Procurement Act 2023 – where are we now? Part 2
28 May 2024
We are very much into the countdown of the Procurement Act 2023 coming into force, which the Government has announced will “go live” on 28 October 2024. Various guidance documents have been released by the Government and we expect to have a full set by the end of June, with more e-learning modules becoming available. In our second article we look at the notice requirements under the Procurement Act 2023 and the accompanying guidance that has been published.
Procurement – published guidance and notices to be served under the Procurement Act 2023
We have prepared a table of notices here but some key matters found in the Government guidance published on notices to date are set out below.
- A contracting authority is required to publish a pipeline notice on the central digital platform where it considers that it will, in the coming financial year, pay more than £100 million under relevant contracts (contracts over £2m threshold) (Section 93 Procurement Act 2023 (PA23)). The first procurement pipeline notice will need to be served within 56 days of April 1 2025 (26 May 2025) and by 26 May in subsequent years. Contracting Authorities are being encouraged to update their pipeline notice throughout the year.
- A planned procurement notice is an optional notice published at the pre-procurement stage and is similar to a PIN and periodic indicative notice (Section 15 PA23). This notice cannot be used as a call for competition, but rather reduces the time period for the submission of tenders in certain circumstances. It may be published before or after a pipeline notice or a preliminary market engagement notice.
- S16/17 of the PA23 sets out requirements for a preliminary market engagement notice to be served. Permitted preliminary market engagement is listed at section 16(1) and the definitions apply whether engagement is considered to be “formal” or “informal”. There is no requirement to conduct preliminary market engagement, but where preliminary market engagement under section 16 PA23 is carried out, then a section 17 PA23 preliminary market engagement notice (PME Notice) must be published before the Contracting Authority publishes a tender notice, or provides reasons for not doing so in the tender notice. The PA23 prescribes no minimum time limits, but the guidance suggests that timescales for a response will need to be reasonable and proportionate. Where a PME Notice is published, but does not proceed to procurement, there is no need to publish a Procurement Termination Notice.
Procurement Act guidance – pipeline notices
- A pipeline notice must be published on the central digital platform by a contracting authority where it considers that it will, in the coming financial year, pay more than £100 million under relevant contracts.
- To calculate whether the £100 million threshold has been exceeded, the following must be included:
- all payments made under contracts for the supply of goods services and works (other than excluded contracts);
- below-threshold contracts and contracts that it awards under frameworks and dynamic markets; and
- payments due in the coming financial year under existing and future contracts.
- The pipeline notice must include details of each proposed public contract over the £2million threshold.
- The deadline for the first procurement pipeline notice will be the 26th May 2025 and by the 26th May in subsequent years.
- The guidance acknowledges that the pipeline notice is a snapshot at the time of publication and a Contracting Authority will not be held to it. The guidance recommends that authorities update their pipeline notice from time to time, although this is not a statutory requirement.
- The guidance encourages contracting authorities to go further than the requirements of the PA23 and include in their pipeline notice:
- works contracts over £2 million but below the works threshold;
- contracts over £2 million where publication of a tender/transparency notice is not required;
- contract valued under £2 million where they would be suitable for SMEs; and
- relevant contracts with a term longer than 18 months.
- Where a contract listed in the pipeline notice does not proceed to a formal procurement process, the guidance suggests best practice would be to publish a procurement termination notice linked back to the unique identifier for that contract originally set out in the pipeline notice.
Procurement Act guidance – planned procurement notices
- Section 15 of the Procurement Act (PA23) deals with planned procurement notices. They are optional notices, which are published by the contracting authority at the pre-procurement stage.
- The planned procurement notice replaces prior information notices (PINs) and when used, must be published on the central digital platform.
- If a planned procurement notice is published at least 40 days and no longer than one year before publication of the tender notice, a contracting authority can reduce the tendering period to a period of 10 days.
- Where a contracting authority considers that its procurement, at the tender stage, no longer reflects what it set out in its qualifying planned procurement notice, then it would not be appropriate to reduce the tendering period. The guidance confirms that where there is a potential for a wider/different field of suppliers or if timings have changed from the planned procurement notice, i.e. commencing the procurement earlier than as detailed in the planned procurement notice, then the minimum timescales should not be reduced.
- Contracting authorities are required to provide as much information relating to the tender notice as is available at the time of publishing the planned procurement notice and can revise their notice to make additional information available.
- If the contracting authority decides not to proceed with a procurement following the publication of planned procurement notice, the guidance states that good practice would be to publish a procurement termination notice.
Procurement Act guidance – preliminary engagement notices
- Section 16 and Section 17 of the Procurement Act 2023 (PA23) include a provision for contracting authorities to publish a preliminary market engagement notice (PME Notice) to invite suppliers to participate in preliminary market engagement, which takes place before the publication of a tender or transparency notice.
- There is no requirement to conduct preliminary market engagement under the Act. But if an authority wishes to do so, it must publish a PME Notice or (in limited case) provide a justification in the tender notice why it did not do so, which will be open to scrutiny. A supplier will also be able to raise concerns around PME with the Procurement Review Unit.
- Section 16(1) lists the permitted purposes of engagement, which are broad in nature. It should be noted that not every engagement involving contracting authorities will be for the purpose of 16(1). Whether or not the contracting authority consider the engagement to be “formal or “informal”, if its purpose is defined in section 16(1) of the PA23 it should be treated as preliminary market engagement for the purposes of the PA23.
- The guidance suggests that preliminary market engagement will be commenced by way of a PME Notice in the majority or cases suggesting that at least initially the whole market will be able to respond to the exercise. However, guidance acknowledges that a “reduction of numbers” mechanism may be included, as an authority may not be able to deal with all respondents that might express an interest in the PME.
- The guidance provides that it is acceptable to hold PME events aimed specifically at SMEs, provided that the procurement does not give those suppliers, who attended the focussed engagement, an unfair advantage over other suppliers.
- The guidance confirms that the PA23 does not include any timescales around PME Notices but provides that the contracting authority will need to consider its duties under section 12 so sufficient time periods should be allowed when setting timescales for responses to the PME.
- The conflicts of interest obligations in the PA23 are relevant when considering preliminary market engagement. Before publishing a tender or transparency notice, the contracting authority must prepare a conflicts assessment to identify possible conflicts of interest and indicating how these have been addressed.
- If the contracting authority has not conducted any preliminary market engagement, there is no requirement under the Act to publish the reason for not doing so in the tender notice.
Sectors
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at May 2024.