03 May 2024

Planning stage

The PA23 intends to consolidate and streamline the current procurement regulatory framework, which is currently based on legacy EU law, and in doing so simplify the procurement process to better meet the UK’s needs.

This article, which is part of a series of deep dives into the new procurement lifecycle, will focus on the procurement objectives underpinning the PA23, and the various new mechanisms that have been introduced to ensure effective procurement oversight and preliminary market engagement.

Procurement objectives

Under existing procurement legislation, contracting authorities are required to treat economic operators equally, without discrimination and to act in a transparent and proportionate manner.

The current procurement law principles have been reformulated into a set of objectives which now apply to the full lifecycle of a procurement (i.e. award, entry into, and management of a regulated contract). Specifically, contracting authorities must have regard to the importance of:

  • delivering value for money
  • maximising public benefit
  • sharing information
  • acting, and being seen to act, with integrity.

Contracting authorities must also have regard to the barriers to SME participation and consider whether such barriers can be removed or reduced.

The requirement to “have regard to” the above objectives is an interesting recasting of the existing law: it suggests that contracting authorities should consider and actively engage with these objectives as opposed to requiring strict compliance with them. 

By contrast, equal treatment has been retained as an express requirement, although with some tweaks: contracting authorities must treat suppliers the same “unless a difference between the suppliers justifies different treatment”. Where a contracting authority considers that different treatment is justified, it must take all reasonable steps not to put any supplier at an unfair advantage or disadvantage.

Although the PA23 does not include an overarching objective in relation to transparency or proportionality, obligations to take account of both are embedded throughout the PA23 (e.g. through express requirements to publish notices or to exercise discretion “in a manner proportionate to the nature, cost, and complexity” of the contract). Transparency and proportionality will therefore continue to be important considerations for contracting authorities when designing and managing procurements and regulated contracts.

In addition, contracting authorities must now also have regard to the National Procurement Policy Statement (NPPS) published by the Government (or in Wales by the Welsh Ministers). The NPPS will enable Government to specify wider policy objectives (e.g. increase skills or jobs or achievement of net zero targets) that public procurements are expected to contribute to. Cabinet Office’s guidance [Guidance_-_NPPS.pdf (publishing.service.gov.uk)] confirms that whilst there is a duty to consider the objectives in the NPPS, there is no absolute obligation to do so. Where a contracting authority decides to accommodate or disregard NPPS objectives, the reasons should be documented.

Duty to “Treaty State” suppliers

The Act includes specific provisions requiring contracting authorities not to discriminate against “treaty state” suppliers, meaning suppliers from countries or entities with which the UK has established mutual, non-discriminatory access to public procurement markets. This approach mirrors the position under the existing procurement regime. Importantly, this means that although the UK’s departure from the EU provides the UK with the freedom to set its own public procurement rules, there is nothing in the PA23 that allows contracting authorities to favour domestic entities and “buy British”.

Procurement oversight

The PA23 establishes a procurement oversight regime that provides an “appropriate authority” with the power to investigate contracting authorities’ compliance with the PA23, although procurements by government departments will be exempt from this regime.

It is expected that the Procurement Review Unit (“PRU”), a new unit sitting in the Cabinet Office, will act as this “appropriate authority”. It will primarily act on the basis of referrals from other government departments or data available from a new central digital platform (intended to replace FTS and Contracts Finder). Crucially though, investigations will not relate to any ongoing procurement exercise or award decision, and challenges to the compliance of individual procurements will therefore continue to be dealt with through the High Court. The appropriate authority may require a contracting authority to provide relevant documents and other reasonable assistance in connection with an investigation.

Following an investigation, the unit will have a power to make statutory recommendations to the relevant contracting authority for the purposes of improving compliance with the new regime (examples given in the Green Paper include recommendations to revise local operating procedures which have been found to be discriminatory or to require procurement staff to undertake additional training).

If subject to such a recommendation, a contracting authority must “have regard to” it when considering how to comply with the requirements of the PA23 and may be required to report back on progress. Where such progress reports are required, and the recommended action has not been taken, the contracting authority must provide a rationale for this in the report.

The appropriate authority may publish the results of a procurement investigation, including any statutory recommendations issued. It may also publish the progress report or a notice stating that the contracting authority has failed to provide a progress report. The appropriate authority may also decide to publish guidance for contracting authorities, offering ’lessons learned” from investigations to assist contracting authorities with complying with the legislation generally. 

Preliminary Market Engagement

The PA23 introduces a number of mechanisms aimed at increasing market engagement. The first such mechanism involves the publication of market opportunities through new notifications in the form of:

  • Pipeline Notices: a contracting authority must publish a pipeline notice if, within the coming financial year, it considers that it will pay more than £100 million under relevant public contracts. The pipeline notice must contain information on future tenders for contracts with an estimated value of greater than £2 million. Our recommendation is that those contractors that are providing, or wish to provide services to contracting authorities, establish new internal practices to review pipeline notices that are published for the services that they wish to provide and plan their bidding strategy accordingly.
  • Planned Procurement Notices: a contracting authority may (but is not required to) publish a planned procurement notice setting out its intention to publish a tender notice at a future date. This is similar to the existing prior information notice. In some cases, the publication of such a notice will allow a contracting authority to take advantage of a reduced minimum tendering period. Similarly to Pipeline Notices, contractors should ensure that Planned Procurement Notices are monitored and acted upon as soon as possible, so that there is time to meaningfully engage with authorities before a procurement process begins. 

In addition, there are enhanced provisions regarding the carrying out of preliminary market engagement for future contract opportunities. Unlike under the current rules, the PA23 makes clear that such engagement can be carried out for the following purposes:

  • develop its requirements and approach to the procurement
  • design a procurement procedure, conditions of participation and/or award criteria
  • prepare the tender notice and associated tender documents
  • identify suppliers that may be able to supply the goods, services or works required
  • identify likely contractual terms
  • build capacity among suppliers in relation to the contract to be awarded.

If a contracting authority carries out preliminary market engagement, it must take steps to ensure that suppliers participating in that process are not put at an unfair advantage and competition in relation to the award of the public contract is not otherwise distorted. If a contracting authority considers that a supplier’s participation in preliminary market engagement has put the supplier at an unfair advantage in relation to the award of the contract and the advantage cannot be avoid, it must exclude the supplier from participating in, or progressing as part of, the competitive tendering procedure. However, in our view this should not be read in such as way as to disincentivise authorities from proactively engaging with contractors (and vice versa). Engagement between authorities and contractors outside a formal procurement process is often an important activity to improve understanding between the public and private sector and improve the quality of a procurement process and the resultant contract. Instead, authorities and contractors should be aware that the engagement between them should be carefully managed and recorded, to enhance the robustness of any subsequent procurement process. 

Where a contracting authority carries out preliminary market engagement, it must publish a preliminary market engagement notice before publishing a tender notice unless it provides reasons for not doing so in its tender notice.

How can we help?

We will be releasing further updates on other aspects of the PA23 shortly and holding workshops on the new regime throughout 2024. Please contact Laura Wisdom or another member of our procurement team if you would like to receive updates, including if you are interested in tailored workshops on issues specific to your organisation. 

Read previous articles in the series here >>>

Key contact

Headshot of Laura Wisdom

Laura Wisdom Partner

  • Public Sector
  • Defence
  • Procurement

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