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Latest 24 June 2022

The Procurement Bill has great potential. Here’s how to meet it.

With memories of the Government squandering billions in public money on dodgy PPE contracts and its unlawful VIP lane for political connections still fresh in our minds, we commissioned Patrick Halliday, a leading barrister in the field of procurement law, to review the proposed Procurement Bill currently being debated in the House of Lords.

The new Bill offers some hope for clearer, more effective procurement, but it also contains a number of worrying omissions and areas of concern. Here’s our quick review of the welcome elements in the Bill, and the shortfalls that must be fixed before this becomes law.

We invite all those interested in ensuring that the UK’s procurement policies and processes are transparent, fair and good value for taxpayer money to read the advice. We are publishing it in full here.

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3 things to be welcomed in the proposed Procurement Bill

1) The Bill would simplify and clarify the UK’s current raft of procurement laws. It replaces four different sets of Regulations with a single Act, and reduces a wide array of procurement procedures into just two.

2) New publication requirements in the Bill should promote transparency and accountability for public bodies, and help suppliers better understand demand for their goods and services. Although the Bill says little about what information must be published, leaving that to future secondary legislation.

3) The Bill could improve the chances of small businesses winning and benefitting from public contracts. For example, contracting authorities will be obliged to consider whether a procurement can be subdivided into lots, which could then be fulfilled by smaller firms.

7 things that need to be fixed

1) The Bill gives Ministers sweeping powers to change the law through secondary legislation and leaves key parts of the regulatory regime to Ministers rather than Parliament. The transfer of responsibility for important legislation away from Parliament and towards Ministers raises serious concerns about the ability of MPs to scrutinise Government legislation.

2) The Bill provides for “exempted contracts”, which effectively fall outside the Bill’s drive for fairer and more transparent and competitive procurement. While there are good reasons for some exemptions, the range is unjustifiably, and worryingly, wide.

3) The Bill substantially deregulates so-called ‘light touch’ contracts and gives the Government the power to define any services as ‘light touch’. Light touch services may include social and healthcare services, or any others designated by the Government. There are no restrictions on how far a light touch contract can be modified without the need for a new competitive procurement process to take place.

4) The Bill loosens the rules around how contracts can be modified without a new procurement process. If the original contract provides for possible modification, even in an open-ended and imprecise way, any such changes can be made as long as they “would not change the overall nature of the contract”. This bakes-in the risk of contracting authorities bypassing the requirement for fair competition by simply extending an existing contract.

5) The Bill removes the current duty of transparency in public procurement, leaving contracting authorities with wide discretion to decide how much of a priority it should be. The Bill itself doesn’t require contracting authorities to give reasons for deciding to award a contract to a particular supplier. And instead of mandating clear criteria for how a contract is awarded, the Bill merely requires decision-makers to be “satisfied” that their award criteria are “sufficiently clear”, leaving this important requirement to their own subjective assessment.

6) The Bill gives authorities the power to grant a contract via ‘direct award’ where a full-blown competitive procurement exercise would be inappropriate. However, it does not require them to consider whether to have at least some competition for such contracts. This will undermine other efforts to improve competition and transparency.

7) The Bill is not clear as to who is a contracting authority, and therefore bound to comply with the new legislation. It is also strangely silent on the circumstances in which a contracting authority may or must reject an “abnormally low” tender.

This Bill is due to be discussed in the Lords in early July. We hope that as they review it, Peers are able to clarify its language and close its loopholes. The Bill could be a great leap forward, but without action it risks crash landing as just another missed opportunity.

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