Procurement in a Nutshell – Procurement Act 2023 Guidance: Modifying a Competitive Procurement
2nd August, 2024
This Nutshell will evaluate the recently published guidance on how contracting authorities ought to modify a competitive tendering procedure.
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
Modifications to a procurement prior to the submission of requests to participate or first/only tenders
Section 31(1) of the Act sets out when a contracting authority is permitted to make changes to the terms of a covered procurement:
- In an open procedure, changes are permitted before the deadline for submitting tenders;
- In a competitive flexible procedure, changes are permitted:
- Before the deadline for submitting a request to participate; or
- Where there has been no invitation to submit such requests, the deadline for submitting the first or only tender.
‘The terms of a covered procurement’ is defined as ‘anything set out in a Tender Notice or associated tender documents, including any requirements of a competitive tendering procedure, conditions of participation or award criteria’.
The guidance states that if a contracting authority seeks to modify the procurement in the circumstances outlined in Section 31(1), the Tender Notice and any associated tender documents affected by the modification must be updated and republished as confirmed at Section 31(5).
This guidance stresses that by requiring the republication of the Tender Notice, the Act attempts to strike a balance between permitting contracting authorities to make changes but also ensuring suppliers have sufficient time to consider the modification and prepare their requests/tenders.
Modifications to a procurement after the submission of requests to participate or first tenders in a Competitive Flexible Procedure
Under Section 31(2), contracting authorities are permitted to make modifications prior to the deadline for submitting final tenders for assessment but the Act limits any changes to those that are not ‘substantial’.
Modification is ‘substantial’ if (Section 31(3)):
- It would permit suppliers that are not ‘participating suppliers’ to submit a tender; or
- The contracting authority considers that, had the modification been reflected in the Tender Notice or associated tender documents before a deadline referred in section 31(1)(b) had passed:
- One or more participating suppliers would not be a participating supplier; or
- One or more suppliers that are not participating suppliers would be a participating supplier.
The deadlines referred to in Section 31(1)(b) are:
- Before the deadline for submitting a request to participate; or
- Where there has been no invitation to submit such requests, the deadline for submitting the first or only tender.
The guidance states that a ‘participating supplier’ is a supplier that has submitted a request to participate in, or has submitted a tender as part of, the competitive tendering procedure, and has not been excluded.
An example utilised in the guidance to demonstrate a substantial modification is where a contracting authority modifies the conditions of participation, following requests to participate, by changing the technical standard.
Where a non-substantial modification is made prior to the deadlines in Section 31(1)(b), the
contracting authority must notify each participating supplier. The guidance advises that this can be done by writing to each participating supplier or updating the Tender Notice to reflect the modification.
Refining the award criteria
If a contracting authorities seeks to refine the award criteria during the Competitive Flexible Procedure, they must provide for this possibility in the Tender Notice or associated tender documents (Section 24) and may only refine the award criteria before inviting final tenders (so as to comply with Section 24 and Section 31(2)).
Contracting authorities can only refine what has already been provided; they cannot add new criteria. In addition, contracting authorities cannot make a refinement that would, had the refinement been made earlier, have allowed one or more suppliers that did not progress beyond an earlier round or selection process to have done so (Section 24(3)). This reflects the messaging in Section 31(3) that modifications prior to the submission of final tenders must not then result in a participating supplier being unable to participate, or a supplier that is not participating supplier being able to do so.
Contracting authorities must republish the Tender Notice and any associated tender documents affected by the refinements.
What impact does a modification have on time periods?
Section 31(4) requires that whenever a modification to the terms of a covered procurement is made, the contracting authority must consider whether any tender deadlines and other time limits need to be revised in order to provide additional time for suppliers to take the change into account.
Any revision of the deadlines or time limits must be in accordance with Section 54. In particular, Section 54(1)(d) requires the contracting authority to have regard to the nature and complexity of any modification of the tender notice or any associated tender documents.
What does this mean?
The Act has afforded contracting authorities flexibility to refine their Tender Notice and associated tender documents during a competitive tendering procedure, however, we advise that the transparency requirements are noted. Contracting authorities should be aware of the requirements to notify suppliers of any changes and should assess whether any time scales should be adjusted. In doing so, contracting authorities must have regard to the nature and complexity of the contract as well as the objectives set out in Section 12, in particular, sharing information and having regard to SMEs.
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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