Transforming Public Procurement – WBD's response to the Green Paper. Blue sky thinking or a brewing storm?

In anticipation of the UK's exit from the European Union, the Cabinet Office published its Public Procurement Green Paper on 15 December 2020. It serves as an aspirational mission statement for the future of public procurement post-Brexit. The document reflects the overarching political climate in which it was composed, with the ministerial foreword taking aim at the EU's "outdated public procurement regime". The new proposals align themselves with the international Agreement on Government Procurement, and seem to deliberately steer away from the previous regime as a point of principle, towards one that "better meets the UK's needs".

The direction of travel is to move away from the EU framework, to streamline the procurement process, and to make it more transparent. The key points set out in the 82 page Green Paper are outlined below, followed by Womble Bond Dickinson's response.

Key points

1. The Green Paper proposes a new set of core principles that focus on public good, value for money, transparency, integrity, fair treatment of suppliers, and non-discrimination. The expectation is that these principles would be adhered to in every procurement, and that procurement priorities would mirror national policy requirements.
2. Multiple existing procurement regulations will be consolidated into a single framework. The aim is to simplify the regulatory environment and make it more agile. The NHS (Procurement, Patient Choice and Competition) (No.2) Regulations 2013 will not be incorporated.
3. The 8 existing procurement procedures will be slimmed down to just 3 "modern" replacements. There is to be a "competitive flexible procedure" giving buyers freedom to negotiate and innovate, standard procedure competitions , and a "limited tendering procedure" which introduces a new 'crisis' criteria for urgent procurement. Again, the terms "simple" and "flexible" appear multiple times in the reasoning for this change.
4. The award of contract would no longer be on the basis of the "Most Economically Advantageous Tender". Instead, contracting authorities will award on the basis of "most advantageous tender" and can (as now) award based on criteria such as environmental or social value.
5. A new Dynamic Purchasing System (DPS+) would be created to encourage an agile environment through which any contract award would have to take place. New framework agreements could exist for up to 8 years.
6. To promote transparency, a new digital platform would be created for the registration and key information of all suppliers – accessible by all public bodies.
7.  A democratised challenge system for procurement decisions. This would make the review system faster and more accessible to suppliers, cap damages, and reduce the scope for speculative suppliers to claim damages for loss of chance.
8. Proposals to make contract management more effective, with a view to reducing payment delays via escalation, transparency of supplier payment performance, and centralised reporting requirements. It would also be mandatory for all contract amendment notices (other than certain exemptions) to be published.

WBD response

This Green Paper's clear aims of flexibility and transparency are laudable. However, there are significant gaps in the Government proposals that require careful consideration. These gaps could leave space to be filled by increased complexity and burdens for both authorities and suppliers. There is also scope for political factors to warp priorities, and conflict of interest within review panels.

Centralising aspects of procurement such as a debarment list, a single digital platform for commercial data and the DPS+ system have great streamlining potential but the concern is in the deliverability and flexibility of these projects compared to current circumstances. Could the Government inadvertently make things more complex in its haste to move away from the EU regime?

There are some ways in which WBD feels the Paper could have been more helpful, for instance by discussing the issue of threshold harmonisation between Utilities and Authorities, guidance/clarification on R&D contracts, and clearer guidance that Authorities will be acting lawfully when inviting innovative solutions to their problems. Additionally, the Paper could benefit from adopting 'proportionality' into its new list of legal principles, as this issue sits behind many claims.

42 consultation questions were issued by the Cabinet Office, inviting interested parties to reply by 10 March. These questions cover the entire spectrum of the Green Paper's proposals and the answers will help to shape the legislation. View WBD's detailed responses here.