Public procurement rules are essential for regulating how public authorities purchase goods, services and public infrastructure from private sector suppliers. Remarkably, around one-third of the public sector's financial resources are allocated to procurement.
As such, the UK Government recognises the need to reform its existing procurement rules, which were formerly based on EU legislation, as a valuable opportunity to adapt the procurement framework to align more closely with the country's specific needs post-Brexit.
This reform effort aims to:
Simplify procurement processes
Reduce administrative red tape
Provide a more accessible pathway for new businesses, particularly smaller, local companies, to participate in the market and secure public contracts
The Government initially presented its reform ideas through a ‘green paper’ focused on reshaping public procurement in December 2020. These proposals were open to public consultation, which continued until March 2021. Subsequently, in December 2021, the Government released its official response to the feedback received during the consultation period.
In May 2022, the Government unveiled its plans to introduce a Procurement Bill, which was then introduced in the House of Lords. The legislative process advanced, with the Bill successfully passing through the Lords stages on December 13, 2022.
What is a Procurement Bill?
A Procurement Bill is a legislative proposal designed to regulate how the UK Government and public sector entities purchase goods, services and public infrastructure from private sector suppliers.
Such bills lay out rules, procedures and guidelines that govern various aspects of the procurement process, including supplier selection, contract awards and transparency in public spending.
These bills are typically introduced to address and update existing procurement regulations, align them with the Government's policy objectives and create a legal framework that ensures fair competition, value for money and accountability in public procurement.
The specifics of a Procurement Bill may vary from one version to another, but their primary goal is to improve procurement practices and outcomes for the Government, businesses and the public.
What is changing in the 2023 procurement bill update?
The Procurement Bill aims to replace the existing procurement regulations, which are currently rooted in EU law. Instead, it intends to establish fresh guidelines and processes for central Government departments, their related entities and the broader public sector when they are in the process of selecting suppliers and granting contracts that exceed specific monetary thresholds.
Additionally, the Bill includes provisions to address smaller contracts that fall below these established thresholds.
Ensuring optimal value for money and aligning with national strategic priorities.
The Bill seeks to establish a fresh supplier selection framework, founded on principles of fairness, non-discrimination, transparency, integrity and the maximisation of public benefits. While prioritising value for money remains a cornerstone of procurement, the Bill mandates that public sector procurers adopt a broader perspective, taking into consideration the national strategic priorities articulated in the National Procurement Policy Statement (NPPS).
The NPPS encourages public entities to contemplate broader societal advantages throughout the procurement process, including factors such as:
Addressing environmental concerns
Enhancing supplier diversity
This shift also empowers authorities to explore opportunities to support local community interests through their public procurement activities.
A unified framework
The proposed legislation aims to amalgamate the existing four sets of regulations, which currently translate EU Directives into UK legal standards, into a singular comprehensive framework. This unified framework would encompass regulations governing:
Public contracts, applicable to numerous central Government departments, their associated entities, and the broader public sector, including local Government, health authorities, and educational institutions.
Utilities contracts, pertaining to utilities operating within the water, energy, and transportation sectors, with exceptions for private utilities engaged in competitive markets.
Concession contracts, addressing agreements where public authorities grant suppliers the rights to exploit works or services.
Defence and security contracts, specifically designed for this sector.
Procurement in devolved regions
The proposed legislation would extend its scope to encompass procurement activities conducted by devolved authorities in Wales and Northern Ireland.
Notably, Scotland would retain its distinct legal framework for procurement, but the Bill would include provisions for managing cooperative and cross-border procurement arrangements involving Scottish contracting authorities.
Fulfilling international commitments
The proposed legislation would ensure that the UK fulfils its international commitments regarding public procurement, as outlined in treaties to which it is a signatory.
These commitments encompass agreements such as the World Trade Organization (WTO) Agreement on Government Procurement (GPA), the Trade and Cooperation Agreement (TCA) with the European Union and various other bilateral and multilateral accords.
How will the 2023 procurement bill work?
The proposed legislation takes a comprehensive approach to overseeing the entire procurement process, covering every stage of a contract's existence. This starts with the initial assessment by a public authority, known as the contracting authority, regarding their procurement needs.
It then extends to the evaluation and selection of potential bidders, the consideration of their proposals, the eventual contract awarding, and continuous monitoring of contract performance until its conclusion.
Introducing an innovative 'noticing' system, the Bill seeks to elevate transparency levels across the complete procurement lifecycle. This entails proactive disclosure of information concerning future procurement plans, the dissemination of details regarding upcoming contract opportunities, the release of procurement outcomes and the provision of data on contract performance.
To streamline procurement processes, the Government has ambitious plans. These include:
The establishment of a unified platform for accessing procurement-related data.
The creation of a public debarment list for excluded suppliers.
The implementation of a simplified 'tell us once' system for supplier registration.
The introduction of various innovative solutions to enhance the procurement landscape.
Effects of the Procurement Bill 2023 on businesses and suppliers
The proposed Procurement Bill 2023 could have significant implications for businesses seeking Government contracts, potentially reshaping the landscape in two key ways: increasing competition and imposing heightened compliance requirements.
Under the Procurement Bill, a more transparent and inclusive procurement process will be established. This may lead to a broader pool of businesses being aware of and participating in Government contract opportunities.
With enhanced transparency and pre-procurement notices, more businesses, including smaller and local enterprises, will become aware of upcoming contracts, reducing information asymmetry.
This increased competition may drive innovation as businesses strive to differentiate themselves, leading to improved quality and value in Government contracts.
The Bill may introduce stricter compliance requirements for businesses bidding on Government contracts. This could include adherence to specific ethical, environmental or social responsibility standards.
As such, to be eligible for Government contracts, businesses might need to demonstrate compliance with these new regulations, potentially necessitating additional documentation, reporting or certifications.
Therefore, compliance requirements could vary depending on the nature of the contract, potentially making it more complex for businesses to navigate the procurement process.
Effects of the Procurement Bill 2023 on taxpayers and the public
On the other hand, increased competition and more stringent regulatory measures are likely to impose the following benefits to the public:
Improved public services
The Bill's emphasis on transparency, competition and the efficient allocation of taxpayer funds in Government procurement processes has the potential to result in better public services. This means citizens may experience more effective and value-driven delivery of essential services as suppliers compete to provide the greatest value for money.
Environmental and social responsibility
The Bill includes provisions aimed at promoting environmental and social responsibility in Government procurement. This focus could lead to Government contracts that prioritise sustainability, climate action and responsible business practices.
As a result, taxpayers may witness a more environmentally conscious and socially responsible public sector. Evidence of this is already being shown through increased emphasis on social value measures.
Accountability and transparency
The Bill's provisions for enhanced transparency and accountability in procurement can contribute to the public’s confidence in how taxpayer money is spent. With clearer reporting and oversight mechanisms, taxpayers gain a better understanding of Government spending decisions.
The Bill's consideration of broader public benefits, such as local job creation and support for community priorities, could directly impact taxpayers. This approach may lead to increased support for local businesses and, in turn, foster economic growth and development within communities.
Access to information
The proposed 'noticing' regime and the establishment of a single platform for accessing procurement data can provide the public with easier access to information about Government contracts and opportunities. This increased access empowers the public to stay informed about Government actions and decisions related to public procurement, ensuring greater transparency and engagement in the process.
When can we expect more changes to the procurement bill?
The House of Commons approved the Procurement Bill with amendments on June 13, 2023.
It is currently under the review of the House of Lords, where they will assess the amendments made in the Commons, with the deliberation scheduled for September 11, 2023.
How can Thornton & Lowe support you to navigate changes to procurement bills?
There are several areas where Thornton & Lowe can provide support to ensure you are in the best position to navigate any future changes to procurement regulations. These regulation changes are coming into place to support SMEs, making tendering more accessible and simplifying existing systems.
Understanding the latest advancements in procurement best practice could be the ideal way to begin preparations for the release of new opportunities. Equipping yourself and your team with this key knowledge will ensure you approach all new tenders with clarity and confidence moving forward.
Our team of highly experienced Bid Writers can assist you to complete tenders and ensure the key evidence you may require is in place. Thornton & Lowe can help you add significant value to your offering, showcasing your services to the best of your abilities in order to win work - just get in touch.