Exploring the impact of The Procurement Act

Billed by the Government as “one of the largest shake ups to procurement rules in the country’s history” the new Procurement Regulations will come into force in October. Echelon Group CEO Mathew Baxter covers some of the key points in the first of a series of blogs focusing on the new legislative landscape.

The Echelon Group, like most organisations in the sector, has closely followed the progress of the Procurement Bill as it’s gone through the Houses of Parliament and Lords, gaining Royal Assent in October last year to become an Act of Parliament.

The new rules, which aim to simplify procurement and open up opportunities to SMEs, come into force in October this year.

There has been much analysis of the implications of the regulations and there are many questions still to be answered, with further guidance on the Act to be issued by Government over the next six months.

Whilst the focus for many has been on the introduction of the new Competitive Flexible Procedure (CFP) which replaces the existing Restricted, Competitive Dialogue and Competitive Procedure with Negotiation, it’s clear that there’s going to be a huge onus on Contracting Authorities to report information following the award of contracts.
In the current regulations (PCR 2015) the focus is very much on the procurement process up to and including contract award. However, the new Act includes a plethora of new requirements for Contracting Authorities to provide ongoing information on all public contracts above a certain value.

These include:

Preliminary Market Engagement Notice, which will be required to alert all potential bidders of any market engagement process being adopted and details of how to engage.
Pipeline Notice, which requires all Contracting Authorities with a spend of over £100m per annum to provide forward notice on all contracts being procured with a value of over £2m.
Payments Compliance Notice, which is a six- month reporting period, setting out payments to suppliers noting that all payments must be less than 30 days.
Contract Performance Notice, which will require all contracts over £5m to have three KPIs reported at least once a year, and also on termination of the contract.
Contract Change Notice for any contracts with an increase or decrease of more than 10% for services and 15% for works.
Contract Termination Notice for ALL contracts that are terminated, regardless of the reason.

It’s clear that this these additional notices are going to require careful consideration by Contracting Authorities to ensure compliance with the new Procurement Act and Echelon Consultancy will be working with the sector to develop processes and templates to support these new requirements.

We are also developing a bespoke approach to the Competitive Flexible Procedure which will be covered in a future article.