Begin at the beginning," the King said, very gravely, "and go on till you come to the end: then stop.”
The Procurement Act 2023 has now had Royal Assent (although admittedly not from Lewis Carroll's King of Hearts!)
The latest from the Cabinet Office is a continued aim for the Act to go live in October 2024. We expect secondary legislation to be finalized in March 2024, and for formal policy guidance to be issued on the Act in February 2024.
Recent Cabinet Office webinars on the Act have shone more light on transitional arrangements which are currently being consulted on and which will be set out in secondary legislation under the Act.
Broadly speaking, the transitional arrangements are expected to mirror those we saw when the Public Contracts Regulations 2015 (PCR 2015) came into force (although there will be some key differences, which we will discuss below).
If a procurement is started on or after the implementation date, it will be regulated by the new Procurement Act. If it was started before the implementation date, it will be regulated by the PCR 2015 (or their equivalent utilities/concessions or defence regulations).
"Started" here could mean any of the below:
- submitting a notice for the purpose of inviting tenders, requests to be selected to tender or to negotiate, or requests to participate in relation to a contract or framework agreement;
- publishing an advertisement seeking offers or expressions of interest in relation to such a contract or framework agreement;
- contacting a person in order to seek an offer or expression of interest in relation to such a contract or framework agreement;
- contacting a person in order to respond to an unsolicited offer or expression of interest in relation to such a contract or framework agreement; or
- entering into such a contract or concluding such a framework agreement.
There is a question around whether this excludes or includes mere Prior Information Notices where these are for information only and do not invite tenders; it will be helpful to have final sight of the regulations to see the drafting on this point. At present it is not entirely clear whether publication of a PIN will be sufficient to "start" a procurement.
The Cabinet Office webinars confirmed that, where a procurement is in pre-market engagement immediately prior to implementation date but the tender notice is published on or after the implementation date, there is no need to run the pre-market engagement again under the new regime. Instead, the authority can simply explain the position on pre-market engagement in its tender notice, by for example, referring to any Prior Information Notice published under the PCR 2015.
Some non-competitive contracts will be regulated by the Procurement Act 2023 but will never see a tender notice published as this is not required; for example, direct awards of contracts, or contracts awarded without competition under an in-house or collaboration arrangement. Transitional provisions based on the point at which a tender notice is published will not therefore “work” for these kinds of contracts.
To address this issue, the draft transitional arrangements state that, for a non-competitive procurement such as this, where the contract is signed less 3 months following the go live date, the PCR 2015 will apply to the contract. Where the contract is signed more than 3 months following the go live date, the Procurement Act 2023 will apply. If you have published a VEAT for this contract, this may impact on the above – depending on timing, this may have the effect of either dragging the contract back into the PCR 2015 or pushing it forward into the Procurement Act 2023.
The transitional provisions are still being finalized so it is possible that the above could change.
Hold on to your copy of the PCR 2015 …
The key new feature of the transitional arrangements for the Procurement Act is that, where a contract is in procurement/operation prior to the implementation date you really do need to "go on till you come to the end" and apply the old regime until that contract has terminated.
This includes extensions and variations to contracts; where the contract is an "old world" contract, you will need to apply Regulation 72 PCR 2015 even where the modification is executed on or after the implementation date. You might think this does not make much difference in practice, given that the "safe harbours" in schedule 8 to the Act are very similar to those in Regulation 72 PCR 2015 (with a couple of tweaks/additions). However, a key impact is that a different notice regime will apply – the Procurement Act imposes an obligation to publish Contract Change Notices for all changes (other than low value changes) under section 75 of the Act.
This means that we will potentially need to keep hold of our copies of the PCR 2015 for many years to come. For example, where a ten-year contract is signed just prior to implementation, we currently expect that extensions or variations to it will still fall under Regulation 72 PCR 2015 in 2034!
In a similar way, where a framework or DPS is established prior to implementation, all contracts called-off under it will be regulated by the PCR 2015 for their whole term. So for example, where a framework is established in summer 2024 for 4 years, contracts called off under it could still be in operation well in the 2030s; all falling under the old regime.
The pre-election period and transition
At present we do not know when the next general election will be held, only that it must be held by 25 January 2025. In the six or so weeks running up to a General Election, the convention of a “pre-election period” (referred to by some as "purdah") applies, to ensure that no announcements or decisions are made by governments, ministers or civil servants which might affect the outcome of the election. In practice this means that government departments may well need to pause key commercial or strategic decisions about procurements. This means that if the Procurement Act implementation date is late October 2024, it may fall within the pre-election period. This may affect the freedom of government departments to commence procurements immediately ahead of the implementation date in order to fall within the old regime (if this were to be strategically desirable).
Keep up to speed
Do bookmark our Reform page as we will post all our latest news and content there, as we approach the implementation date. You could also sign up for our series of 5 in 25 Countdown webinars where we are looking at the Procurement Act 2023 and its impact on each stage of the procurement process; the next webinar is on Routes to Procurement at 10am on 29 November 2023- you can sign up here.