The Procurement Bill

The Procurement Bill passed through its final stages in the House of Commons on Tuesday, 13 June, with several amendments. This blog gives an overview of those key amendments as well a wider update on the expected timeline for the implementation of the Procurement Bill.

As discussed in our last blog, ‘The Procurement Bill: New National Security Provisions’ several conservative backbench MPs (including former cabinet minister Sir Iain Duncan Smith) tabled a series of amendments regarding firms that may pose a risk to national security by bidding for public contracts. In response the Government put forward amendments to address these concerns. The wider debate on national security concerned the obligations that Chinese companies have to the Chinese Government under current Chinese legislation and how this may lead to surveillance of UK public authorities who use the goods and services of Chinese companies. Alex Burghardt, the Parliamentary Secretary for the Cabinet Office, said of the government’s amendments:

‘[The Government’s] Amendments… significantly strengthen the exclusions and debarment provisions for exclusion on national security grounds. As the Bill stands, placing a supplier on the debarment list on national security grounds will make it excludable from all contracts within the scope of the Bill. That means that the supplier will be identified as posing a threat to the national security of the UK, but contracting authorities will have discretion as to whether they exclude the supplier in each particular procurement.’

The Government’s amendments placated the concerned MPs who did not pursue their own amendments. The procurement bill now has significant provisions on excluding firms who are a potential threat to national security.

The other key amendment of note concerned a new clause 15 regarding records to be kept on material decisions taken by contracting authorities. The new clause states that a contracting authority must ‘keep such records as the authority considers sufficient to explain a material decision made for the purpose of awarding or entering into a public contract’. A decision is ‘material’ if the contracting authority is either required to publish or provide a notice, document or other information in relation to the decision or to make the decision. Regarding the new clause 15, Alex Burghart stated:

‘Records must be kept for three years from award of, or entry into, a contract—or, if the contract is awarded but not entered into, from the date of the decision not to enter into it. the obligations attach only to the award of, and entry into, contracts; they do not apply to the management stage of a contract.’

The new clause satisfies the UK’s international trade agreement obligations in respect of record keeping without increasing the burden on contracting authorities as such record keeping provisions do not apply to the management of the awarded contract. The record-keeping changes are also the final aspect of the rules that underpin the transparency principle as previously provided for in EU law. This principle meant that contracting authorities must:

• advertise opportunities;
• set out in clear, precise and unequivocal terms what they will do;
• do what they said they would without any substantial change;
• keep records; and
• allow for challenge.

The procurement bill already provided for 4 of these 5 aspects. It should also be noted that the new record keeping requirement is only a minimum and contracting authorities may of course keep records for longer or be required to do so under other legislation.

The Procurement Bill will now go back to the House of Lords for consideration. The Lords may disagree with these amendments or make alternative proposals and continue the legislative ‘ping-pong’ process until both houses reach agreement.

Elsewhere, Government Commercial Function provided an updated projected timeline for when the new regime will go live which is expected to be October 2024. This will follow a six-month preparation period.

As acknowledged by Government Commercial function, the legislative approval of the Procurement Bill has taken longer than expected. However, the end is in sight along with an updated expected go live date for the new regime which can be accounted for on the horizons of suppliers and contracting authorities.

Further updates

To support public bodies, suppliers and their advisers navigate the Procurement Act, we will shortly launch our procurement reform page. This will bring together expert commentary, insight and tools to help make sense of the changes and how they will impact your organisation.