Transparency under the Procurement Act 2023 – an improvement at what cost?

One of the key changes coming in the Procurement Act (which remains scheduled to come into force in October this year) is a focus on increased transparency throughout the life of a contract, not just in the procurement stages.

Whilst the old principle of “transparency” is not in the new legislation per se, there is an express objective in the Act of “sharing information for the purpose of allowing suppliers and others to understand the Authority’s procurement policies and decisions”. This sounds very much like transparency to us!

One of the most striking things about the Act is the increase in the number of notices and other documents that an authority will be required to publish. For a full run down, see our previous briefing.

The immediate impact on authorities is obvious; the increase in administration required to prepare, publish and monitor the information required in these notices and other documents is going to be huge. What, then, is the purpose behind this?

Our bidding entity clients are already telling us that, for the most part, they’ll welcome this increase in transparency. Bidders will be able to see, for example:

• Who is bidding for contracts (successful and unsuccessful, if the planned details for Contract Award Notices are set out in the draft Procurement (Transparency) Regulations, make it into the final version).
• What their competitors’ contracts look like, what services are being provided, what performance metrics are included and when the contract is due to terminate, as copies of all contracts valued above £5m will need to be published (commercially sensitive information redacted).
• How their competitors are performing through annual Contract Performance Notices published for each contract valued over £5 million (and where they are performing badly, tactically suggest a change of supplier or different solution to the contracting authority).
• Which contracts are being varied, how and by what value (under Contract Change Notices, which will be mandatory for every contract variation).
• Which contracts are being directly awarded, to whom and for what reason (through the use of Mandatory Transparency Notices for all direct awards);
• Which procurements have not progressed to contract award (through Procurement Termination Notices).
• Which contracts are coming to an end, either through the expiry of the term or another reason such as termination for supplier breach, including details of that breach, set out in a mandatory Contract Termination Notice for every contract.

Will the changes be welcomed?

We have already had a very clear indication from our public sector contracts that whilst the policy objective behind these requirements is laudable, and the transparency of how public money is spent is a good thing, in reality, the additional burden this is going to place on procurement teams where resource is already stretched is going to be difficult.

Round table discussions we have had with bidding entities across all sectors have revealed some real concerns over the information which will be available to competitors and counterparts generally, including revealing success rate in tender processes, bidding strategy, performance against KPIs and full details of non-performance against contract requirements without the requirement for any context or background information.

In response to this, we may see a more strategic approach to bids being submitted and perhaps an increased use of special purpose bidding entities as lead bidder, with a more established consortium or company sitting behind it, which could be used to hide the identity of a bidder where it is attempting to break into a new market, for example.

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].