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New Public Procurement legislation announced
For anyone involved in public procurement, whether a contracting authority or supplier to the public sector, the announcement of a new Procurement Bill in the Queen’s Speech to create a more simple and transparent system will come as a relief.
This follows the publication of the National Procurement Policy Statement in June 2021, after a public consultation, the stated aims of which are to “support the delivery of public sector policy priorities, including generating economic growth, helping our communities recover from the Covid-19 pandemic, and supporting the transition to net zero carbon”.
Post-Brexit, the new legislation will replace the current Public Contracts Regulations 2015 which enshrined European Union legislation into UK law.
The importance of a fit for purpose procurement system cannot be understated. At around £290 billion per year, public procurement accounts for around a third of all public sector expenditure.
The government’s stated aims are to open up public procurement to new entrants, such as small businesses and social enterprises, so that they can compete for and win more public contracts, and also to embed transparency throughout the commercial lifecycle of a contract so that the spending of taxpayers’ money can be properly scrutinised.
The accompanying Policy Statement makes it clear that the key social, environmental and economic priorities of public procurement are to:
- create new businesses, new jobs and new skills
- tackle climate change and reduce waste, and
- improve supplier diversity, innovation and resilience
Of course, the ultimate focus of any procurement exercise is to achieve value for money by the appointment of contractors and suppliers with the best mix of quality and effectiveness to deliver the requirements of the contract.
It should be reiterated that best value does not mean contracting authorities should select the lowest price. Instead, contracting authorities (when setting evaluation criteria) and suppliers (when submitting tenders) should think bigger picture in terms of social, environmental and economic benefits as well as the quality of the products and services to be delivered.
It is intended that delivery will be assessed by Key Performance Indicators (KPIs) relevant to the objectives of the contract, but which should be proportionate to its value and complexity. It is also proposed that there will be new rules to tackle unacceptable behaviour and poor performance.
The new legislation will establish a single digital procurement platform for the publication of opportunities, and also a system to allow contracting authorities to buy “at pace” if necessary to protect life, health, public order or safety – an issue which grabbed headlines for the wrong reasons during the Covid-19 pandemic.
The Bill is due to have its Second Reading in the House of Lords on 25 May 2022 and may come into force by the end of the year.