Pre-Procurement Considerations under the Procurement Act 2023

Now that an individual Pipeline Notice needs to be published for each planned contract spend over £2m in the relevant period, we agree that the function of the two notices seems to be closer together than was perhaps originally the plan, when it looked like a Pipeline Notice was intended to be a single notice containing a snapshot of all projected spend on contracts >£2m.

However, there are still distinctions between the two; for example, you must publish a Pipeline Notice by the May deadline regardless of when you plan to begin the procurement provided that the relevant spend will fall in the relevant reporting period, but you would tend to publish a Planned Procurement Notice only when the commencement of a procurement was realistically in contemplation. 

The guidance simply says: “Whilst not a requirement of the legislation, contracting authorities are encouraged to review and update their pipeline notices throughout the year, adding new procurements above the £2 million threshold”. This suggests an ongoing process from  time to time but doesn’t set out a timeline. 

We agree that this is a confusing area. If the extension is for more than than 10% (services/goods) or 15% (works), or for more than 10% of the original maximum term, then a Contract Change Notice will be required referencing the identifier for the contract. We assume that publishing a Pipeline Notice creates a new identifier – which would cause confusion. It is not clear how this would work in practice, especially given that the Act contains no absolute requirement to publish a pipeline notice in relation to extensions.

It will depend on exactly what research is being done, but the fact that the research is desk based only does not automatically preclude it from being a preliminary market engagement activity as listed in section 16 of the Act, namely (a) developing the authority’s requirements and approach to the procurement;( b) designing a procedure, conditions of participation or award criteria; (c) preparing the tender notice and associated tender documents; (d)    identifying suppliers that may be able to supply the goods, services or works required; (e) identifying likely contractual terms; and (f) building capacity among suppliers in relation to the contract being awarded.

This is certainly a important consideration. Any unfair advantage could be mitigated by ensuring procurement timelines are generous enough to give those tenderers who are seeing the PSQ/ITT for the first time plenty of time to digest and respond to it.  This should nullify any advantage that those involved in the PME might have had due to their early sight of the proposed documents. 

The PME Notice allows authorities to describe the PME conducted. Many authorities also produce a PME report that summarises the PME process and outcomes, which can then be shared within or ahead of the commencement of the procurement to create a level playing field in terms of information provided. 

If you have done any PME, then the PME notice published retrospectively needs to be published prior to the publication of a Tender Notice (although no express timeframe is set out in the Act). 

This would be a technical breach of the Act, and in principle a supplier could make a challenge if the failure to publish the PME notice had caused, or was likely to cause, it to suffer a loss. This kind of claim would likely be part of a wider argument that the authority had not treated suppliers equally and that the failure to publish the PME notice was a part of that. This kind of claim is likely to be rare; perhaps more likely would be an intervention from the Procurement Review Unit in response to a supplier complaint. 

There is no absolute obligation to carry out PME under the Act (although we usually recommend it). The obligation is that, where you have chosen to do PME, you must then publish a PME Notice. Making a direct award to the incumbent other than in compliance with the direct award process set out in the framework would of course be an unfair advantage and unequal treatment.

The same rules apply here as for an “ordinary” public contract. 

The ‘general rule’ requires contracting authorities to estimate the maximum value payable under the contract, taking account of any potential variables such as options to supply additional goods/services/works or options to extend or renew the contract. The guidance on valuation sets out a non-exhaustive list of matters that could be relevant to this assessment. It is possible for the final value of the contract as entered into to be different from that originally advertised – the actual final value will be included in the Contract Details Notice. Provided the values are not significantly different, this is not likely to create procurement risk. However, where the contract value as entered into is significantly different to that originally advertised, this carries the risk of a challenge based on the fact that the contract signed is not the one that was originally advertised – particularly from tenderers who chose not to tender on the basis of the original stated value but who would have tendered based on the actual final value. 

In this case you would need to make the best estimate possible of the maximum amount you expect to pay under the contract. It is understood that this is only an estimate. The guidance on valuation is helpful.