Amendments to procurement legislation

The Free Trade Agreements with Australia and New Zealand have prompted amendments to current procurement regulations to give effect to the UK's obligations under those trade agreements. The amendments were laid before Parliament on 4 May 2023 and are due to come into force on 25 May 2023 under the Public Procurement (International Trade Agreements) (Amendment) Regulations 2023/484. The amendments will only apply to procurements commenced after the 2023 Regulations come into force.

The main change to current procurement regulations is the removal of the use of the Prior Information Notice for making a call for competition (and the Periodic Indicative Notice in the Utilities Contracts Regulations 2016 (UCR). This applies to both the Public Contracts Regulations 2015 (PCR) and the UCR. Whilst not widely used, it is important for contracting authorities and utilities to be aware of this change.

There are also changes in the procedure to calculate the value of lots and procurements which apply to the PCR, UCR and Concessions Contracts Regulations 2016 (CCR). The amendments provide that:

• For procurements under the PCR and UCR, where the value of one or more lots cannot be estimated then the aggregate value of the lots awarded cannot exceed 20% of the aggregate value of all the lots which can be estimated. For example, say a procurement has 3 lots and the procuring authority estimates that Lot 1 has an estimated value of £1 million, Lot 2 has an estimated value of £2 million but it cannot estimate Lot 3. Under this rule (for procurements commenced after 25 May 2023) the aggregate value of Lots 1 and 2 (which can be estimated) is £3 million. That means the total value of Lot 3 which can be awarded cannot exceed £600,000, and
• Where the value of a procurement cannot be estimated then the estimated value (including VAT) shall be equal to the relevant threshold detailed in the regulations (regulation 5 PCR, regulation 16 UCR and regulation 9 CCR).

Finally, a new obligation has also been introduced which prevents contracting authorities and utilities from terminating contracts "in a manner which circumvents their obligations under the regulations" (regulation 18 PCR, regulation 36 UCR and regulation 8 CCR).