Explaining the Procurement Regulations 2024

The laying of the Procurement Regulations 2024 (the Regulations) before Parliament last month marked a significant step on the path towards the commencement of the Procurement Act 2023 (the Act). Here we set out the key points of the Regulations and what more to expect on the roadmap to October 2024.

 

A snapshot of the consultation process

On 25 March 2024 the draft Regulations were laid before Parliament, meaning we can expect them to become law by mid-June 2024. The Cabinet Office will need to make further regulations to:

• bring the main body of the Act into force;
• provide for the transition between the existing public procurement regime and that provided for under the Act; and
• deal with certain matters previously consulted on that the Cabinet Office needs more time to draft.

The Cabinet Office plans to publish the next set of regulations in June or July.

The publication of the Regulations followed the Government’s response to the two part consultation on them over the summer of 2023. Part 1 concerned areas of the Act that required lists, calculations or further definitions to be used in practice. Part 2 related to the contents of the notices used under the Act.

 

The key changes and confirmations

The Cabinet Office has decided that no significant changes are required to the provisions that were subject to the Part 1 consultation. However, in a number of important areas, the Cabinet Office has indicated that it needs further time to adequately address the comments received and undertake further drafting. This includes the methodology for calculating the various thresholds that determine whether contracts between public sector bodies and intra-group utilities arrangements are subject to the Act. We can expect to see the detailed drafting in June or July.

In the Part 2 consultation, stakeholders also generally expressed satisfaction with the proposed measures. While dissenting voices were minimal, concerns regarding practical implementation details and notice policies surfaced throughout and have been addressed by the Cabinet Office. 

1. Planned Procurement Notices and Tender Notices:

Both notices received strong positive responses from stakeholders, with a significant majority expressing agreement with their effectiveness. However, the Cabinet Office noted there have been concerns over practical application, which it plans to address in guidance, including questions relating to variant bids and the split of information between the tender notice and the associated tender documents. The Cabinet Office also agreed with recommendations that the contracting authority should clearly state in the notice whether the opportunity will be appropriate for SMEs and/or VCSEs. This is reflected in regulation 18(2)(t). 

2. Pipeline Notices:

Importantly, the Cabinet Office confirmed that authorities will not be firmly bound to the statements and specifications made in Pipeline Notices. Instead these will be understood as indications of the authorities’ intentions based on information available at the time of publication.

3. Assessment Summaries:

The Cabinet Office has changed some of the key information that contracting authorities will provide to unsuccessful bidders. The consultation draft of the Regulations stated that contracting authorities would need to tell bidders why they did not receive a higher score for each award criterion and sub-criterion. Submitters complained that this required an extra step for contracting authorities. The Cabinet Office confirmed that this was not the intention and have redrafted the relevant provision: regulation 31(2)(e). This now states that the assessment summary must state the score the bidder achieved for each award criterion and “an explanation for that score by reference to relevant information in the tender”. Guidance will now state that it is best practice to set out why the bid did not receive a higher score.

4. Contract Award Notices

The Cabinet Office has introduced separate forms of contract award notice for private utilities, which require them to publish much less information than is contained in the contract award notice applying to other contracting authorities.

5. Contract Change Notices

The Cabinet Office accepted that practical difficulties could arise from the requirement to publish contract change notices. These difficulties relate to the volume of notices required where contracts are subject to a high volume of change notes and the requirement to publish the notice before implementing the change. The Cabinet Office said it would address those points in guidance, confirming that contracting authorities will need to publish contract change notices for the majority of contract modifications. This will create a significant change and additional burden to contracting authorities in order to bring what the Cabinet Office calls “much-needed transparency to what happens during the life of a public contract”.

 

Conclusions

The Regulations provide a significant piece of the jigsaw puzzle of how the Act will operate in practice. We still await final decisions on the transition between the existing regime and the approach introduced by the Act. However, we do know that the Cabinet Office has decided on a clean break between the two. Procurements started under the existing regime will continue under those rules while the Act will apply only to procurements that start once it is brought into force.

Time will be tight to bring the Act into force by the proposed October date. The Cabinet Office has confirmed this is still its intent and regarded the 6 months’ notice it had previously promised as being met by the publication of the Regulations. Some of the future regulations, most significantly the commencement regulations, require some form of Parliamentary approval. In the case of a general election in October or November, there will be limited sitting days after Parliament returns from the summer recess before it must be dissolved. This may make it difficult to find Parliamentary time.