The government’s Procurement Bill has signalled a move from ‘Most Economically Advantageous Tenders’ to ‘Most Advantageous Tenders’. Rebecca Rees and Louis Sebastian discuss the significance for contracting authorities.
The Procurement Bill was published in May of this year with the intention of reforming the “complicated and restrictive” law derived from the EU and bring in a “simpler and more flexible” regime. One purportedly fundamental change contained in the bill is the move from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT). Is this change really transformational and does this shift, as enshrined in the bill, help the government meet its stated intentions?
Where has the change come from?
Now that compliance with EU directives on procurement is not required, the driver for this change is ostensibly the alignment of the new domestic regime with the requirements under the World Trade Organisation’s Agreement on Government Procurement (GPA). The GPA sets out in Article XV (Treatment of tenders and awarding of contracts) that, unless a procuring entity determines that it is not in the public interest to award a contract, a public contract shall be awarded to the supplier that has submitted the “most advantageous tender” (or, where price is the sole award criterion, the supplier that has submitted the lowest price).
In addition to aligning with requirements under the GPA, the intention under the December 2020 government green paper (Transforming public procurement) was to give greater reassurance to contracting authorities that they can take into account a broad spectrum of issues in identifying what counts as good value for money. Of particular note, the government considers a move to MAT will support the levelling up agenda (by encouraging contracting authorities to give more consideration to social value when procuring public contracts).
The impact of a move from MEAT to MAT should not cause too many difficulties for contracting authorities. The shift is one of terminology rather than substance.
What impact does this change have?
The impact of a move from MEAT to MAT should not cause too many difficulties for contracting authorities. The shift is one of terminology rather than substance and this largely represents a “reshuffling of the deckchairs” rather than any sweeping reform. Indeed, it is unlikely to change how we currently identify the tenderer to be awarded a public contract. The green paper itself recognised that the approach under MAT (i.e. taking a broader view of what can be included when evaluating tenders) is already provided for under the existing procurement regulations.
Specifically, Regulation 67 of the current Public Contracts Regulations 2015 (PCR 2015) sets out that the most economically advantageous tender shall be identified on the basis of price or cost and “may include the best price-quality ratio, which shall be assessed on the basis of criteria, such as qualitative, environmental and/or social aspects linked to the subject-matter of the public contract in question”. Such criteria may include “quality, including technical merit, aesthetic and functional characteristics, accessibility, design for all users, social, environmental and innovative characteristics and trading and its conditions…”
By way of comparison, the Procurement Bill states, in Sections 18(2) and 22(3), that MAT is to be assessed by reference to the award criteria specified for the procurement. Any award criteria must:
- relate to the subject matter of the contract;
- be clear, measurable and specific;
- not be overly prescriptive, for example in terms of trademark, place of origin or compliance with UK standards; and
- be proportionate to the nature, complexity and value of the contract.
The bill is therefore far less descriptive than PCR 2015 as to the sorts of things that can be taken into account when considering MAT. The current legislative framework already affords significant flexibility to contracting authorities to take a broad view of the evaluation criteria to be used in public procurement exercises. By being less descriptive the Bill allows wider interpretation, but the much-vaunted move from MEAT to MAT does not achieve much more than a refocusing of minds and is not the introduction of any substantial change as to how tenders are to be evaluated.
More to come?
The government’s response (published in December 2021) to the consultation on the green paper suggested that the link between the subject matter of the contract and the award criteria would be loosened. However, the wording of Section 18 of the bill retains this connection and so we understand that this disconnection will not be taken forward.
In addition, Section 104 of the Bill allows the government (by statutory instrument) to disapply Section 17 of the Local Government and Housing Act 1988 (which prevents councils from taking into account non-commercial considerations when awarding contracts). Therefore, it will be through this secondary legislation (if and when it arrives), along with a revised National Procurement Policy Statement published under Section 12 of the bill, that such restrictions will be relaxed.
At the time of writing, the first round of amendments to the bill have been published in the House of Lords. There are a number of proposed opposition amendments to Section 22 that specifically broaden the matters that can be taken into account when setting award criteria. These extend to agricultural, environmental and social factors as well as net-zero policies and the government’s food strategy. Legislators in the House of Lords appear to agree with our assessment that the bill could do more to promote these aspects through express wording in the primary legislation.
The much-vaunted move from MEAT to MAT does not achieve much more than a refocusing of minds and is not the introduction of any substantial change as to how tenders are to be evaluated.
A continuing theme
It seems that the move from MEAT to MAT in the bill is a continuation of the messages that have come from various Procurement Policy Notes over the last few years. For example, PPN 06/20 (Taking account of social value in the award of central government contracts), which introduced the new social value model for central government, ensuring that social value benefits are explicitly evaluated in all central government procurements (where relevant), and goes beyond the requirement to “consider” social value as set out in the Public Services (Social Value) Act 2012.
Additionally, the importance of wider considerations when evaluating tenders has been emphasised in the National procurement policy statement (NPPS) under PPN 05/21. The Procurement Bill is therefore another step along this road, rather than a major change in the direction of travel for public procurement.
Rebecca Rees is a partner and head of public procurement and Louis Sebastian is a senior associate at Trowers & Hamlins.
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