Public procurement post-Brexit

Value for Money (VfM) is a priority

Value for Money (VfM) is to remain the overriding priority for public procurement in the UK post-Brexit. Progress has been made by the Conservative government in achieving VfM over the last ten years, especially through the rollout of national framework agreements that exploit purchasing economies of scale and reduce administrative costs.

The Procurement Bill aims to build on this progress, emphasizing the importance of financial savings through professional purchasing practices, process efficiencies, and innovative means of fostering competition, for example, expanding the use of dynamic purchasing systems.

Social value contract awards

Alongside VfM, the Bill refers to maximizing public benefit through procurement. This includes new ways to assess social value in contract awards, tying the award of major contracts to suppliers having carbon reduction plans and paying sub-contractors promptly, and reserving below-threshold contracts for SMEs and social enterprises. The latter aspect is interesting as it breaks with the EC principle of non-discrimination in supplier selection and moves the UK closer to the US model of reserving certain types of public contracts for SMEs and other designated firms.

Tensions and trade-offs existed between VfM and maximizing public benefit in the previous regime, however, it is unlikely that these will disappear with the Procurement Bill.

New digital platform

To make procurement more accessible and business-friendly, the Bill proposes the creation of a single digital platform for searching and applying for contract opportunities online. A ‘tell us once’ rule will apply whereby suppliers can use their registered details every time they tender and not have to re-submit the same information to different public sector customers. A ‘noticing regime’ that informs suppliers about public authorities’ future procurement intentions will also be introduced.

While welcome, these steps are not exactly new. The UK already has digital platforms for public contracts, for example, Contracts Finder and Sell2Wales. Under the previous EC regime suppliers were able to use the European Single Procurement Document (ESPD), which is akin to the ‘tell us once’ rule. Suppliers were also able to find out about the future procurement intentions of public authorities through Prior Information Notices (PINs), which are published on national and EC digital platforms.

Supplier probity

The Procurement Bill takes an assertive stance on supplier probity. It allows for the exclusion of suppliers whose performance is sub-par or who are guilty of misconduct. Offending suppliers can be placed on an exclusion list for up to five years. Government Ministers were able to exclude poor performers and ethically compromised firms in the past, but the Bill formalizes this power.

It also allows for firms to be debarred from UK public contracting on national security grounds or if complicit in human rights abuses. In response to the debacle over the award of personal protective equipment (PPE) contracts during the COVID-19 pandemic, the Bill establishes a new competition process for emergency procurements.

Public Procurement Common Framework

While the Bill applies to contracting authorities in England, Wales, and Northern Ireland, the Scottish Government has decided to maintain its own legal framework on procurement based on EC-derived law. To accommodate policy divergence across the four nations, the Public Procurement Common Framework is in place to enable the UK internal market to function, ensuring the UK can enter into new trade agreements and comply with its existing international obligations on free trade.

The Procurement Bill does not change the UK’s commitments under the World Trade Organization’s (WTO) Government Procurement Agreement (GPA). Suppliers from other GPA signatories’, including the EU, the US, Canada, Australia, and New Zealand, must be treated the same as domestic suppliers for above-threshold contracts (defense and clinical healthcare procurement are excepted).

The UK is also bound by its Trade & Cooperation Agreement (TCA) with the EU, which stipulates equal treatment for EU suppliers based in the UK for above-threshold and below-threshold government contracts. These are reciprocal agreements and UK suppliers will enjoy corresponding access to public procurement markets across the EU and in GPA signatory countries.