Procurement Law Reform - Let’s Start a Discussion

This is the fourth in our short series of bitesize feedback notes following on from DLA Piper’s Panel Discussion Webinar held on 1 July 2020 when we launched our paper – “Procurement Law Reform – Let’s Start a Discussion”. This feedback note looks at the panel’s response to the range of procurement procedures set out in the Public Contracts Act, 2015 (PCR’15), and asks the question does each serve a justifiable purpose, or could public purchasing benefit from rationalising the procedures, so that there are fewer choices, but more discretion for shaping purchasing techniques?

The Case for Reform of Procurement Procedures

Richard Bonnar, Partner DLA Piper, opened the debate, pointing out that whilst it is strategic procurements that make the headlines, the average value of a public contract is less then GBP100 thousand and less than a year long. So the procurement rules have to accommodate a vast range of contracts – from re-stocking pencils to infrastructure engineering feats such as HS2. But are they too complex, are there too many procedures, and does each sector – concessions, utilities, defence and public contracts – really need its own rules ? Could we - as Professor Sue Arrowsmith proposed in her paper “Re-imagining public procurement law after Brexit” – streamline cost effective and flexible procurement methods into one or two methods?

Robert Smith, Partner DLA Piper, agreed that with so many procurements being challenged through the courts, it does seem attractive to revisit the regulated procedures. Disproportionate time is often spent between lawyers and their clients discussing which procedure to use or how to structure it, so there has to be an argument for simplification. However, change will inevitably introduce risk and additional costs in the short term. For example changes to existing precedents and processes developed not only by the public sector, but also private sector bidding teams will need to be adjusted, so any change must be justified by the clarity and cost savings it would bring. With too much detail to take into account, there is more scope for being tripped up by the rules, but equally don’t throw the baby out with the bathwater! Some of the rules have evolved over time to address specific concerns around transparency and equal treatment of bidders. There is also substantial useful guidance in the form of PPNs (procurement policy notes issued by government) which would have to be revisited if the procedures are changed.

Richard was interested to pick up on the time and resource spent in the major projects space, on the vexed question of whether to follow the negotiated procedure or the competitive procedure with negotiation. Which is the better procedure?

Robert could definitely see a case for rationalising down to one form of negotiated procedure, because in reality, even within the same procedure it can be run in the same way - albeit tightly and efficiently or as a long-winded and expensive procedure. Having too much detail in PCR’15 can lead to people being tripped up by the rules. So, simplification together with appropriate guidance seems an appropriate way forward. In all of this however, it is worth remembering that legal challenge usually arises as a result of the complexity of what you are buying, rather than the complexity of the rules, so that for example, bidders will take issue with evaluation criteria and methodologies devised within a contracting authority’s discretion, rather than specific rules set out in PCR’15. Allied guidance is also required here.

Robert also promoted scoping public framework agreements so that they are readily available to contracting authorities, to ensure that (whatever you do to simplify the procurement rules), there is more opportunity for concentrating on what is being purchased, as opposed to structuring the purchasing process.

Looking at this from the perspective of contentious procurement, Fionnuala McCredie QC (Keating Chambers) agreed that the range of procurement procedures is legion, but cautioned that reform will inevitably cause uncertainty and should only be considered once stability returns to the UK economy post COVID-19 and Brexit. That said, Fionnuala’s experience is that there is a tendency to make procurement procedures more complex than is necessary and the Cabinet Authority’s “decision tree” sought to help with this, with a suggestion at one stage that Cabinet Office consent would be required for use of complex procedures - though this did not materialise. On balance Fionnuala favoured standardisation of a core set of principles, as a baseline for all procurements, but with derogations for specific sectors, such as concessions or defence.

Paul Stone, Litigation Partner at DLA Piper, agreed that as he watches procurement challenges evolve, there can be no doubt that there is a case for making individual procurement procedures work better. He highlighted, however, that all this must be considered in the context of how we engage nationally with the GPA (UN Government Procurement Agreement), once the UK leaves the European Union.

Where do we go from here?

Any process of reform must be based on evidence. We would be interested in your experience of where procurements have worked well, and where shared experiences from other contracting authorities could help to make procurements better. Have you been tripped up by the rules? For example, have you provided a comprehensive list of minimum requirements in a competitive procedure with negotiation, only to find that review of initial bids indicates that the authority could benefit from negotiating one of those requirements? Have you set out on an open procedure path, and been overwhelmed by responses such that your procurement team does not have the resources to evaluate all bids within the procurement timetable? Have you wondered why there could not be an open/restricted hybrid procedure which would enable down selection, if the contracting authority opted to do so and had made that option clear in the original contract notice? If we combined competitive dialogue, competitive procedure with negotiation and even the innovation partnerships procedure, what benefits would that drive?

If there is a chance to reform the procurement procedures, how can we do it well, and in a way which optimises cost and resources?

We look forward to continuing this debate with you.

Please contact Louise Huson or Paul Stone if you would like to discuss this area further.

Read other articles in the series