Procurement Act

By Dean Fazackerley, LHC Head of Procurement

Simplicity and flexibility are the key words that have been pushed by the Government when it comes to describing changes to the procedures of the Procurement Act 2023. Both have been areas which has spurred much discussion and debate since the early stages of the green paper.

This article take a deeper dive into the changes to the procurement procedures with a view from LHC on what it could mean for public procurement from October 2024, and beyond.

Before we look forward to the procedures in the new act, it is worth recapping the six procedures we have under the current regulations:

• Open
• Restricted
• Competitive with negotiation
• Competitive dialogue
• Innovation partnership
• Negotiated without notice

In reality, buyers will be largely familiar with the top two options, open and restricted, as they are the most popular procedures used under the current regulations. In its drive for simplicity and flexibility, the Procurement Act seeks to consolidate the existing procedures into just two options:

• The open procedure
• The competitive flexible procedure

Open procedure

There are no great changes here; the open procedure remains a one stage open market process. The retention of this process will be welcomed by many and remains a good option where deemed appropriate for the nature of the procurement and supplier market.

Competitive Flexible Procedure

The Competitive Flexible Procedure (CFP) is where it gets more interesting, and has been the topic of a lot of discussion to date. As set out in the act, the CFP is a ‘competitive tendering procedure as the contracting authority considers appropriate for the purpose of awarding the public contract’.

In plain English, the CFP is designed to give flexibility and freedom to buyers to design a competitive exercise that is bespoke to the needs of their specific contract and intended outcomes. Therefore, this may include multiple stages of shortlisting such as post-tender negotiation or clarification stages, best offer stages, auctions and factory or site visits to name a few. The act also sets out that contracting authorities will have greater freedom to refine the award criteria throughout subsequent stages of the process, again an interesting concept to explore to ensure best value is achieved at final award.

The increased flexibility will be welcomed by some who feel that the existing procedures with defined steps and processes only serve to hinder innovation and stifle competition. At LHC, we recognise and believe this argument has merit, however, the current procedures do provide a level of consistency for all parties involved.

For suppliers in particular, having defined processes gives comfort and a level of surety in the expectations and experience from one procurement to the next. Knowing broadly what to expect of the process and the conditions for participation helps suppliers with planning bid resources.

From discussions with our clients and suppliers, there are concerns that the lack of clear guidance and procedural rules will create a variety of approaches that could do the opposite of the intention, and create more complicated and protracted procedures. What is clear, is that contracting authorities will need to be very transparent about the process they are undertaking. Suppliers will need to read the documentation provided closely and be prepared to ask for clarity to ensure all parties are clear on the rules of engagement.

The new regime will provide the ability to think outside the box, not be driven by a process, but design the process around the need and the desired outcomes. This should be welcomed, as we all want to get the best result for all the hard work put in!

As buyers, we need to ensure a common sense approach is taken to ensure the tender process designed is proportional and practical, our documentation is clear and we follow the steps we set out to suppliers. Despite the red tape of the current regime being lifted, there is no harm in using the ‘traditional’ open or restricted process where it’s still applicable, this should be a case of adding complexity only where it’s warranted.

The training offering that has been promised will help with this understanding and transition; but at LHC we believe this will be a key area where we will all have to test, learn and adapt what works and what doesn’t.

As spiderman’s uncle once said, ‘with great power comes great responsibility….’. - sound advice if you ask us.