What are the key changes?
Updated 19 January 2024
One of the Government's stated aims in relation to the Procurement Act 2023 (the Act) is to 'embed transparency throughout UK Public Procurement', and notices are a key element of this aim. The Act contains a range of new notices, that will be published centrally, and cover the full procurement lifecycle, from planning to contract expiry.
This update summarises the changes to the "noticing regime" and what public bodies and suppliers need to know.
Publication of contract opportunities and details of awards are an established part of a procurement process. However, the fundamental change to be introduced by the Act is the expansion in notice publication requirements on public bodies.
Currently, the focus is on the procurement stage of a contract lifecycle (i.e. advertising the opportunity and the award of the contract following conclusion of the procurement), with exceptions in respect of modification notices required in limited circumstances during contract delivery. However, the Act requires publication of notices throughout the contract lifecycle from the pre-procurement planning stage to implementation and performance under the contract following award.
This increased scope is split into the following stages:
- Planning Stage
Pipeline Notice: Public bodies which plan to procure more than £100 million of works, goods and services in a given financial year must publish information on potential future procurements they expect to conduct that year (where the estimated contract value exceeds £2 million for the particular contract).
Planned Procurement Notice: This optional notice, similar to the current Prior Information Notice (PIN), may be published to inform the market that a public body intends to publish a Tender Notice at a future date.
Preliminary Market Engagement: This notice must be published when a public body chooses to carry out preliminary market engagement. Under the current regime, details of a preliminary market engagement would typically be included in a PIN but the new regime splits this into two separate notices.
- Procurement Stage
Tender Notice: This is the re-naming of the current "contract notice" which must be published to commence a competitive procurement and invite tenders.
Mandatory Transparency Notice: This notice replaces the current voluntary transparency notice and must be published where a public body makes a direct award.
Below-Threshold Tender Notice: This must be published prior to advertising a 'notifiable' below-threshold contract, which, in the case of central government is a contract with a value between £12,000 and £138,760 (inc VAT); and £30,000 - £213,477 (inc VAT) for non-central public bodies.
- Contract Award and Execution
Contract Award Notice: This must be published when a public body intends to make a contract award (i.e. following conclusion of the procurement but before the contract has been executed).
It is noteworthy that a public body must also publish a Procurement Termination Notice if it decides to abandon a procurement which has been initiated. This is a change from the current position which does not require a public notice when a procurement is abandoned.
Contract Details Notice: This must be published within 30 days of contract execution (i.e. in the period following publication of the Contract Award Notice) or 120 days in the case of Light Touch Contracts. It is envisaged that this notice will contain details on the final value, duration, and extension options within the contract. Where a contract has a value exceeding £2 million, a copy of the contract must also be published.
Below-Threshold Contract Details Notice: as above, but for notifiable below-threshold awards, and must be published as soon as reasonably practicable after the contract has been entered into.
- Contract Performance
Contract Change Notice: This must be published when an above-threshold modification is made to a contract. No publication is required if the intended modification neither increases nor decreases the value of the contract by 10% or less (in the case of goods or services contracts), or 15% or less (in the case of works contracts).
Contract Performance Notice: Where a public body includes certain KPIs within their contract, and the contract value exceeds £2 million, there will be an obligation to publish certain information in relation to a supplier's performance. For example, details must be published in relation to poor performance (or a complete failure to perform) and any breaches of contract.
Payments Compliance Notice: This must be published when a public body makes a payment under a contract, or when a payment becomes payable. These notices must be published within 30 days of the last day of the reporting period.
Contract Termination Notice: This must be published within 30 days of the date of contract termination (natural expiry or otherwise).
- What these changes mean for public bodies
Whilst the motivations behind these transparency reforms are commendable, public bodies will inevitably be concerned by the increased administrative burden of publishing an increased range of information as well as potential risk of liability resulting from, for example, inadvertent data breaches. Most large authorities and utilities are already stretched in respect of procurement resource and the increase in scale from the forthcoming notice requirements will only add to this burden.
The increase in notices, and increased amount of information that will be publically available, could potentially increase the sophistication of potential challenges, as challengers will have more information on which to base a claim. On the other hand, the upfront release of information could result in fewer speculative challenges and requests for disclosure, insofar as the information has already been disclosed.
Public bodies will need to ensure that they have adequate resource to fulfil these increased obligations. Crucially, staff will need to have adequate training in relation to data protection and, what information cannot be released or must be redacted. The inadvertent release of protected information could expose public bodies to data breach claims. Public bodies may also need to invest in more sophisticated data storage solutions.
- What these changes mean for suppliers
The enhanced scope of the noticing regime will provide suppliers with more insight into the procurement process and better allow them to plan for procurement opportunities. It should also allow them to assess their options (such as legal challenge) more thoroughly in the event they are not successful in bidding for a public contract.
However, this transparency goes both ways as more supplier information will be publically-available and open to scrutiny from competitors throughout the contract lifecycle.
Suppliers will also be understandably concerned about the potential release of commercially-sensitive information, and will want assurances that public bodies have systems in place to manage their data.
Similarly, there will be reputation management concerns for suppliers where information is released in relation to their performance. Contract breaches or poor performance will now be recorded on a central digital platform, and suppliers should therefore be certain that they are able to adequately service any public contracts they bid for.
If you wish to discuss the upcoming changes to procurement law, and how they may impact your organisation, you should contact a member of our leading UK Public Procurement team.