Procurement in a Nutshell: Guidance – Competitive Tendering Procedures
18th July, 2024
This Nutshell will build upon our previous publication concerning Competitive Tendering Procedures in light of the recently published guidance, so as to highlight key substantive and procedural considerations contracting authorities ought to be aware of.
On 26th October 2023 the Procurement Bill received Royal Assent and is now expected to come into force on 28th October 2024.
The Act will, in particular, revoke the following:
· Public Contracts Regulations 2015 (PCR)
· Concession Contracts Regulations 2016
· Utilities Contracts Regulations 2016
You can find a copy of our previous publication concerning Competitive Tendering Procedures here and the recently published guidance here.
What are the new competitive tendering procedures and what does this mean?
The Act, under Section 20, has introduced two competitive tendering procedures: the Open Procedure and the Competitive Flexible Procedure.
The Open Procedure is defined at Section 20(2)(a) as a single stage tendering procedure without a restriction on who can submit tenders. In contrast, the Competitive Flexible Procedure may limit the number of participating suppliers and provide for the refinement of the award criteria (Section 20(4)).
The Competitive Dialogue Procedure and the Competitive Procedure with Negotiation, under the PCR, are no longer distinct tendering procedures. However, the guidance confirms that the ability to both engage in dialogue, and negotiate, with prospective suppliers remains available.
Contracting authorities should note that ‘dialogue’ has been referred to as a discussion between the contracting authority and suppliers about any aspect of the procurement. ‘Negotiation’ is the discussion between the contracting authority and a supplier with a view to improving the content of tenders.
Contracting authorities are free to design their Competitive Flexible Procedure as they see fit so long as it is proportionate, having regard to the nature, complexity and cost of the contract. As such, the guidance stresses that the procurement procedure should not be overly burdensome or impose unrealistic timescales.
Carrying out a Competitive Tendering Procedure
To commence a competitive tendering procedure, a Tender Notice must be published on the central digital platform Find a Tender. The Tender Notice may provide access to any associated tender documents such as the award criteria and the terms and conditions of the contract. Contracting authority should note, however, that there is no obligation to provide associated tender documents if all the information necessary to allow suppliers to prepare a tender is contained in the Tender Notice.
The Tender Notice (and if necessary any associated tender documents) will also set out any Conditions of Participation that must be met in order for a supplier to be awarded the public contract. The guidance states that the aim of such conditions is to assess whether prospective suppliers have:
- the legal and financial capacity to perform the contract, or
- the technical ability to perform the contract.
For the Competitive Flexible Procedure, the contracting authority must also set out in the Tender Notice how such a procedure is to be carried out, for example through tendering rounds.
Both the Act itself and the guidance make clear that a contracting authority can only award a public contract in a competitive tendering procedure to the supplier that submits the most advantageous tender (MAT). We will analyse how to assess which is the MAT in a separate Nutshell.
Once the MAT has been identified, the contracting authority must release two sets of
Information namely:
- it must provide assessment summaries to the assessed suppliers; and following this
- it must publish a Contract Award Notice on Find a Tender.
An assessment summary provides information to enable a supplier to understand why its assessed tender was either successful or unsuccessful. Furthermore, it is the publication of the Contract Award Notice that initiates the standstill period. The mandatory standstill period is a minimum of eight working days. Once the standstill period has ended, the contracting authority may enter into the contract.
Once the contracting authority has entered into the contract, it must publish a Contract Details Notice.
Designing a Competitive Flexible Procedure
The process outlined above should be followed when utilising either the Open Procedure or the Competitive Flexible Procedure. The distinct difference is that with the Competitive Flexible Procedure, a contracting authority may limit the number of participating suppliers. The guidance makes clear that the contracting authority has the freedom to design its own procedure, and can incorporate various stages of dialogue or negotiation as well as require a site visit or the delivery of presentations.
To do this, when initiating the Competitive Flexible Procedure, a contracting authority can use the Tender Notice in two different ways:
- to invite suppliers to submit a request to participate in the procedure; or
- to invite suppliers to submit their first, or only, tender.
However, as previously mentioned, the contracting authority must set out in the Tender Notice how the Competitive Flexible Procedure is to be carried out.
The guidance also stresses that the number of suppliers that a contracting authority allows to participate or progress in a Competitive Flexible Procedure should be sufficient to ensure genuine competition.
In addition, if a procedure includes numerous tendering rounds, contracting authorities are advised to use the same feedback structure which will be provided for assessed tenders so that suppliers receive a robust explanation for their scores.
Exclusions in a Competitive Tendering Procedure
In all competitive tendering procedures, a contracting authority must consider whether a supplier is an excluded or excludable supplier before assessing which tender best satisfies the award criteria.
If a supplier becomes an excluded supplier during the course of a Competitive Flexible Procedure, a contracting authority must exclude it from progressing further. If a supplier becomes an excludable supplier during the course of a procedure, a contracting authority may exclude it from progressing further.
Concluding remarks
The Act seeks to provide contracting authorities with more flexibility with regards to tendering procedures, and so a rigid application of either competitive tendering with dialogue or negotiation, as required under the PCR, is no longer necessary. However, contracting authorities should note the additional administrative requirements when conducting a competitive tendering procedure, such as the publication of various notices throughout the process.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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