Procurement Act 2023: Are you ready?

The new Procurement Act 2023 (which comes into force later this year) has been hailed as a chance to reform the procurement regime in the UK and provide a slicker, more efficient procurement process. The new Regulations are casting more light on what is required of authorities in terms of publication and transparency before, during and after the procurement process, together with new publication requirements that now apply during the life of a contract.

 A new Government portal will replace both Contracts Finder and Find a Tender Service, and we understand this is intended to go live later this year. The number of notices authorities will be required to publish is increasing and is set to become something of a burden if authorities are not adequately prepared. All notices also come with a change of terminology to get to grips with, and we await the format of those notices, though we now have details of the likely information requirements in the draft “Procurement (Transparency) Regulations 202X”.

15 new notices to publish

In total, we have counted no less than 15 notices that an authority will have to publish under the Act, so bear with us for our rundown of all 15 below!

Planning Stage 

• Pipeline Notice: Authorities with a procurement spend of more than £100 million annually will have to publish information on potential future procurements they expect to conduct that year, at least 56 days prior to the commencement of that financial year. Information is only required in respect of individual contracts where the estimated contract value exceeds £2 million.
• Planned Procurement Notice: Similar to the current Prior Information Notice (PIN), this notice is optional and may be published to inform the market that a contracting authority intends to publish a Tender Notice at a future date. In some circumstances using this notice will enable authorities to reduce minimum tender period timescales.
• Preliminary Market Engagement (PME) Notice: This notice should be published when an authority chooses to carry out market engagement before starting a procurement (or can be published after the event, stating it has undertaken such engagement). Use of the notice is not mandatory, but if on commencement of a procurement, market testing has taken place and a PME notice was not issued, the Tender Notice must include reasons for not publishing the PME notice.

Procurement Stage

• Tender Notice: This is simply a re-naming of the current "contract notice" which must be published to commence a competitive procurement. This is the “window on the procurement” and provides the market with basic information about the nature of the contract opportunity, its value and the contracting authority. It will also provide a link for interested parties to access the tender documents.
• Below-Threshold Tender Notice: This must be published before advertising a 'notifiable' below-threshold contract. A contract is ‘notifiable’ if it has a value above £30,000 (inc. VAT) for goods and services and £214,904 (inc. VAT) for works contracts (these figures are reduced to £12,000 and £139,688 for central government bodies, respectively). Note that this requirement will not apply to schools and academies, and the requirement and will not apply at all if the notifiable contract is not openly advertised.
• Transparency Notice: Before making a direct award without a Tender Notice, a Transparency Notice must be published. This notice must be published to inform the market of the authority’s intention to make a direct award, why there is a justification to award the contract directly, and the identity of the supplier to be awarded the contract. Whilst comparisons have been made between the new Transparency Notice and the current VEAT notice, there are some key differences, including:

• • the obligation to publish prior to award (though there is no minimum timescale to observe before award following publication);
  • the fact that the notice will be compulsory rather than the option to publish a VEAT, which currently exists; and
  • publication of a Transparency Notice will not provide the immunity from the remedy of set-aside (ineffectiveness) that a current VEAT can.

• Dynamic Market Notices: Where an authority wishes to establish a Dynamic Market (essentially a pre-qualified list of suppliers who can reply to tenders from time to time) it must issue a Dynamic Market notice setting out when the dynamic market will run from, what goods, services or works it relates to, how to apply and the conditions for participation.
• Procurement Termination Notice: This must be published when a contracting authority decides to abandon a procurement process after publishing a Tender Notice or a Transparency Notice. There is no requirement to provide reasons in the notice.

Contract Award Stage

• Contract Award Notice (CAN): This is a brand-new notice with a name we are already familiar with. don’t be fooled; it isn’t the same as the current CAN. The new CAN provides information to the market before a contract is awarded and only once the tenderers have been provided with an assessment summary – i.e., feedback on their tender and the successful tender following evaluation. Publication of the CAN starts the eight working-day standstill period.
• Contract Details Notice: Once a contract is signed, a Contract Details Notice must be published within 30 days of contract execution or 120 days if the contract is ‘Light Touch’. This applies to any contract awarded, whether awarded directly without a Tender Notice, via a framework or through a full tender process. The notice will contain details of the supplier, the contract value, duration, and extension options within the contract. In addition, where the contract has a value exceeding £5 million, a copy of the contract must also be published with the notice (commercially sensitive information can be withheld).
• Below-Threshold Contract Details Notice: This must be published following the award of ‘notifiable’ below-threshold contracts in the same way as the Contract Details Notice for above-threshold procurements. The notice must be published as soon as reasonably practicable after the contract has been entered into.

Contract Management Stage

• Contract Change Notice: Before changing an existing contract, an authority must now publish a Contract Change Notice. The only exception to this is where the change is a “below threshold modification” which is a change which either increases or decreases the value of the contract by 10% or less (in the case of goods or services), or 15% or less (in the case of works) or increases of decreases the term of the contract by 10% of the maximum duration of the originally awarded contract. The notice must describe the nature of the change, its impact on the contract, and reasons for it being permitted under Section 74 of the Act.
• Payments Compliance Notice: Every six months, an authority must publish a notice setting out details of the authority’s compliance with the requirement under the Act to pay suppliers within 30 days of receipt of invoice. This needs to include the average number of days it takes to make payments, the percentage of payments made within 30 days, within 31 to 60 days and 61 days or over.
• Contract Performance Notice: Where a contract value exceeds £5 million, an authority must include at least three KPIs within the contract and monitor the supplier’s performance against these. At least once annually, details of the supplier's performance under these KPIs must be published in accordance with ascribed ratings of Good, Approaching Target, Requires Improvement, Inadequate and Other, and where the supplier has breached the contract, details of that breach and details of whether the contract was partially terminated, a settlement reached, or damages awarded as a result. Note that where the breach has resulted in a full termination of the contract, this would require a Contract Termination Notice (see below) instead.
• Contract Termination Notice: Within 30 days of a contract expiring or terminating for any reason, an authority must publish a Contract Termination Notice. This must include details of the contract and the reasons for its termination (including details of any breach of contract), the date of the termination and its estimated value.

What does this mean for contracting authorities?

The above clearly represents an increase in notice requirements for any contracting authority, most notably the requirements applying during the term and at the end of a contract, which will be new to many authorities.

This increase in transparency is likely to be welcomed by suppliers wanting more information on when contract opportunities are likely to be coming to market. However, we already know that contracting authorities are understandably concerned by the administrative burden this will place on their procurement teams.

Given that public sector procurement resources are already stretched, processes and procedures will need to be put in place to mitigate the impact of these new requirements sooner rather than later.

Are you ready for the Procurement Act 2023? We are here to help. Our procurement team has a range of seminars and training workshops available on the practical implications of the new Act. To discuss how you can prepare, please contact Alison Walton on 0191 211 7850 or email [email protected]