The Public Procurement Bill & Social Responsibility

The Public Procurement Bill & Social Responsibility

Key Contact: Declan Goodwin

Author: Courtney Wilbor

Following the UK Government’s publication of its Green Paper “Transforming Public Procurement”, the Procurement Bill has passed through both Houses, and is currently in the final consideration of amendments stage before it receives royal assent. Whilst the Bill is not expected to be passed until later this year, it is essential that any entity considering bidding for public contracts is fully aware of the proposed changes.

Similarly, the Social Partnership and Public Procurement (Wales) Act 2023 (the SPPP Act) was passed by the Senedd on 24 May 2023, and is significant for any entities looking to bid for public contracts within Wales.

The Procurement Bill seeks to reform the existing Public Contracts Regulations 2015, focusing on implementing a “quicker, simpler, more transparent” system following the UK’s exit from the European Union. Under the current regime, any procuring body is subject to a choice of five procedures during the tendering process. Many bodies note that this results in confusion due to differing rules, time limits, and the permitted communications with bidders across the procedures. Under the new Procurement Bill, this has been simplified to two tendering procedures:

1. A single-stage tendering procedure without a restriction on who can submit tenders; or
2. Any other tendering procedure that the public body in question deems appropriate in the circumstances, including potentially limiting the number of tender submissions throughout the process.

As highlighted above, another significant focus of the Procurement Bill is improving transparency. The rationale for this being that any public procurement decisions can be more readily subject to scrutiny. Under the new Procurement Bill, any public bodies must publish:

• A contract award notice before entering into a public contract (previously this did not have to be issued until after);
• A “pipeline” notice should they believe that they will spend more than £100 million on specific types of procurement in the next financial year;
• A copy of any public contract with a value exceeding £2 million within 90 days of entry into it;
• Greater information about the selection and evaluation of the bids to any bidder that is unsuccessful; and
• Where any amendments are to be made to the contract, a contract change notice.

A further significant amendment proposed in the Procurement Bill is the implementation of new rules regarding the debarment of suppliers. Where any public body excludes a supplier, under the new Procurement Bill, they are required to notify the relevant Minister so that it can be considered whether that supplier should be placed on the “Debarment List”. This amendment seeks to empower contracting authorities so that they can exclude any supplier on the list as a result of their previous poor performance, this aiming to improve the quality of supplier performance across the board.

A final proposed set of amendments in the Procurement Bill relates to the remedies available, these intending to make the determination of public procurement disputes more accessible. Some key changes to note are:

• The mandatory standstill period will be eight working days, as opposed to ten calendar days, this seeking to minimise authorities from issuing a standstill letter on a Friday and before public holidays so that the number of working days that any unsuccessful bidder will have to consider whether to bring a challenge during the standstill period is reduced.
• Replacing the current ineffectiveness remedy, the conditions for obtaining the new set aside remedy shall be satisfied if the claimant can demonstrate that they were denied a proper opportunity to seek pre-contractual remedies because:
• The required contract award notice was not published;
• The contract was entered into or modified prior to the end of any relevant standstill period;
• The contract was entered into or modified during an automatic suspension or in breach of a court order;
• Awareness of the breach arose only on publication of a contract award notice or a contract change notice;
• Awareness of the breach arose only after the contract was entered into or modified.

Conversely, the SPPP Act largely centres around improving public services through “social partnership working, promoting fair work and socially responsible public procurement” via the establishment of a Social Partnership Council and the introduction of a statutory duty on specific public entities to ensure their compliance with the SPPP Act’s social responsibility requirements.

What is socially responsible public procurement? Senedd Cymru defines this as “taking action when purchasing goods, works and services, to improve economic, social, environmental and cultural well-being”. The SPPP Act aims to utilise the Social Partnership Council to advise and inform Welsh Ministers on the content of the SPPP Bill to ensure that socially responsible thinking is at the heart of public procurement within Wales.

The SPPP Act seeks to achieve the above in a number of different ways, including:

• Placing Welsh Ministers under a duty to publish model social responsibility clauses in outsourcing contracts. Only where an exception is given by Welsh Ministers will it be possible for such a contract to be used in the procurement process.
• Establishing a Social Partnership Duty on public authorities to improve the economic, social, environmental and cultural well-being when carrying out work, engaging with their workers and employers in doing so to ensure all work has social responsibility at the core.
• Implementing socially responsible contract terms not only in the public body’s contracts, but also throughout their supply chain to prevent unlawful practices.

Next steps

As discussed above, both of these developments present significant changes to the public procurement landscape. Any business considering whether to submit a bid for such work in the future should be fully aware of the obligations they will need to comply with.

For further information and assistance on any public procurement queries you may have, please get in touch with our Commercial and Technology Team.