Why has the implementation of the Procurement Act 2023 been delayed?
In a written statement to Parliament this morning, Minister Gould announced that the Act will now come into full force and effect on 24 February 2025 rather than the original implementation date of 28 October 2024.
The Act is being delayed to provide the UK Government with further time to update the National Procurement Policy Statement ("NPPS") recognising that the current NPPS (published by the previous administration) "does not meet the challenge of applying the full potential of public procurement to deliver value for money, economic growth, and social value".
The NPPS is a statement published by the Cabinet Office that sets out the UK Government’s strategic aims and objectives in relation to public procurements. Save for some limited exceptions, all contracting authorities must have regard to the NPPS.
The UK Government intends to update the NPPS to make sure the Act "goes live with a bold and ambitious Statement that drives delivery of the Government’s missions". Please see our previous article here for further details abouts the function and application of the NPPS.
The Government Commercial Function has separately confirmed that the "NPPS laid in Parliament on 13 May 2024 [which] was due to come into force on 28 October 2024…will now be withdrawn and a new NPPS, once drafted and following consultation, will then be laid".
What is the impact of the delay?
Procurement pipeline
The most immediate impact will be on contracting authorities intending to imminently procure under the Act rather than the current procurement regulations (i.e. the Public Contracts Regulations 2015, the Concession Contracts Regulations 2016, the Utilities Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011). Until today's announcement, contracting authorities and suppliers would have been working on the basis that the Act was set to come into full force and effect on 28 October 2024 which is only 46 days away.
In light of today's announcement, contracting authorities will now need to carefully consider whether to:
- delay their own procurements to make sure they can still procure under the Act once it comes into full force and effect (and consider any resulting impact on the supply of relevant goods, works or services and on existing contracts which may need to be extended); or
- update their planned procurement processes and procurement documents and procure via the current procurement regulations which will remain in place until 24 February 2025.
In many scenarios, this will be a difficult decision for contracting authorities potentially resulting in increased costs, risk and delay. This is perhaps most applicable to contracting authorities looking to procure Open Frameworks (a key change that was introduced under the Act).
Defined as "a scheme of frameworks that provides for the award of successive frameworks on substantially the same terms", Open Frameworks allow new suppliers to be added at set times during the life of the framework. In this sense, they are radically different from traditional 'Closed Frameworks' provided for under the current procurement regulations where suppliers can only be admitted to a framework at the point at which it is first awarded. Open Frameworks are not permitted under the current procurement regulations which means that contracting authorities looking to procure these type of arrangements will need to either delay their procurements until the Act comes into force or radically amend their planned procurement process and documents in order to procure under the current procurement rules.
Suppliers
Delays to expected procurements introduce uncertainty in terms of the pipeline of work with a consequential impact on resourcing and revenue considerations for suppliers.
Many suppliers will have been using resources to deliver internal training on the implications of the Act and to amend operational processes and policies to align to the Act. This effort may now need to be duplicated in the new year ahead to avoid attrition of learning and to ensure accurate and up to date information.
On a positive note, some suppliers will welcome more time to prepare, particularly those with more complex organisations who need to consider supply chain and connected person statuses ahead of the Act.
Today’s announcement could cause a flurry of procurement activity as contracting authorities determine its better the devil you know and seek to procure via the current procurement regulations.
A smoother transition?
The Minister for the Cabinet Office has stated "the extra time to prepare [as a result of the delay] will allow for a more seamless transition, ensuring a smoother and more effective implementation process for both contracting authorities and suppliers". In one sense, the delay does provide contracting authorities with additional time to:
- update their procurement template documents, contracting standing orders, policies and procedures in readiness for the new implementation date;
- recruit additional resource and specialist expertise; and
- build on their own internal training and development.
In addition, the delay will provide the Cabinet Office with additional time to progress its accompanying guidance on the Act (noting a number of guidance documents have yet to be released).
The Government Commercial Function has confirmed in a separate update that the delay will "not affect the availability or content of any of the official L&D materials, which will continue to be available up to and after the new commencement date".
Where can I get training on the requirements of the Public Procurement Act 2023?
DWF's Procurement Centre of Excellence is hosting a series of online webinars on key aspects of the new regime with practical advice on the impact of the changes for both contracting authorities and suppliers. This includes webinars covering the following topics:
- Introduction to the Procurement Act 2023 (watch here);
- Public Procurement: Direct Awards (watch here);
- The Procurement Act 2023: Procurement documents (watch here);
- The Procurement Act 2023 – Framework Agreements and Dynamic Purchasing Systems (watch here);
- The Procurement Act 2023 – Conducting a lawful evaluation (watch here); and
- Public Procurement: Conflicts of interest (register here).
Further details of our upcoming webinars can be found here.
Comment
Whilst the delay provides further time to reshape the NPPS to help drive "delivery of the Government’s missions" it could also have a practical impact on how contracting authorities procure in the next few months. It may also come as welcome news to many contracting authorities and suppliers given it will provide them with additional time to prepare for the new Act.
DWF Law LLP is one of the leading advisers on public procurement issues. We act for a wide range of clients, including many contracting authorities and key suppliers to the public sector. We have the experience to understand how to apply the detailed technical rules in practice. We help public sector clients to design effective and compliant tender procedures.
Please free to get in touch with our procurement lawyers if it would be useful to discuss any of the issues raised in this article, or other matters related to public procurement.
