respondents supported this) but the light touch regime will no longer be scrapped as originally envisaged. Instead, it will be retained with "improvements to its scope and application". Flexibilities in the UCR (e.g. qualification systems) and DSPCR will also be maintained.
3) Despite acknowledging the concerns that the competitive flexible procedure could introduce more complexity due to its potential for multiple variances in procedures, the proposal is being maintained and guidance will be issued with template options for public bodies to consider when using the procedure.
4) While the focus of reform is still on resolving disputes earlier and faster, the following proposals in respect of challenges are being scrapped:
- the cap of damages at 1.5 x bid costs + legal fees (acknowledging that cap on damages could have the unintended consequence of increasing the number of challenges);
- independent in-house review;
- use of an existing tribunal to deal with low value claims; and
- stating that pre-contractual remedies have primacy over post-contractual damages.
5) A new test will be introduced regarding lifting automatic suspensions. While the options are still being worked through, it is envisaged that this will be a single-limb test which provides for suspensions to be lifted where there are "overriding consequences for the various interests concerned".
6) Despite only being supported by 20% of respondents, debrief letters are still being scrapped. Public bodies will, however, still be required to provide redacted evaluation documents for the successful bidder as well as the bidder in question but with the burden falling on the unsuccessful bidder to compare the relative advantages of the winning bid against their own. This may actually cause more issues than the current situation if it is unclear why a successful bidder has scored higher.
7) The proposal for a new unit to oversee public procurement with powers to review and intervene in procurement processes is being watered down in light of the potential issues with interaction with the formal route of challenge. (52% of respondents supported the concept of this unit.) Instead, the "Procurement Review Unit" will be a small team within the Cabinet Office, acting in the same way as the PPRS but focusing on addressing systematic breaches across public bodies.
8) The Government will introduce the majority of its transparency proposals but suppliers will welcome its confirmation that bids will not be disclosed due to their potential to distort future competition. However, suppliers may be less enthusiastic about the proposal for Award Notices to include the identity of all (i.e. unsuccessful) bidders. In the face of concerns in relation to the administrative burden of the transparency proposals, however, the response confirms that publication of contract documents will be required where the contract has a value exceeding £2 million (though warning that this threshold may be lowered in the future).
9) The response also includes a proposal to add a new contract modification "safe harbour" to assist with modifications of "complex" contracts where modifications are driven by events outside the control of both the public body and supplier, though options are being explored as to how best to facilitate this.
10) The proposal for a centrally-managed debarment list received widespread support (80% of respondents) due to its promotion of consistent decisions in respect of supplier behaviour.
11) The plan is to give 6 months' notice before "go-live" once the legislative process has concluded but this is not expected until 2023 at the earliest. Until then, the existing legislation applies. A learning and development programme is also planned to be rolled out once the new regime is introduced.
12) The new regime will apply to all public bodies in England and while Welsh public bodies will be included in the UK bill and "discussions" with the Northern Ireland Executive are taking place, there is no mention of Scottish Government.
The Cabinet Office has demonstrated that while it will push ahead with the majority of its proposals, it has accepted where it needs to re-consider or abandon certain proposals. These will likely be welcomed by both the public and private sector (particularly in respect of the challenge proposals).
DWF's award-winning public sector team is on-hand to advise on the existing regime as well as what the reforms will mean for both public sector purchasers and private sector suppliers, please get in touch to find out how we can help your business.
