Procurement Pulse UK – June 2023

This is the Procurement Pulse, DLA Piper’s bulletin for clients with an interest in developments in public procurement law. In this issue we report on recent UK case-law, policy and legislative developments. We also provide an update on materials added to Global Government Contracting, our online platform which supports businesses to source and win new government contracting opportunities, and supports governments, and other regulated entities, to do business with the private sector.

 

Recent Court Judgments

English High Court Rules on Modification to Public Contract

James Waste Management LLP v Essex County Council

The English High Court has recently considered whether a contracting authority’s modification to an existing waste management services contract was a “substantial modification” which required a new procurement process in terms of the Public Contracts Regulations 2015. The judge held that the modifications did not amount to a “substantial modification” and therefore did not require a new procedure because they did not:

• render the contract materially different to the one concluded,
• change the economic balance of the contract in favour of the supplier, and
• introduce conditions which, had they been part of the initial procurement would have allowed for the acceptance of a tender other than that originally accepted.

In reaching its judgment the court made two points of general application in such cases:

• the circumstances in which a contract modification may be permitted should be construed narrowly, and
• a claimant alleging an illegal modification should prove it; it is not for the contracting authority to demonstrate that no unlawful modification has occurred.

The judgment is a useful addition to the small body of UK case-law on modification of contracts and will be of interest to contracting authorities and suppliers.

Scottish Court of Session Considers Claim of Non-compliant Tender

Capita Business Services Ltd v Common Services Agency for the Scottish Health Service

In this case Capita claimed that NHS National Services Scotland unfairly rejected its bid for a contract to provide IT services to the Scottish health service. The Court of Session found that NHS National Services Scotland was entitled to disqualify Capita from the process as they had submitted a materially incomplete bid. It held that the tender documentation was clear and unambiguous and that a "reasonably well-informed and normally diligent tenderer" would have understood that a fully priced final bid, not one which included a pricing assumption, was required. For contracting authorities, the judgment highlights the importance of having clear and accurate information in the bid documents and for bidders it demonstrates the dangers of relying on an unconfirmed interpretation of instructions when preparing a response.

 

Policy, Guidance and Other Developments

Procurement Bill Progress

The Bill had its report stage and third reading in the House of Commons on 13 June 2023. The Bill was passed with amendments and is now with the House of Lords for further consideration. It is expected that there will now be a short period whereby amendments will be reconciled between the House of Lords and Commons before the Bill is passed. It is anticipated that the legislative process will be completed before the UK Parliament’s summer recess on 20 July 2023. UK Government announcements currently suggest that the new procurement regime will not go live before October 2024.

Various publications relating to the Bill have been issued including:

• House of Commons Amendments
• UK Government announcement on new national security amendments.
• A Cabinet Office Consultation on draft regulations to implement the Procurement Bill, which is open for comment until 28 July 2023.
• House of Commons Library Briefing on the Progress of the Bill
• Legislative Consent Motions from the Scottish Parliament and Senedd Cymru.

We have published articles discussing the progress of the Bill here and the new national security provisions within the Bill here. We will also shortly launch a UK public procurement reform webpage which will collate expert analysis on the new procurement regime, commentary on developments and key materials and resources.

Free Trade Agreements Implemented in Procurement Legislation

Free trade arrangements agreed by the UK and, separately, Australia and New Zealand have been implemented with consequential amendments being made to the current procurement regulations. This has been achieved by the:

• Public Procurement (International Trade Agreements) (Amendment) (Wales) Regulations 2023 which came into force on 26 May 2023.
• Public Procurement (International Trade Agreements) (Amendment) Regulations 2023 which came into force on 25 May 2023; and
• Public Procurement (Miscellaneous Amendments) (Scotland) Regulations 2023 which came into force on 30 May 2023

The main changes which arise are that the use of Prior Information Notices is removed and the procedure for calculating the value of lots and procurements is altered.

New Procurement Policy Notes

Several new procurement policy notes have been issued by the UK, Scottish and Welsh Governments:

• PPN 05/23, SPPN 01/23 and WPPN 02/23 setting out changes to public procurement obligations arising out of the UK’s new Free Trade Agreements with Australia & New Zealand.
• PPN 03/23 updating the Selection Questionnaire and accompanying statutory guidance.
• PPN 04/23 providing updated guidance on how to create a level playing field for UK steel producers through public procurement.
• SPPN 02/23 detailing how a public body should notify Scottish Ministers of the publication of their annual procurement report covering the financial years 2022 to 2023 and 2023 to 2024.

Wales: Royal Assent for Social Partnership and Public Procurement (Wales) Act

The Welsh Government have issued a statement confirming that the Social Partnership and Public Procurement (Wales) Act has received Royal Assent. The Act makes provision for the establishment of a statutory Social Partnership Council for Wales and creates a duty for socially responsible public procurement. The Act will come into force on a future date to be determined by Welsh Ministers.

Wales: Health Service Procurement (Wales) Bill

The Health Service Procurement (Wales) Bill was introduced to the Welsh Parliament on 13 February 2023 and is now at stage 3 of the Welsh parliamentary process. The Bill provides a legislative basis for bringing forward subordinate legislation to enable the introduction of a bespoke procurement regime which will apply to Welsh NHS health services.

EU: European Commission Launches Survey on e-invoicing in Public Procurement

The European Commission is conducting a survey in the context of an evaluation of Directive 2014/55/EU on electronic invoicing in public procurement. The survey is open until 30 June 2023 and can be accessed at this link.

Global Government Contracting Online: New Materials

DLA Piper has recently launched Global Government Contracting Online. The platform contains information about how to find procurement opportunities in 77 countries across Africa, Asia-Pacific, Europe and the Americas, the structure and content of their procurement laws and key in-country resources and publications. We have recently uploaded new country procurement information from Canada and Pakistan to the platform, an article about the PPP Legal Framework in Botswana and spotlight interviews with Sun-Min Kim, Country Cooperations Algeria & India, International PtX Hub and Dennis Rach, Negotiation Support Advisor, CONNEX.

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