Small Business, Enterprise and Employment Act 2015

This Act received Royal Assent at the end of March. In this post, we look at its relevance for procurement practitioners and suppliers alike.

Why is it relevant?

The Act is wide-ranging in scope but two particular sections are important from a public procurement perspective.

Section 39 of the Act which came into force on 26 March 2015 gives the Secretary of State the power to introduce regulations to impose duties on contracting authorities around streamlining and efficiency in public procurement and creating a level playing field for SMEs. A contracting authority will not be within the scope of the Act if its main functions are devolved functions in Scotland Wales or Northern Ireland. The types of duties imposed may include:

  • duties to exercise functions relating to procurement in an efficient and timely manner;
  • duties relating to the process by which contracts are entered into (including timescales and the extent and manner of engagement with potential parties to a contract);
  • duties to make available without charge:
    • information or documents;
    • any process required to be completed in order to bid for a contract;
  • duties relating to the acceptance of invoices by electronic means (including a prohibition on the charging of fees for processing such invoices the publication of reports relating to the number of such invoices received or the electronic systems that must be used by a contracting authority); and
  • duties to publish reports about compliance with the regulations.

The government has been consulting on draft regulations; as yet there is no definite timetable available for when these will be finalised. When they are in force however the Public Contracts Regulations 2015 will no longer represent the complete picture when it comes to the regulation of public procurement particularly given the new investigatory powers we discuss in the next paragraph.

Section 40 of the Act which comes into force on 26 May 2015 will give statutory footing to the Mystery Shopper scheme  granting the Secretary of State the power to investigate the way a contracting authority conducts its procurement functions. This is a wide remit; it covers the design and planning of the procurement process the process itself and the management of the contract ultimately awarded.

There are exemptions from the threat of investigation for maintained schools/Academies/the procurement of clinical health services and central government departments. The section also gives the government the right to publish the outcome of the investigation potentially a fertile source of reputational risk for contracting authorities.

Further information about sections 39 and 40 of the Act is available in BIS's factsheet here. Once the s.39 regulations are available we will blog again.

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