The Cabinet Office has recently announced a delay to the commencement of the Procurement Act 2023 (PA 23) – the date is now set for 24 February 2025. By preparing for the new regime now, local authorities and other contracting authorities can mitigate the risk of non-compliance and be ready to take advantage of the increased flexibility it brings, writes Chanel Quigley, solicitor at law firm Anthony Collins.
Whilst the delay date isn’t a surprise, it will be frustrating for the many local authorities that have been preparing for the new regime. Local authorities should use this time to continue to familiarise themselves with the secondary legislation and guidance documents published to support implementation. If not done so already, they should also enrol in the ‘Transforming Public Procurement’ learning and development programme.
The PA 23 is intended to be both simpler and more flexible, but with this increased flexibility in the procurement process comes increased transparency and conversely more complexity, especially post-procurement. Specifically, the PA 23 introduces new competitive tendering procedures, objectives and obligations spanning the lifecycle of public contracts for goods, services and works. Some of the changes are onerous for local authorities, hence the need to be prepared.
Having already updated their contract procedure rules/procurement policies and completed the necessary know-how training, some contracting authorities may be concerned that the delayed implementation of the PA 23 could disrupt the change process underway.
To assist with keeping the ball rolling, here are some key considerations that local authorities should consider when assessing their readiness for the new regime.
Understanding the concept of ‘covered procurement’
Local authorities need to grasp the new term ‘covered procurement’ which is defined in section 1 of the PA 23 as “the award, entry into and management of a public contract”. Section 11 of the PA 23 obliges contracting authorities to carry out covered procurement in accordance with the PA 23. This defined term helps local authorities to understand exactly which provisions apply to above threshold, non-exempted procurement.
When carrying out a covered procurement, local authorities must have regard to the importance of the objectives set out in section 12 of the PA 23, namely:
- delivering value for money;
- maximising public benefit;
- sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions; and,
- acting, and being seen to act, with integrity.
Local authorities will be familiar with applying the principles under the Public Contracts Regulations 2015 during the procurement, but this is a significant change. From 24 February next year, it will be necessary for those involved in making decisions in relation to a contract procured under PA 23 to understand the objectives and consider how evidence can be gathered to demonstrate that they have been fully considered. This is particularly important given the increased transparency of decision making via notices under the PA 23.
To what extent does policy (including social value) guide procurement decisions?
Social value has been a key part of the UK procurement landscape for some time, and it will continue to be pushed to the top of the agenda in the new National Procurement Policy Statement to be published by the new government. Local authorities may therefore want to use the extra time that the delayed implementation date has given them to consider their approach to social value in procurement. This can be done by:
- ensuring there is a clear strategy and set of social value priorities reflecting corporate policy so decision makers can determine which are relevant to the subject matter of the contract;
- including relevant social value priorities in the core requirements, award criteria and contract conditions;
- promoting the use of pre-market engagement to assess the maturity of the market in terms of social value, and ensuring the published procurement documents capture this information accurately;
- considering how the authority can remove or reduce the barriers to participation for SMEs;
- devising alternative approaches to price in identifying the ‘most advantageous tender’ – i.e. taking a broader approach to assessing value for money, including for example lifecycle costs and through specific and deliverable social value benefits; and,
- factoring social value commitments into the assessment of contract performance.
Are you ready for the new notification requirements?
Local authorities and other contracting authorities already know that the PA 23 includes a comprehensive new notices regime. Whilst intended to improve transparency, authorities will be required to publish several notices on the central digital platform from the pre-procurement stage right through to contract expiry and/or termination.
To prepare for the new notification requirements, local authorities and other contracting authorities should consider whether responsibilities are being captured appropriately in policies and/or contract terms and conditions.
For example, under the PA 23, post contract award notices will need to be published in each of the following situations:
- where there has been a modification to the contract:
- where a contract has been terminated;
- where PA 23 requires KPIs to be set and assessment information to be published;
- where there have been breaches of contract or poor performance; and,
- to demonstrate compliance with the 30-day payment terms.
To ensure these notification requirements are met, contracting authorities should ensure efficient interaction is in place between the commissioner, the procurement team, the contract management team and the supplier.
The PA 23 will bring both risks and opportunities for contracting authorities. The delayed commencement date allows more time for bringing everyone in a council on board, including members who will be interested in how policy drives commissioning outcomes.
For more information on preparing for the PA 23 visit here.
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