Radical changes to public tendering ahead?

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Public sector tendering gets a bad rap – it is often seen as cumbersome and inefficient with high bidding costs and unsatisfactory systems to challenge results.  Following Brexit, the Government has seized the opportunity to reform the way in which the public sector does business.

Free from the shackles of prescriptive EU Directives on tender processes, the Government has an obligation only to comply with principles of tendering laid out in the World Trade Organisation GPA and the UK and EU Trade and Co-operation Agreement concluded just before Christmas, both of which lay down much less prescriptive requirements.

Following the expiry of the Brexit transition period in December, gone is the obligation to use the Official Journal of the European Union (OJEU) to advertise public opportunities, with a national portal replacing that requirement called “Find a Tender Service

A fairer process for public procurement

Shortly before Christmas the Government published a green paper, a consultation on how it proposes to reform the public tendering system in the UK to make life easier for bidders and public bodies alike.  It invites comments on its proposals from anyone with an interest in public procurement by 10 March 2021.

The proposals are crafted around key themes of transparency, value for money and fair treatment of suppliers and are intended to streamline and simplify the complex framework of Regulations that currently govern public spending.

Interestingly, the proposals do not cover health sector procurement, which has been left to the Department for Health and Social Care to review separately.

Complete transparency, a step too far?

Some of the proposals might be seen as fairly radical. For example, there is a proposal to scrap  standstill debrief letters, which provide tailored feedback on the tenders.

This would be replaced by a fully transparent process where authorities must publish the names of all bidders, the basis of the award decision, all tenders received (with commercially sensitive information redacted), and all evaluation reports, notes and scoring.

Whilst we can see how this will significantly assist those bidders wishing to delve into the probity of the process, and will undoubtedly change the face of procurement litigation, this could be a significant concern for bidders who may be reluctant for their competitors to freely have access as of course to which contract they have bid for, their scoring and the content of those bids.

Limit on damages

The focus of the remedies for challenges to tender processes is set to change.  The government proposes creating more scope for pre-contractual remedies, allowing bidders more chance of requiring a re-run of parts of the tender process to give them an opportunity to win the contract, rather than simply to claim damages for lost profits after contract award.

If a bidder does make a claim for financial compensation, it’s proposed that this is limited to the recovery of its own legal costs and 1.5 times its bid costs only with no reference to loss of profits except in special circumstances.

Other proposals include:

  • simplifying the system into one set of regulations
  • introducing only two types of tender process – negotiated and non-negotiated (together with a process allowing direct award without tenders in urgent or crisis situations)
  • publishing a notice each time a public contract is amended
  • introducing more scope for social and environmental evaluation criteria to be used
  • making it easier for authorities to be able to take account of poor performance in previous contracts
  • streamline the court process and introduce a tribunal appeal for certain types of procurement challenge

Overall the proposals seem to meet their stated aim of providing a balanced and fair system which is more efficient for all involved.  The proposals are at first consultation stage and it is inevitable that they will go through some considerable scrutiny and changes before becoming law.

If you wish to give your views, the consultation remains open for email responses until March and can be accessed at gov.uk.

To find out more, contact Alison Walton, partner and head of procurement at Muckle LLP, on 0191 211 7850 or [email protected]