102: Procurement Bill – latest highlights from Lords Committee Stage

The Government’s Procurement Bill is intended to reform the UK’s public procurement regime post-Brexit. It builds on the Government’s Green Paper ‘Transforming Public Procurement‘ published in December 2020.

Familiar EU concepts and principles of value for money, public good, transparency, integrity, equal treatment and non-discrimination remain cornerstones of the Government’s proposals, with the intention of the Bill being to streamline the current Regulations which were extended post Brexit.

The Procurement Bill began its Parliamentary passage in the House of Lords, and is now at day five of the Committee Stage proceedings. In its current form, the Bill consists of 116 clauses arranged over 13 Parts and 11 Schedules. The list of proposed amendments published by the Grand Committee for the latest debate takes the total to 548 amendments.

In this post we take a look at some of the key changes from the current, EU-derived, regime.

Excluded suppliers and self-cleansing

The Bill creates a new exclusions framework to exclude suppliers who are deemed unsuitable to bid for public contracts. There are a range of mandatory and discretionary grounds, similar to those under current legislation. A ‘debarment’ register would be created to allow Ministers to make a decision to bar individual suppliers from accessing the procurement regime entirely and enable public sector organisations to see which companies should be excluded from contracts. The concepts of ‘excluded’ and ‘excludable’ suppliers have been introduced to make decisions around exclusions simpler, but, as the debate showed, this does not seem to be the case so far. Some clarification was provided on the following:

• a supplier may apply to have their name removed from the debarment list if there has been a material change of circumstances or there is significant information that was not previously considered;
• the contracting authority will undertake the exclusion, not the Government. The contracting authority will notify the supplier that a ground for exclusion applies, the supplier may make representations and submit self-cleansing evidence, following which the contracting authority will weigh up the evidence and decide on exclusion;
• the burden to present remedial evidence to avoid exclusion is on the supplier – lack of or inadequate evidence may give the contracting authorities sufficient reason to conclude that the issues in question are likely to occur again; and
• if a supplier disputes the contracting authority’s judgment on self-cleansing, it may challenge this through the courts under the remedies regime.

Unlike the current legislation, the Bill does not set out the process for self-cleansing. During the debate, Lord Coaker accepted the need for guidance on self-cleansing to accompany the legislation, giving an assurance that this would be published as part of the implementation package for the Bill.

The relevant clauses (54 to 61) will be the subject of debate during the next day of the Committee Stage proceedings.

MAT not MEAT

The Bill provides that a contracting authority may award a public contract to the supplier that submitted the most advantageous tender, not the most economically advantageous tender, in a competitive tendering process. This change seems to be about refocussing minds away from price and cost to support wider issues such as carbon net zero and social value which align with wider government priorities (contracting authorities must have regard to these as part of the National Procurement Policy Statement). The Government clearly views procurement as an effective instrument for delivering Government policy objectives, and not merely as a means of securing best value for contracting authorities.

Competitive tendering flexible procedure

The Bill replaces the currently prescribed procedures with (1) an open procedure (a simple, single-stage procedure) and (2) a competitive tendering procedure (at the discretion of the contracting authority). Direct awards will still be permissible in specific circumstances.

Amendments were agreed to refer to a competitive tendering flexible procedure, replacing the current drafting that refers to ‘a competitive tendering procedure other than an open procedure’ to make it easier to understand the two types of procedure. The flexible procedure will allow for negotiation and discussion of the requirements, which is limited under the current rules, to ensure that requirements are understood and best value is obtained.  Contracting authorities must consider what is proportionate, having regard to the nature, complexity and cost of the contract, which aims to prevent the procedures becoming overly burdensome for suppliers.

Next steps

The Committee Stage proceedings in the Lords will continue with day six on 12 September 2022, with additional days added if required.