Season's greetings from the procurement team at Mills & Reeve - and an update on the Procurement Bill

The Procurement Bill continues its steady march towards the statute books. On 14th December, having completed its time in the House of Lords, a new draft of the Bill was introduced to the House of Commons where it had its first reading (a formality only). The Commons begins it substantive review of the Bill on 9th January 2023, when the Bill has its second reading and further amendments may be proposed and considered. 

Our previous post covered some of the changes made at the committee stage in the Lords and published in the second draft. Since that draft, new amendments have been agreed at report stage in the Lords and included in this latest draft. Highlights of the latest draft are as follows:

Definition of “contracting authority”
The latest draft uses the concept of “operating on a commercial basis” as part of the test for whether an organisation is a “contracting authority” for the purposes of the Procurement Bill, and provides some useful factors that can be used to assess this. For example, an organization is likely to be a “contracting authority” if it:

• operates on the basis that any losses it makes will be borne by, or that its continued operation will be secured by, a public body; or

• enjoys favourable terms and conditions thanks to its association with a public body; or

• operates in a market which is not subject to full and effective competition.

This is not a new test, but it is expressed in slightly different language to the current test; it will be interesting to see if the new wording either (a) provides or (b) closes down any flexibilities in this context. 

Duty owed by contracting authorities to SMEs
The latest draft of the Bill now contains an express duty (within clause 12 on procurement objectives) to consider the barriers faced by SMEs and how these could be removed or reduced. 

Publication of Tender Notices
Clause 21 contains a new provision expressly forbidding authorities from inviting suppliers to tender unless they are properly satisfied that the procurement documents contain sufficient information to allow suppliers to prepare that tender. 

Selection Criteria (known in the Bill as 'Conditions of Participation')
Under new clause 22, authorities may not require insurance relating to contract performance to be in place prior to contract award, nor, with exceptions, may they require the submission of annual audited accounts by suppliers. If the new terminology of the Bill is confusing you, do check out our Procurement Phrasebook for help.

Increased threshold for publication of KPIs 
Clause 52 requires authorities to set and publish performance against three KPIs for major contracts. In the latest draft, the threshold for a contract to qualify as a major contract has been raised from £2 million to £5 million, to reduce burden on contracting authorities. 

New duty on Minister to provide online digital platform
Clause 93 creates an express duty on the government to provide an freely accessible online digital platform.  The government has provided an update on this, which is being developed out of the Find a Tender service to cover the whole lifecycle of a procurement. Authorities will be able to continue to use e-notice providers, or alternatively to file notices themselves directly (government is engaging with e-notice providers on this at present, with beta testing expected from Spring 2023).

Next steps
The Bill is likely to receive Royal Assent in Spring 2023, and we can expect the various learning and development offerings to start coming out of government in the first half of 2023. There will be a six month preparation period before the new act comes into force, and it may come into force in successive stages rather than all in one go.  You can keep up to speed with procurement law reform right here on our procurement portal, at www.procurementportal.com/reform -  where you can find all our latest materials, plus a list of useful links and resources.

With season’s greetings to all our readers from all of us in the procurement team at Mills & Reeve – we look forward to working with you in 2023 and to an exciting year ahead for all those working in our field.