Government response to consultation published

Consultation response

On Friday, the government published its response to the two consultations on the draft regulations that will sit under the Procurement Act 2023 to cover some of the more granular detail of how the new regime will work.

What did we learn from the response?

The response suggests that, while there will be some amendments and updates to the proposed regulations, there are no dramatic changes from what we were already expecting. Some key points to note are as follows:

• Transitional measures: there are no plans to change the transitional measures as originally proposed. Broadly speaking, contracts where a procurement was commenced under the old regime will remain regulated by the old regime. As we understand it, this will be the case even for modifications to those contracts, which will remain governed by Regulation 72 Public Contracts Regulation 2015 (or its utilities/concessions/defence equivalent), rather than by the new Act.
• Interaction between the Act and the Provider Selection Regime (PSR) for NHS healthcare services; healthcare services will remain listed among the Light Touch Regime services included in the Act. This is to allow for the Act to regulate situations where bodies not covered by the PSR are nonetheless buying these kinds of services; guidance will be issued on how the Act and the PSR interact.
• The “Teckal” and “Hamburg” exemptions for in-house contracts/joint collaborations: these exemptions are set out in the Act and will continue to be available. The previous intention was that the regulations would add further detailed provisions around how the various “tests” for control/activity used in these exemptions should be calculated. The response notes that these further details will be left out of the regulations for now, while government thinks further about them, and included in a later set of regulations in June/July, together with issued guidance. The exemptions themselves are not affected.
• The standstill period and assessment summaries: there are a few changes in this area. As you may know, under the Act, an 8-working day standstill period will be commenced by the publication of a “Contract Award Notice” which confirms that an “assessment summary” has been sent to each tenderer. The response confirms that the Contract Award Notice will now not need to name each unsuccessful supplier – unless the value of the contract is large (over £5m). This is to address the perceived reputational risk raised in the consultation if suppliers are routinely unsuccessful.  It also confirms that assessment summaries will not be obliged to explain why, in each case, a tender did not receive the score immediately above (where applicable) – although guidance will make it clear that this will be good practice (and in our view a useful exercise to help test the rational for evaluation decisions). The response confirms that the assessment summary will need to give information to an unsuccessful bidder about the scores/detail of the most advantageous tender; however the more burdensome current requirement to provide “relative advantages and characteristics” will not feature in the new regime (welcome news for authorities).
• Pipeline notices: helpfully the response confirms that there is no intention for authorities to be held absolutely to statements made in the pipeline notice around planned future procurement, rather the intention is that these notices will represent the authorities best estimates at the time of publication. Guidance will address this point.
• Tender notices: the government will adopt the suggestion that tender notices should expressly state if the authority considers the opportunity to be appropriate for SMEs/VCSEs.
• Procurement termination notices: this notice will notify the market that a procurement exercise has been abandoned. Consideration is being given to an optional field to explain why this is the case, suggesting that it will be in the authority’s discretion to choose how much explanation to provide.
• Contract modification notices: under the Act and the regulations, these will be required in advance of almost all modifications. The response notes that administrative questions/matters around how this will work will be addressed in guidance (recognizing that this is a significant change to current practice).

What happens next?

The response notes that final amendments are now being made to the regulations, which we understand will be called the Procurement Regulations 2024, before these are “laid” in Parliament and finalized. There is a commitment to give six months’ notice of the “go live” date for the new Act, and a statement that the date the new regulations are finalized will be the earliest point at which this notice period will start to run. There is a reiteration of the intention for implementation to be in October 2024, suggesting an expectation that the final regulations will be available in April - for an October commencement six months later.

Keep up to date

You can bookmark the Reform page on this website, which we will update with new developments. You can also sign up to the government Transforming Public Procurement mailing list to be notified of updates.