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Bidding for and delivering public sector contracts Commercial

Bidding for and delivering public sector contracts

04/04/2024

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If your business supplies the public sector, you will likely be aware that the Procurement Act 2023 is anticipated to come into effect this October.

The new legislation makes a number of changes to the way in which procurement exercises and resultant contracts will operate, and it is important to ensure that you are ready for these changes when they take effect.

In order to help prepare the market for these upcoming changes, the government has published a number of knowledge drops.

Some of these are for the public sector (known as contracting authorities and which includes central government departments and arm’s length bodies, local authorities, NHS organisations, schools, universities, housing associations, utilities and the defence sector), and others are for suppliers, including both larger suppliers and SMEs/VCSEs.

For the public sector supply chain, there are three knowledge drops, which cover the following:

 

Part 1

The first knowledge drop explains the background to the new legislation and the types of contracts it relates to.

It goes on to detail the new objectives which must be considered by contracting authorities throughout the duration of a procurement process, which are:

  • Delivering value for money
  • Maximising public benefit
  • Sharing information
  • Acting, and being seen to act, with integrity
  • Ensuring the equal treatment of suppliers (unless a difference justifies different treatment)
  • Not creating an unfair advantage or disadvantage
  • Having regard to participation by SMEs in order to reduce the barriers they face

It also explains that ministers will have the power to publish a National Procurement Policy Statement, setting out national strategic priorities, and that contracting authorities must have regard to this alongside other local priorities.

 

Part 2

The second knowledge drop sets out changes to the way that procurement exercises will be operated, including:

  • A strengthened approach to conflicts of interest in order to better protect the integrity of procurement exercises.
  • Participation for suppliers will be more straightforward due to the creation of a new, free to access, single central digital platform, based on Find a Tender. This will enable suppliers to locate all opportunities in one place and to set up alerts in order to be notified of upcoming procurement.
  • Greater focus on the wider value and impact of procurement exercises, with a reduced focus on obtaining the lowest price.
  • More preliminary market engagement to allow suppliers to inform contracting authorities about what they can offer and where there are opportunities for innovation. This will help suppliers to shape and inform procurement procedures.
  • Contracting authorities will be encouraged to allow early engagement of suppliers, by reviewing upcoming arrangements and publishing pipeline notices. This is intended to allow suppliers to have sufficient time to prepare to respond to opportunities.
  • Changes to the procurement procedures, where there will be only two options:
    • The open procedure – for straightforward procurements, aiming to reduce the resources which suppliers have to invest in the process
    • The competitive flexible procedure – this will allow contracting authorities to design the procurement to best suit the market and subject matter of the contract. This will make it easier for contracting authorities to consider supplier innovation, e.g. by building in product demonstrations/protype testing.
  • Clearer grounds for Direct Award in only very limited and specific circumstances
  • Changes to the way that frameworks and dynamic markets operate, providing greater flexibility to appoint new suppliers during the term of a framework.

 

Part 3

The third knowledge drop deals with changes to the supplier exclusion regime and the way in which public contracts will be managed, including:

  • The new way of providing feedback to bidders whose tenders are unsuccessful, which will be known as an “assessment summary”.
  • A change so that the contract award notice triggers a mandatory eight working day standstill period.
  • New transparency requirements to publish details of any modifications to a public contract.
  • Publication of suppliers who default under a public contract.
  • Greater requirements regarding the recording and publishing of contract spend.
  • Enhanced 30-day payment terms to ensure prompt payment of main contractors and subcontractors.

 

What do our lawyers say?

Jenny Wade, an associate solicitor in our commercial team, has been advising on public procurement matters for 14 years.

“We would encourage all businesses supplying the public sector to familiarise themselves with the upcoming changes to the law”, said Jenny.

The knowledge drops are a good starting point for beginning to understand how these changes will affect how they do business with the public sector.”

 

For advice on public procurement matters, contact partner and head of commercial, Antony Hall on ahall@mincoffs.co.uk.

 

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