Procurement in a Nutshell: Transforming Public Procurement – Principles and Objectives

In December 2021 the Government published its response to the consultation and the comments raised by over 600 organisations and individuals. As a result we now have a clearer indication of the reforms that the Government intends to introduce.

The Government  plans to produce a draft Bill at some point in 2022. Further to the new legislation the Government will also introduce new secondary legislation or regulations to implement the new regime and produce  “a detailed and comprehensive package of published resources (statutory and non-statutory guidance on the key elements of the regulatory framework, templates, model procedures and case studies)” to help contracting authorities and suppliers understand how the new regime will work.

Due to significant changes and the amount of work required to bring this all into effect it is unlikely that the new regime will  be implemented until 2023 at the earliest. We can expect a draft Bill this year and the Government has said that it intends to give at least 6 months’ notice of “go-live”.

What this Nutshell covers

This Nutshell looks at the proposals to introduce updated principles into the legislation.

What the Green Paper said

The Green Paper suggested that there should be six principles, consistent with the Treasury’s Managing Public Money and the Nolan Principles. Those six principles were described as:

• Public good;
• Value for money;
• Transparency;
• Integrity;
• Fair treatment of suppliers; and
• Non-discrimination

Results of the Consultation

Some concerns were raised about the removal of the principle of proportionality and also there was a request for more clarity around the principles and their practical application. There were also concerns about how local priorities might be applied.

The Government has decided to retain the idea of introducing its proposed principles, but with some amendments. Primarily, they will be further categorised as either ‘principles’ or ‘objectives’ to make obligations clearer.

The principles will be:

• Transparency – this will set a minimum standard in terms of the quality and accessibility of information, but there will in addition be specific procedural obligations at each stage of the procurement process (there will be a later Nutshell on this topic);
• Non-discrimination – this falls in line with the UK’s obligations in its international trade agreements;
• Fair treatment of suppliers – this will cover both equal treatment of suppliers and procedural fairness to support a level playing field;

The objectives will include:

• Promoting the importance of open and fair competition – to encourage competitive procurement;
• Public good – described as maximising the public benefit to support wider consideration of social value benefits and will also address any concerns about a potential conflict between national and local priorities;
• Value for money – a procurement should enable the optimal whole-life blend of economy, efficiency and effectiveness;
• Integrity – including the prevention of misconduct, fraud and corruption.

Proportionality will not be included as either a principle or an objective, but the Government has said that the concept will be introduced where it is required in the specific regulations, eg in relation to time limits in procurement.

What this means

The precise application of these newly framed principles and objectives will not be clear until we see the draft Bill later this year, but we assume that the principles will be able to form the basis of any procurement challenge (as is the case currently with the principles in Regulation 18 of the Public Contracts Regulations or Regulation 36 of the Utilities Contracts Regulations). The Government has not explained what status an “objective” will have within the new legislation, so we do not know if it will carry quite the same weight as a principle, although a failure to follow those objectives may still give rise to a challenge and the Procurement Review Unit presumably may be able to take action if those objectives are being ignored.

The main difference between the new proposed principles and obligations, and the current Regulation 18 (and 36) is therefore the removal of proportionality, although that will be built into the legislation in other ways and will not disappear altogether.

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0330 137 3451.