Webinar Q&A – Planning and Commencing a Procurement

Can you expand on the ability to change to process in the flexible competitive procedure? Step 16.

Clause 31 of the Procurement Bill allows contracting authorities to modify the terms of the procurement.

The contracting authority may make unrestricted changes to the procurement before the deadline for:

• Submitting requests to participate; or
• Where there is no request to participate stage before the first or only tender is received.

After that time, a contracting authority can only make changes that are not substantial.

A substantial modification is one that:

• Would have permitted suppliers that are not participating suppliers to have submitted a tender;
• The contracting authority considers that if the change had been made before receiving the requests to participate it would have selected different suppliers to participate.

If the terms or the procurement are revised, the contracting authority must:

• consider revising the time limits;
• Re-publish the tender notice and associated tender documents.

 

Please can you expand on what a ‘User choice’ contract is, compared with a normal contract?

A user choice contract is listed as one of the categories of direct awards in Schedule 5. It will cover contracts under the definition of “user choice services”. The full definition is services:

“a. that are of a kind specified in regulations under section 8 (light touch contracts);

1. that are provided for the benefit of a particular individual; and
2. in respect of which a contracting authority would, in awarding a contract for their supply, be required under an enactment to have regard to the views of the individual, or a person providing care to the individual (their “carer”), in relation to who should supply the services.”

The following conditions must also be met for the direct award provisions to apply to such contracts:

“a. the individual to whom the services are to be supplied or their carer has expressed a preference as to who should supply the services, or the nature of the services to be supplied is such that only one supplier is capable of providing them; and

18. the contracting authority considers that it is not in the best interests of the individual to award the contract under section 18.” [section 18 sets out details for awarding a contract under a competitive procedure]

Subsequent regulations will confirm the type of services to be covered by the light touch regime.

 

Dynamic Markets – If a supplier fails their application to be on a dynamic market (i.e Financial viability for example) what time period is there for them to reapply?

The current draft Bill does not appear to specifically address this  issue.  This is similar to the current position on a DPS.  In practice this may be less of an issue as bidders are likely to want to remedy any failings before reapplying as it will take time and effort to apply each time.  Further, if the application process is relatively simple (often a DPS, under the current regulations, will be relatively automated so there will be limited effort for an authority to review repeated bids) then assessing repeat bids should be relatively simple.  The new rules do appear to provide a wide ability for authorities to set conditions for membership of a dynamic market.  Noting that there is a requirement to act proportionately it could, for example, be a possibility to have a step for repeat applicants to demonstrate any previous failings have been remedied.  We anticipate that further guidance will be issued in due course and this may address this issue.

 

Given the current political uncertainty, do we believe the implementation of the new Regs will be deferred until 2024?

That appears possible given the current levels of uncertainty/instability in central Government and economic policy. Must depends on the specifics of the Government’s current economic plans and how much Parliamentary time any measures will occupy before the end of the current session. The Government initially indicated its plans require “an ambitious legislative programme”, and whilst a number of the proposed reforms have been reversed, there will still be a significant programme of economic measures to seek to stabilise the UK economy.  As such, it may be that matters such as the Procurement Bill will need to make way for these measures. The Transport Secretary has, for example, stated that the forthcoming Transport Bill will be de-scoped for this reason. More clarity will emerge following the Chancellor’s further announcements on the Government’s plan, which should hopefully become more apparent over the coming weeks.

 

Please clarify the thresholds?

The Procurement Bill will apply to public contracts, that is, contracts for the supply, for pecuniary interest of goods, works or services to a contracting authority which:

• Has an estimated value above the threshold specified for that type of contract in Schedule 1. These reflect the current thresholds in the Public Contracts Regulations 2015. Ministers will have the ability to amend the thresholds from time to time: see clause 110(4)(p). These will reflect the threshold established under the Government Procurement Agreement of the World Trade Organisation; and
• Is not an exempted contract as set out in Schedule 2.

 

Are steps 1-5 also for open process?

Yes. Most of the 17 steps apply to the open procedure.  The only step that does not apply concerns the refinement of the award criteria (step 12). The other steps may apply in a slightly different way to the open procedure compared to the competitive flexible procedure.

 

Some more info on the repeat goods, services and works as a justification for a direct award would be useful.

This provision does already exist in Regulation 32 but we don’t think it is widely relied on.

Schedule 5 of the  Procurement Bill contains a category for Direct Awards under the heading “Additional or repeat goods, services or works”. This category covers contracts for goods, services or works by the existing incumbent supplier which are intended as an extension to, or partial replacement of existing goods, services or works in circumstances where:

“a. a change in supplier would result in the contracting authority receiving goods, services or works that are different from, or incompatible with the existing goods, services or works; and

1. the difference or incompatibility would result in disproportionate technical difficulties in operation or maintenance.”

The existing contract has to have had a transparency notice published in the last 5 years so this puts a time limit on the reliance of this provision but the reason it has not been relied on more often before when looking to extend with the incumbent when the above circumstances could be argued to apply is that it can only be relied on if the intention to rely on this provision was made clear in the original tender.  The Procurement Bill maintains this requirement in that the original tender notice or any tender document in respect of that earlier contract must set out:

“the contracting authority’s intention to carry out a subsequent procurement of similar goods, services or works in reliance on this direct award justification.”

Any party challenging the original procurement result of a tender containing such a provision may well have a strong argument that they should be able to maintain the automatic suspension and pursue the contract itself rather than damages as there is a realistic prospect of being frozen out of this opportunity for the foreseeable future due to the proposed intention to extend with the original contractor for technical reasons.

 

So to clarify, if your use a dynamic market then as a buyer you must then follow the 17 steps as set out for the competitive flexible procedure?

The current draft of the Bill is not clear on this issue.  However, as your question implies, it would seem strange if all of the 17 steps would need to be repeated.  We would imagine that if any of the steps used to create the dynamic market were the same as those needed for a competitive flexible procedure then ideally these should not need to be repeated.  Hopefully additional guidance will be issued on this point as otherwise some of the gains from dynamic markets are at risk of not being achieved.

 

Is the plan to still roll out training once the Bill is passed for Public Sector Buyers by the Cabinet Office?

The Government Commercial Function (GCF) has indicated an intention to roll out a programme of learning and development aimed at public sector stakeholders, during the six month transitional period once the Procurement Bill has received Royal Assent.  This programme of training is stated to include:

• Knowledge drops – short broadcast/webinars to provide a high level overview of the key changes to the procurement regime;
• Self-guided e-learning – a course of 10 online modules directed at commercial staff I contracting authorities to provide a grounding in all aspects of the new procurement regime;
• Deep dive webinars – a more intensive 3 day course aimed at more specialist procurement practitioners in contracting authorities to enable them to act as knowledge hubs/resource within their organisations
• Communities of practice – discussion forums for practitioners to come together to discuss and reflect on best practice and challenges within the new procurement regime.

For further details on this, please see here.

As the Procurement Bill develops and secondary legislation is published, DLA Piper will also be providing an ongoing programme of training via webinars and our rolling programme of blogs on specific topics, which you can find here.

 

Will standard templates be provided?

Clause 86 of the Procurement Bill enables an appropriate authority to make regulations regarding the form and content of notices and other documents to be published under the new procurement regime and as with the current regulations, we would expect this to result in a suite of standard form notices becoming available e.g. via FindaTender and Cabinet Office has indicated that these notice templates are currently under development.

Government Commercial Function has also indicated an intention to produce a range of template documents and case studies as part of it learning and development programme and we await further detail as to what these templates will cover.  We would, however urge a slight word of caution in that each public procurement will have its own bespoke requirements and any template should always be considered in the light of  these, being used as a guide and starting framework for the development of more bespoke documents rather than being followed to the letter in all aspects.  This is particularly important given the increased flexibility being afforded to contracting authorities as to how they run their procurements via the new competitive flexible procedure.

 

What do DLA Piper consider will be the realistic timeline for a procurement, end to end, under the competitive flexible procedure?  And what is the minimum realistic elapsed time?

As things currently stand, we do not think that there will be any significant changes to the timelines for procurements. Most of the timeline will continue to be taken up with preparations by the contracting authority, evaluation and moderation, and approvals. At least initially, we think that the process may take longer as contracting authorities adjust to the new freedoms, for example by designing bespoke procurement procedures. Contracting authorities may also require additional time to manage the potential exclusion of suppliers.

 

Would utilities cover ICT contracts e.g. telecomms/ networks?

The list of “utility activities” is set out in Schedule 4 of the Procurement Bill.  These broadly reflect the current utilities procurement regime under the Utilities Contracts Regulations 2016 (e.g. supply of gas, electricity, water, transport networks, ports and airports) and does not include ICT and telecoms contract which would fall under the general procurement regime under the Bill.