On Friday, the government published the second tranche of its official guidance on the Procurement Act 2023, ahead of its implementation in October of this year. This tranche of the guidance covers the pre-procurement phase, looking at:
- The National Procurement Policy statement
- Technical Specifications
- Pipeline Notices
- Planned Procurement Notices
- Preliminary Market Engagement Notices
In this article we look at some of the key new points emerging.
National Procurement Policy Statement
The guidance confirms that the statutory duty at section 13 of the Act is to “have regard” to the National Procurement Policy Statement. However, if an authority fails to demonstrate that it has had regard, it will not be possible for a supplier to bring a procurement claim for breach of the section 13; this will only be actionable by way of a judicial review claim outside the remit of the Act itself.
Pipeline Notices
Section 93 of the Act introduces a new obligation on all contracting authorities expecting to spend over £100m in the coming financial year on goods, services or works contracts, to publish a Pipeline Notice giving details of all such contracts that are expected to be valued at over £2m in respect of which the authority expects to publish a Tender Notice (i.e. in relation to a competitive procurement process) or Transparency Notice (i.e. in relation to a direct award without a competition).
The guidance confirms that the current obligations around publishing pipelines as set out in the Sourcing Playbook will be met by virtue of publishing a pipeline notice under the Act.
Calculating the threshold
In terms of calculating whether the £100m threshold is met, the guidance states:
- authorities must include all relevant works, goods and services contracts;
- including below-threshold contracts and contracts called off from a framework or dynamic market; and
- take account of payments made to the supplier under existing and future contracts during this financial year.
There is no need to include the total value expected to go through a framework or dynamic market in this financial year, only the value of contracts that this authority expects to call off itself. Where authorities are jointly calling off, then a lead authority should take responsibility for pipeline reporting.
Where it is not clear whether the threshold will be met in this financial year (for example, perhaps because funding for a contract may be split over several years in practice), authorities are encouraged to publish a Pipeline Notice for this financial year in any event.
Central Purchasing Bodies
These are advised that it will be good practice to publish a Pipeline Notice to provide visibility wherever they are establishing a framework where the expected value going through the framework is more than £2m.
Timing of publication
The deadline for publication of a first Pipeline Notice will be 26 May 2025, with a new Pipeline Notice being due every 26 May thereafter.
Mechanics of publication
Some e-platform providers may offer a service for making a bulk upload of pipeline notice information. If an authority is publishing the notice directly to the new central digital platform, then information about each £2m+ contract will need to be inputted individually; each will have its own identifier so that future notices can link back to the Pipeline Notice accordingly. The longitudinal pipeline will then be viewable by selecting a “Pipeline Notice View” on the platform.
Updating a pipeline notice
The guidance acknowledges that the Pipeline Notice is a snapshot at the time of publication and authorities will not be held to it as requirements change/evolve over time. However, it also recommends that authorities return to the pipeline information provided and update it from time to time as appropriate during the financial year, although this is not a statutory requirement.
“Best practice” provisions
There are areas where the guidance recommends authorities go further than the minimum requirements of the Act. For example, including in the pipeline notice:
- works contracts valued at over £2m;
- other contracts valued at over £2m where no tender notice/transparency notice is required;
- contracts valued under £2m where these are suitable for SMEs; and
- relevant contracts with a term longer than 18 months.
If a contract listed in the pipeline does not eventually materialise as a formal procurement process, the guidance recommends as best practice publishing a Procurement Termination Notice linked back to the unique identifier for that contract originally set out in the Pipeline Notice.
Planned Procurement Notices
Section 15 of the Act covers Planned Procurement Notices; these are optional notices and will work in much the same way as a prior information notice (PIN) does currently. If published within certain time parameters, a Planned Procurement Notice can reduce the minimum timescales required for the procurement process.
Where the eventual procurement is significantly different from that described in the Notice?
The guidance is interesting on the question of what an authority should do in the case where it has published a Planned Procurement Notice, but the actual procurement turns out be significantly different to what was originally published.
The guidance confirms that minimum timescales should not be reduced where the procurement has developed to such an extent that there is potential for a wider or different field of suppliers to be interested in participating. Also, there is a requirement to consider what was stated in the planned procurement notice in terms of timing; for example, if the notice stated an intention to commence the procurement in six months’ time and the contract is then advertised in only two months’ time, it would not be appropriate to reduce the timescales in this situation.
Where the procurement does not in the event materialize?
The guidance confirms that good practice will be to publish a Procurement Termination Notice linked back to the unique identifier for that contract originally set out in the Planned Procurement Notice.
Preliminary Market Engagement (PME) Notices
Sections 16 and 17 of the Act cover PME Notices. There is no requirement to conduct PME under the Act. But if an authority wishes to do so, it must publish a PME Notice (or, in what are expected to be limited circumstances, provide a justification in the tender notice why it did not do so).
In our experience PME is usually a valuable exercise and one which is likely to increase the likelihood of a timely and successful procurement. With the increased flexibilities in the Act to run a bespoke flexible procurement process, PME will be a good opportunity to “trail” to proposed procurement process, as well as requirements and contract terms, with potential tenderers.
Who is invited to engage with the authority?
The guidance contemplates that PME will be commenced by way of a PME Notice in the majority or cases suggesting that at least initially the whole market will be able to respond to the exercise.
The guidance acknowledges that a “reduction of numbers” mechanism may be included, given that an authority may not have the resources to engage with all respondents. However, any reduction process must be fair, transparent and treat suppliers equally in accordance with the section 12 duties.
The guidance helpfully confirms that it is acceptable to hold PME events aimed specifically at SMEs, provided that the eventual procurement does not give SME suppliers an unfair advantage over other tenderers.
PME without publication of a PME Notice
If the authority intends to conduct PME without using a PME Notice, then this is possible, although the guidance reminds authorities that the reasons for this will need to be set out in the subsequent tender notice for the procurement, and that these of course will be open to scrutiny. The guidance expressly states that the Procurement Review Unit will be a route where suppliers may raise concerns around PME being conducted without a PME Notice being published. It also states that the expectation is that non-publication will be appropriate in only limited circumstances, for example where there are national security issues or time critical factors.
Timing of the PME Notice
The guidance confirms that the Act prescribes no minimum time limits but reminds authorities that timescales for responding to the PME Notice will need to be sensible and proportionate, especially where suppliers will need prepare for the PME exercise in some way.
Managing Conflicts of Interest in the PME context
By section 83 of the Act, prior to commencing a procurement by publishing a tender notice, the authority must prepare a “conflicts assessment” identify any possible conflicts of interest and indicating how these have been addressed. The guidance reminds authorities that this will be relevant in the PME context and that:
- suppliers involved in PME should be excluded from a procurement only as an absolute last resort if there is no other alternative in order to ensure equal treatment; and
- record keeping in relation to the PME exercise is essential to be able to share information with tenderers at tender stage; the guidance suggests publishing, as part of the tender documents, a “PME Outcomes” document.
Where a PME Notice has been published but the authority does not proceed to a full procurement?
In this situation, the guidance confirms that there is no need to publish a Procurement Termination Notice.