Introduction of the Procurement Act 2023

The current procurement regime (‘the legacy Acts’) in England, Wales, and Northern Ireland is covered in whole or in part by legislation such as: 

The Procurement Act 2023 applies to all procurement events awarded by ‘contracting authorities’ such as public sector bodies, certain utility providers, and private entities carrying out public functions or services under specific circumstances. Notably, ‘the Act’ does not apply to purely private contracts. The general principles of contract law and any sector-specific regulations will continue to govern those contracts. However, if a private entity is funded by public money or is executing a contract for a public authority that meets ‘the Act’s’ thresholds, it might need to adhere to the procurement rules for that contract. This can occur in public-private partnerships or when private entities manage public infrastructure projects. There are key exclusions for specific central government departments. The Security Services, GCHQ, and the Secret Intelligence Agency are exempt from the regulations under ‘the Act’, as is the Advanced Research and Invention Agency. All of which will continue to be governed under the existing applicable legislation.

There are transitional arrangements for those procurement events that commenced before ‘the Act’s’ enforcement date. A procurement event is considered ‘commenced’ if a notice has been published, a request for tenders has been issued, or an invitation to negotiate has been sent under the applicable rules of the legacy regulations. Those events that commenced before the enforcement date will continue to be governed by the legacy regulations applicable at the commencement date. For ongoing contracts, i.e., those entered into under the legacy regulations, they will remain valid and enforceable according to those legacy regulations and not the Procurement Act 2023. A public procurement event that commenced after the enforcement date will be subject to the Procurement Act 2023 unless the contracting authority is a ‘Devolved Scottish Authority’; in which case, it would be governed by whichever of the ‘Scotland Procurement Acts’ the event falls under.

The existing sets of procurement regulations are effectively merged into a unified legal framework, which should help streamline procurement processes. In addition, ‘the Act’ mandates broader transparency by requiring the publication of key documents and access to a new central platform for procurement data—all to enhance accountability.  

Under the legacy regulations, a notable concern was the inflexibility of the procurement processes. The ‘new Act’ addresses this issue by promising enhanced flexibility. An ‘Open Procedure’, suitable for straightforward procurement events, remains in place. A competitive, flexible procedure has been developed to allow contracting authorities to design their tender processes to suit complex or innovative procurements. For those urgent situations, a negotiated procedure remains available.  

Clause 12 of ‘the Act’ emphasises the objectives of a procurement event, explicitly stating that "delivering value for money" is the first stated objective, followed by "public benefit," "sharing information," and "acting, and being perceived to act, with integrity." This clause also incorporates provisions that facilitate easier access to procurement events for SMEs. The practical implications of this will be clarified next year as contracting authorities begin to interpret the regulations for upcoming events.

Clauses 50 and 51 establish more specific regulations concerning notices and standstill periods. While these aspects were previously defined through legacy regulations and legal precedents, the Act redefines the fundamental requirements for both. In conjunction with Part 10 of ‘the Act’, which outlines the necessary measures for 'Procurement Oversight,' the new legislation appears to enhance the transparency of procurement events. Whether that translates from theory to practice remains to be seen, but the regulatory framework seems to be in place to manage the same.

 

Government policy can change several times in the intervening period between general elections. While a government can direct the interpretation of a procurement policy on local authorities of the same political party, it is significantly more difficult to make local authorities of opposing parties bend to a government’s political will. Step forward the ‘National Procurement Policy Statement’ (NPPS). Clause 13 gives the NPPS a statutory basis, and Clause 13(9) requires that “A contracting authority must have regard to the national procurement policy statement.” It remains to be seen what impact a statutory NPPS will have on public procurement.

The new legislation establishes a 'Debarment List' maintained by the Cabinet Office, identifying suppliers barred from engaging in public procurement activities. There are established procedures for appealing any disbarment and removal from the list. Additionally, the legislation introduces Schedule 6 and Schedule 7, outlining specific circumstances that could mandatorily or optionally exclude a supplier from public procurement participation. Suppliers must recognise that the grounds for exclusion may pertain to both the supplier and/or any ‘connected persons’ - e.g. a director, owner or person with significant control, parent company, or predecessor company. In addition, if a supplier lists a subcontractor who is or would be barred under the legislation, that may bar the supplier from ongoing participating.

The reasons for exclusion are wide and varied: e.g. corporate manslaughter, terrorism, theft, fraud, bribery, money laundering, labour market infringements, employment agency ‘offences’, gangmaster licensing, minimum wage adherence, organised crime, tax offences, cartel offences, ancillary offences including aiding and abetting, inciting others to commit an offence, conspiring to commit an offence, national security, tax misconduct including offences relating to VAT and PAYE, and competition law. Suppliers looking to participate in public procurement events must ensure that they, or connected persons, do not fall foul of rules relating to disbarment and take whatever steps are necessary to protect their reputation going forward.

Undoubtedly, the Procurement Act 2023 has its benefits over the disparate regulations of the past. Suppliers and contracting authorities can navigate the procurement process more efficiently and clearly through one rule book that effectively applies to most public procurement events. This streamlined approach should reduce confusion and inconsistencies, fostering a more competitive environment where suppliers can confidently participate. Moreover, emphasising transparency and accountability within the new framework will enhance trust between contracting authorities and suppliers, ultimately leading to better outcomes for public projects. As stakeholders adapt to these changes, it will be crucial to monitor the implementation of ‘the Act’ and address any challenges that may arise to ensure its intended benefits are fully realised.