|20th January 2021|
Following the publication of the Transforming Public Procurement Green Paper, SUPC will be surveying members and providing several opportunities for you to tell us how you feel the proposed changes could positively or negatively impact your institution and the wider sector. In the meantime, SUPC’s Jayne Thorn has highlighted the key changes and what these could mean for you.
The Transforming Public Procurement Green Paper was published by the Cabinet Office on December 15th and I can’t have been the only one excited to read it over the Christmas break.
SUPC hosted a round-table discussion with the Cabinet Office and members, back in March 2020 – just days before we went into lockdown. The Cabinet Office put forward a series of proposals and ideas for discussion and took the responses away to refine this document for formal review.
So, what are the headlines from the paper? And what does it mean for our HE members and how they conduct procurement and access consortia frameworks in the future?
The Ministerial Foreword makes many bold statements with strong sentiments, seeking to help the sector escape from being ‘bogged down in bureaucratic process-driven procedures.’ The talk of abandoning stifling rules to ‘unleash the potential of public procurement’ to ‘meet the needs of the market’ is very welcome. While the Executive Summary gives a good high-level review of the proposed solutions, it might appear somewhat ‘rose-tinted’. The paper suggests the setup of safeguarding measures and an oversight committee, as well as retraining for the entire public sector buying community, supply market, and our much relied upon legal support. The timescales and roll out here will be crucial to success.
The green paper suggests bringing together all the regulations across Public Contract Regulations, Concession Contract Regulations, Utilities Contract Regulations, and the Defence and Security Procurement Contract Regulations. It makes sense to have a standard boilerplate set, plus small sector-specific additions where appropriate. One advantage here has to be of skills and access for the procurement community – enabling easier career moves between disciplines, and a greater pool of candidates where experience of the regulations is necessary. The creation of common principles will undoubtedly help de-mystify public procurement and yield more understanding for buyers and suppliers. There is also clearly a drive for technological innovation. The green paper also suggests a dramatic use of technology to introduce a new ecosystem and the ability of exclusion for poor performance and unacceptable activity – that can only be a good thing.
The biggest change to affect our working lives will be the change in procurement processes, reducing the current seven, down to just three, which will be:
- The retention of the current open procedure for simple off-the-shelf procurements
- A competitive flexible approach, which allows for innovation and negotiation
- The ‘limited tendering procedure’
The latter being the current ‘negotiated procedure without prior publication’, but with a new name.
1. The Open Procedure
This remains available in the format we know it today. There will be a mechanism to use what is an ‘open procedure’ though the new ‘competitive flexible process’ but the open procedure is being retained.
It is the most popular procedure, and the paper suggests that it will still be available for ‘simple requirements’ and kept as a default standard procedure for ‘inexperienced buyers’. Reading between the lines, it suggests that this procedure should only be used for simpler ‘routine’ tenders, such as stationery or cleaning supplies, and other catalogue items where the supply market is generally stable in every respect.
2. The Competitive Flexible Procedure
This is the biggest change to the regulations as we know them. It brings together and replaces the restricted, competitive dialogue and competitive procedure procedures with negotiation, innovation partnerships and design contests. It is written to give maximum flexibility to allow commercial teams the option of ‘designing’ their own procedure. It can also be used for concessions contracts.
The basic principles of procurement outlined in the green paper remain as per their introduction: transparency for adverts and notices, which should contain basic information regarding the opportunity and contracting authority. The buyer should do what they said they were going to do, with regards to the procurement process they have designed and published.
The process design needs to outline the selection and evaluation criteria, and again, buyers must do what they said they were going to do. There are time limits given: 30 days for expressions of interest, 25 days for tender submission following the issue of the ITT, and possible reductions for justifiable urgency.
The changes will allow for stages in the process such as negotiation and reverse auctions. It can contain stages to restrict the number of bidders according to technical merit. It will allow an evaluation of products or technology before restricting the number of bidders, and it will also allow for demonstrations. The negotiation and final stages with final bids would still need to be in accordance with the initial publication, but the idea is to create better value and flexibility through the tendering process.
The Cabinet Office acknowledges that there are risks involved: unfamiliarity, greater divergence in processes (making it harder for the supply market and for buyers to gain experience), prolonged time frames for additional stages, and a potential increase in challenges while the new procedures ‘bed-in’.
3. The Limited Tendering Procedure
The rules around this are not as extensive as perhaps they should be, and it leaves the process and subsequent challenges open to the same reasoning used when justifying the incorrect use of Regulation 33.
Frameworks are another area that the Cabinet Office has covered, perhaps without much insight from experienced framework practitioners. There is a valid point that the call-offs from frameworks are difficult to track and audit since there is no direct link between call-offs and the original framework on any system. The new system proposals intend to tackle this.
There are two types of frameworks proposed:
With a maximum term of up to four years. We are all currently familiar with this procedure.
Up to eight years in length, provided the competition is reopened at least once, with an initial closed period of up to three years (the wording around the three-year part is somewhat contradictory). Frameworks can be opened up as many times as the contracting authority requires.
At the ‘opening’ point, potential new suppliers can submit a bid against the original tender. Incumbent suppliers can also choose to resubmit their bids. However, if buyers have specified a maximum number of suppliers on the framework, then new suppliers might take the place of incumbents, allowing them to resubmit.
While this appears administratively heavy, it could work to improve overall pricing. Particularly for the supplier that submitted an excellent, but expensive bid, and does not gain much traction on a framework. It will provide an opportunity for suppliers to sharpen up in the face of renewed competition.
The paper references a mandatory exclusion, making it easier to exclude supplier’s mid-way through a contract if they are found guilty of fraud or modern slavery offences, for example. The Cabinet Office proposes to make it easier to exclude bidders for past poor performance, how poor performance is defined and how suppliers are assessed against those standards. This is interesting and will require a wide discussion to determine appropriate grounds. It is proposed that a central debarment list will be established, although there is less detail as to how that may function or be monitored.
There’s a move away from MEAT (the most economically advantageous tender), suggesting that buyers always select the cheapest bidder, and moving towards ‘most advantageous tender’. I would argue that the consortia and universities have already made this transition, given the HE sector’s increased focus on quality and sustainability.
The paper also suggests a central repository of bidder information, much like the ‘evidence locker’ that was mentioned at the round-table event. This would cut down on every contracting authority asking for the same information, reducing the administrative burden on SMEs and I am sure would be broadly welcomed as a means of streamlining procurements.
The obvious issue here is that for career public procurement professionals, there is the potential for a huge skills gap where negotiation is concerned. We all learned negotiation as part of CIPS training, but how many put it in to practice and excel at it? Does it leave the public sector open to a skilled supply market taking advantage while we play catch up? I know SUPC and our sister division SUMS Consulting, in conjunction with UK University Purchasing Consortia partners, will draw on our pool of expertise to support members to close any gap.
The Green paper also includes the creation of a new unit to ‘oversee’ public procurement with the powers to review, intervene and make recommendations to improve the capability of contracting authorities. Here we may have another alarm bell sound as it prompts several governance issues. Who will be overseeing it? How is that panel of individuals being chosen to review and intervene? What training do they have in real-world procurement? Where and to whom do they report? Should it be HM Government Public Appointments doing the recruiting, and should it be entirely independent like the Law Commission?
There are other changes proposed such as the system on which tenders are advertised, and what information is made available to suppliers once the tender is concluded. There are many proposals to centralise a lot of information, such as debarment lists, supplier registers, contract performance, complaints, and legal challenges. While transparency is good, the amount of information the government are proposing to collect might hint towards a feeling of big brother watching.
Many of the questions for feedback are restricted to a simple yes/no, which doesn’t allow a great deal of context or to agree with part of a proposal but not all of it. Feeding back will therefore be crucial to ensure the regulations work for those that use them daily. SUPC will be issuing a Survey to members to solicit their observations and priorities and we will use that feedback to inform our response and submission. We do encourage all members to submit their responses to the questions posed in the paper, as more feedback can only yield a better outcome.