Transforming Public Procurement – Government, Public Sector

The recently published Green Paper on transforming public
procurement sets out how the government aims to speed up and
simplify procurement processes in the UK. Alison Richards discusses
the key elements of the Green Paper and highlight the practical
implications that the changes may have on running procurement
processes. Robert Breedon looks at the procurement law implications
of the EU-UK Trade and Cooperation Agreement and its implementation
of the WTO‘s
Agreement on Government Procurement (GPA).

Transcript

Michael Luckman: Good morning and
welcome to the third webinar in our spring ThinkHouse Public Sector
programme. This one on procurement follows on from our devolution
and Freeport specials, and if you would like recordings on either
of those sessions please do just contact us. And just to flag up
too that next Thursday we will be running a ThinkHouse with
MindApples which is an organisation which specialises in
mindfulness, a useful technique that we might want to use to relax
and enhance our performance or if we are struggling to cope with
the stresses and strains of lockdown, loneliness or home
schooling.

It is fair to say that when we ran our spring ThinkHouse
programme last year it was our first fully on-line programme and
although well received we actually did not think it would become a
habit one year later. Some things have changed, I do not need to
show the fire escapes any more or to tell you to turn your mobile
phones off. But there is some housekeeping. This is a curated
webinar, we will be taking questions along the way and afterwards.
If you have a question, please raise it with me directly using the
Q&A button which you can find at the bottom of your screen and
I shall marshal the questions accordingly. The session is in two
halves so it is likely you will have some questions half way
through. However, some things do remain the same. We do aim to
deliver our loyal audience with high quality speakers covering a
mixed diet of both regular catch ups and interesting topical
subjects that we think impact on your day to day needs or are
useful in providing you with wider context of significant legal
trends.

So as I say, today’s session is on procurement. It is
divided into two halves and first we will look at procurement law
as it currently applies in the UK; that is following our exist from
the European Union. To what extent have the rules really changed
and what is the impact of our joining of the World Trade
Organisations’ agreement on government procurement? After that
we will look at the government’s recently published proposals
for reform of procurement law. The government is currently
consulting on its proposed reforms and is hoping to simplify
procurement rules and offer greater flexibility.

I would like to introduce you now to our first speaker who is
Alison Richards who will give us an overview of the current
post-Brexit procurement landscape. Alison is a very senior and
experienced lawyer in our commercial and projects practice. As a
law firm we are members of the government’s major projects
panel and Alison has had significant experience on advising on
large central government projects most recently in the role out of
COVID-19 testing kits and she regularly advises on public
procurement issues. Alison.

Alison Richards: Thank you Michael.
Yes, so as Michael says, I am going to have a quick look at what
the current procurement regime looks like in our post-Brexit era
and the extent to which things have or have not changed.

So as you are all aware, on 31 December 2020, the EU / UK
transition period ended and on 24 December only a week prior to
exit the UK and EU reached agreement as to what the trade
arrangements will look like under the post-Brexit regime. Those
arrangements are set out in the UK / EU Trade and Co-operation
Agreement or TCA. And
within Part 2, Title 6 of the TCA along
with the annex which is PPROC1, it sets out actually what that
means in terms of procurement arrangements. Notably the
arrangements expressly incorporate the World Trade Organisation
General Procurement Agreement provisions or GPA. So in terms of
applicable procurement law we now need to look at the World Trade
Organisation General Procurement Agreement, the regulations as we
know them so PCR the utilities concessions and defence and security
regulations and of course the guidance – I will say a little more
about some of the guidance that has been issued and no doubt, as
things start bedding down we will expect to see some further
guidance. But that is not everything because the government is of
course considering changes to the UK procurement regime and Robert
is going to let you have a bit more detail about what is going on
and what is in the spotlight in the second part of the session.

So before I leave the detail of the TCA
entirely, I thought it would be useful just to share how the TCA deals
with EU / UK procurement after Brexit. Again, I have referred a
couple of times to Part 2, Title 6. The document is a huge document
so for those of you that are interested in having a look, if you
skip straight to page 148, that is where the 19 Articles start and
you can take a look in your own time. So the topics of the Articles
look familiar just looking down the list and these are the first
ten on this slide, you will note the themes closely follow the
principles previously set out in the directives and indeed covered
under the procurement regulations. There are very few differences
but what I would say is the provisions are not prescriptive, it
leaves the detail to be panned out in local regulation. So for
example, under PPR03 which talks about the use of electronic means
of procurement, rather than going into the mandatory text that you
see in the regulations, it requires electronic tendering to be used
to the widest extent possible. And in PPR08 regarding selective
tendering, the UK has agreed to ensure there is sufficient bids to
ensure genuine competition without affecting the operational
effectiveness of the procurement system. How would we go about that
is left for the UK to decide but of course, in the current
regulations, we know that for a different procure is sort of
mandates that you need a minimum number of bidders for different
procedures. But it does perhaps give some scope of flexibility for
change in the future.

Just looking at the next slide which lists the remaining
Articles. And again, under PPROC11 the domestic review procedures,
this requires each party is to adopt measures to protect the
interest of potential suppliers including for example through
standstill procedures or allowing for corrective actions where
there is a breach of the rules set down. But again, very light
tough and the detail is left for domestic regulation. So although
fairly high level, the reality though is that the EU and the UK
remain bound by the requirements of the GPA. So let us have a quick
look at what the World Trade Organisation requires in terms of the
procurement agreement.

So in terms of the structure of the agreement, there is 21
parties to the agreement and that consists of some 35 members and
although the UK is now a member in its own right, that is little
change because of course we were previously a member but that was
through our membership of the EU. So the first part is the text of
the agreement and it applies to all parties and it includes
obligations around open, fair, transparent conditions competition
and that has to be ensured across government procurement. And then
when you go to the activities covered by entities listed, so that
is our equivalent of contracting authorities, they are caught in
relation to purchasing the goods and services that are listed in
the GPA and when they are above the thresholds covered by the
agreement.

Part 2 of the GPA is party specific so there is a UK specific
part and it basically lists the entities that are caught within our
part of the agreement so our contracting authorities and lists the
goods and services as well as our thresholds, any exceptions to
compliance and requiring all suppliers to be treated equally and
fairly through competition and that of course mirrors what we are
used to seeing. The GPA is administered by the committee on
government procurement although really the enforcement is via
domestic law. There is a World Trade Organisation dispute mechanism
but it has been very rarely used in particular in relation to
procurement so our own mechanism continues to apply.

This looks at how the UK has implemented the terms set out in
both the GPA and the TCA and
that of course is via the regulations that we know and love. So we
have now implemented the public procurement amendment regulations
2020, again there is a link there, and that revises the existing
regulations. But the effect of the changes that have been made are
to sort of make fixes, so it fixes the regulations by reflecting
the UK’s departure by removing references to the EC. It is
fixed references to the EU, there are still some remaining where
there is a comparison but to the extent it can, it has removed
those. It also refers to the new Find A Tender service rather than
OJEU
advertising and again I will come back to that because there has
been some further guidance around that. And importantly it also
confirms that the existing ECJ case law continues to bind our
courts until it is overturned and that will be either through
further legislation or through further case law that overturns
previous decisions. And it also confirms that the GPA is the basis
for access for EU based economic operators.

So the next slide deals with the transition arrangements and the
amendment regulations provide that, for all procurements commenced
prior to 31 December 2020, they continue to be governed by the EU
Directives. Also noting that e‑certis continues to be
accessible for nine months and requirements for reports to be made
to the European Commission have been removed and replaced instead
with requirements for notifications to be made via the
e‑notification service.

Other changes applied a little bit more clarity around the
thresholds that apply. So if we pop onto the next slide we can look
at the thresholds. They have not changed although regulation 5 has
been simplified so, rather than referring to the directives and to
Euros, the regulations now expressly state what the thresholds are
in Sterling values and they are set out on the slides, I do not
intend to go through those. But safe to say that the Cabinet Office
going forward is going to be responsible for reviewing and
re-valuing those financial thresholds but of course that does not
mean there is freedom for all because of course they do still need
to align with the GPA thresholds. And we also understand that the
first review is due in January 2022 so no doubt towards the end of
this year we should be getting notifications letting us know what
those thresholds are going to look like.

So then I would like to start looking at some of the guidance
that is out there. There has been a few recent procurement policy
notes. The first that I will mention is 10/20. They have addressed
the changes to the procurement regime post-Brexit and it confirms
really much of what I have said this morning around the GPA and
treating suppliers fairly and the supplier access to other markets
under the Government Procurement Agreement. It also contains some
useful guidance in the form of frequently asked questions. And you
might want to take a look at that so it goes through maybe eight or
nine pages. There are some useful snippets in there.

So the next one, I have mentioned briefly already, is PPN 08/20
which is the Find A Tender guidance. So this is a new service, so
it confirms for all procurement launched after 31 December,
contracting authorities are required to publish your notices on
Find A Tender rather than through OJEU but
where a procurement was launched prior to 31 December you still
need to continue to publish your notices on OJEU and that
includes your contract award notice plus your amendment notices,
any core agenda, etc.

We have had a little bit of a chat with clients to see what
their recent experience has been of that service and understandably
the look and feel of the Find A Tender service is very similar to
the OJEU/TED
service but you do need to pre-register and you might therefore
want to consider doing so earlier so that at the point at which you
are ready to start placing new notices, then you have not got the
hassle of having to register in that way. That said, we do
understand as well that the transitions have been very seamless,
the system is working wonderfully and no issues to report which is
all great considering it has only been up and running for a very
short time.

The PPN also confirms that for contracts awarded under
frameworks or dynamic purchasing systems, again, if they were
launched prior to 31 December, the old regime applies and they
continue to be caught under OJEU so that
continues and that includes and extends to call off agreements and
contracts awarded under dynamic purchasing systems. If they were
launched after of course, you are home and dry so you just stick
with the Find A Tender service.

Another couple of things that I have picked up from some of the
guidance is, there is a request that, even if you are required to
advertise under OJEU, there
is a request that you also advertise through the Find A Tender
service so that there is only a single portal for UK suppliers. And
I also picked up that you still need to continue with contracts
finder and there is not a link between the Find A Tender and
contract finder at the moment.

So I would like to just mention PPA 11/20. Now it is not
directly related to what we have been talking about this morning
which is what the regulations look like because it deals with below
threshold procurements but it is relevant because it deals with the
rules around reserving contracts and allowing contracting
authorities to reserve for example SMEs or by specific locations.
But it is quite clear that contracting authorities cannot reserve
procurements for suppliers in the UK or England, Scotland, Wales or
Northern Ireland and it also prohibits reserving contracts if there
is a cross-border interest. So this makes it clear that the EU
should not be discouraged from participating in UK procurement and
that is consistent with GPA obligations that apply to any other
parties through the GPA. That message is also reinforced it note in
the, I mentioned the frequently asked questions to PPN 10/20, there
is a question around that and that confirms we cannot treat Europe
any differently to previously.

So that is all I wanted to say about what the regime looks like
now, so I will hand back to Michael. Thank you.

Michael: Thank you Alison. We have a couple of
questions for you. This one is from Fiona who has been advised
that, when referencing what is going on in tender that she should
use the PCR 2015 reference, the public contracts regulation 2015
reference. I am just wondering whether instead it ought to be a
reference to the amendments, the amended version as opposed to the
2015 version.

Alison: Yes, so the regulations are still valid
and it is not wrong to say 2015. As lawyers we tend to take a belt
and braces approach and put “as amended” afterwards and I
do not think that would be wrong either. So, yes, going forward
perhaps that is the takeaway as we say 2015 as amended.

Michael:  OK, and there is a question here
also around future EU decisions which is, how influential do we
think that future EU procurement decisions will be both on UK
practice but also on World Trade Organisation practice.

Alison: I cannot see that they will be anything
other than influential. So as I said a short while ago, the
European case law will continue to apply until the point at which
it is overwritten by something or by new law or by new case law. I
cannot see that the courts would just disregard any of the rules
that persisted prior to our exit until we have substantially
different regulations.

Michael: OK, two more questions and then I
think we will go into the next session although we can pick up
other questions on this session after that as well. A question here
around the Scottish public procurement regulations obviously which
I know you understand in great detail Alison. Do the amendments
apply to those as well do we know?

Alison: There are separate regulations for
Scotland. Hands up I did not look to see whether the amendment
regulations amend those too. I would have to take that away but I
am happy to come back on that.

Michael: Yes we have just got another question
come in on Scotland so maybe we ought to do a little bit of BAD
after the event on that. And just whilst we have got the last slide
up, just a question as to what is the difference between one and
three on the last slide?

Alison: Yes of course. What the PPN says is
that, if you have got a region of the UK, so there is an example in
Birmingham if there is a big event taking place, you might want to
reserve certain services for a particular market because of the
nature of the service. So it would be fine to ring-fence the
procurement as long as there is no cross-border interest in those
circumstances but you could not say only UK or England suppliers
could apply.

Michael: OK. I think Robert, if I may, I will
take this last question because it links in nicely with the fact
that we are looking backwards not forwards here. Where if anywhere
are the old treaty principles captured for those matters that are
below the threshold tenders?

Alison: The below thresholds are obviously not
caught by the regulations except of course they continue to be
bound by the principles around equal treatment. They are now
embedded into the regulations. They reflect the World Trade
Organisation requirements which is, that will be why they were in
there in the first place, so again, it is one of those examples of
where we have had European procurement regulations previously,
actually they will reflect our position either previously
collectively and now on our own as a member of the World Trade
Organisation General Procurement Agreement. So that is “as
is”.

Michael: OK. Thank you very much. So we have
now got our feel for the current landscape. So probably now is the
time to, why stand still, let us look forward to the
government’s proposals for future reform. And the government
has recently published a Green Paper called “Transforming
Public Procurement” and Robert Breedon is going to examine its
key proposals. It talks about obviously, every pipe dream,
simplification and speed, a sunny bureaucracy-free upland
unleashing procurements potential, is probably how it is snappily
phrased. And talking of sunny, Robert is head of our commercial
practice and he co-leads with me our government sector team and
heads our public procurement group. He has significant experience
of advising a wide range of government clients on procurement and
commercial issues and his experience includes working actually for
quite some time a number of years as legal counsel for central
government unit. He will also be sitting on a panel alongside Lord
Agnew on the next Whitehall and Industry Group meeting on 11 March
and the topic there is procurement after Brexit and we are very
pleased to be sponsoring that event. Lord Agnew’s team is
actually the team that produced the Green Paper that we are looking
at this morning and if you would like details and would like to get
involved with that, please either contact us or contact Whitehall
and Industry Group for further information. Robert, so what is
coming down the tracks?

Robert
Breedon: Thank you Michael. So just to set out the
structure of the next twenty minutes or so. We are just going to
look at the background to the Paper and the proposed timetable and
you will be pleased to know we are still in time, it is still
possible for you to contribute to the debate around the proposals
in the Green Paper. And then looking into the Paper itself, we have
separated it into two halves really, the process changes, those
changes that are proposed around the procedures that we will follow
and the regulations and then secondly the important area of
litigation and remedies. The UK has the dubious distinction of
being the second slowest and second most expensive system in the EU
when it comes to bringing procurement law challenges. I have not
actually been able to find out who is the most expensive and the
slowest but it is not a good place to be, and there are some good
examples from around Europe as to how that might be improved.

So if we look first then just at the background to this. Without
wanting to re-open all of the debates around Brexit and the wish to
leave Europe, it is quite clear that the government, seeing itself
free from the shackles and constraints of EU regulation, wanted to
overhaul really the UK public procurement regime. The Prime
Minister, back in 2019, talked about building a very large bonfire
of the red tape that comes out from EU procurement regulations. So
some reasonably strong language coming out of that and it flows
through into the Green Paper. So there is an extract from the
forward there from Lord Agnew. “For too long, modern and
innovative approaches to public procurement have been bogged down
in in bureaucratic process driven procedures. We need to abandon
these complicated and stifling rules and unleash the potential of
public procurement so that commercial teams can tailor their
procedures to meet the needs of the market.” Not often that
you hear public procurement and unleashing potential in the same
sentence. But there we are, that is a view of the desire and the
appetite and the frustration I suppose that some feel with the EU
regulatory backdrop. So the aim is there are the second bullet
point. Simplification; greater flexibility; an important principle
that we will dwell on later around transparency; a slightly
different approach to value for money so, rather than just being
quality and price, we are looking to broaden that and to bring into
play other factors such as social value and environmental issues;
and as we have mentioned faster and cheaper procedures for bringing
challenges and, in relation to remedies, a much greater focus on
pre-contractual remedies. So that is the landscape.

So the paper was issues as we have said there, December 2020.
The consultation is still open and we have the ability to respond
by 10 March. We will certainly be responding as a firm. I know some
of our clients who are on the webinar this morning are also pulling
together some of their thoughts and we would be happy if anyone
wants to feed into that to reflect your views as part of our own
response.

The Paper is to some extent quite high level. There are areas
where, as procurement lawyers we are itching to get into the
detail, what will the regulation say, and I understand why that is
the case at this stage. In a couple of areas it makes constructive
feedback on the proposals a bit difficult because you just want to
see the details. So we will bear that in mind as we go through.

And the other key factor, of course, is as Alison has just
outlined… notwithstanding our desire to radically reform
procurement rules we still have to operate within the constraints
of the World Trade Organisations GPA. And, of course, at the heart
of the GPA is the fundamental principles that opportunities should
be advertised, bidders should not be discriminated against, you
need to follow a fair and transparent process. So, within that
context the Government is looking at what it can do around
flexibility and speed.

Some of the proposals are quite bold, particularly around
streamlining the process and more transparency. So we are now going
to look at the first of the process changes. So the first real
change is that the Government is proposing to rationalise and
clarify the sets of different rules that we have in place at the
moment. So, as you all know we currently have the public contracts
regulations, we have got the utilities regulations, the concession
contracts and the defence and security regulations. To some extent
they are broadly similar, but there are sufficient numbers of
differences that each time you come to look at the regulations. You
cannot make any assumptions for example that the UCR matches the
PCR. So, it does entail a little bit of check and references across
and what is being proposed is that we will merge all those into a
single set of regulations and the intention is to lift some of the
greater flexibilities that we currently have under the utilities
and the concession regulations.

Now, they do not go into specifics but to give you an example of
a greater flexibility under the utilities regulations, when we get
asked to advise on contract modifications, which is one of the most
common questions that we get asked on under the PCR. Some of the
safe harbours for making modifications are subject to a 50%
threshold, so you cannot increase by more than 50% of the contract
value. You do not have that in the utilities regulations so that
might be an example where Government is talking about greater
flexibilities offered by those regulations.

What the Paper also then says, but there will be specific parts
of these new regulations that apply to the particular sectors, so
defence and utilities. And, I suppose critics of this have said
that it is all well and good having one set of regulations but you
the supplement it, albeit within the same document, by particular
provisions dealing with defence and utilities. So is it really that
simplified?  And, until we see the detail we will not really
know. But, at least we will have just one place to go in terms of
looking for the relevant provisions and some of the process and
sort of operational matters will hopefully be more consistent
across all of those sectors.

So, that is the first of the process changes. The next slide
just picks up on a proposed change around the types of procedure
that will be proposed. So, at the moment, you will be familiar that
we have the open procedure, restricted procedure, for more complex
arrangements we have competitive procedure with negotiation,
competitive dialogue and we have got the innovation partnership
procedure. So lots of different procedures.

The proposal going forward is that we simplify that and
essentially we will have two procedures for competitive procedures.
The first of those is the open procedure, much as it is today it is
going to be used for simpler off the shelf competitions. The sort
of one stage process where you invite proposals against a
requirement and some contractual terms. You evaluate the bits and
you award the contract. The the main change in procedures is the
new procedure called the competitive flexible procedure and that
will replace the restrictive, the dialogue and the competitive
procedure with negotiation going forward.

And the key feature of this procedure, it is very similar to the
light touch regime and so contracting authorities will be given
greater discretion on how they run the procurement. And those of
you who are familiar with the light touch regime – I think will
probably welcome this proposal. We do a lot of work in, for
example, the health and care sector and the educational sector
where they use the light touch regime.

And I think it is quite helpful to be given that greater
flexibility and, at its simplest, what the light touch regime says
is that opportunities should be advertised. The procedure that you
are going to follow and the criteria that you are going to use must
be set out in the documentation. Having set it out in the
documentation, you must do what you say you were going to do. You
need to comply with the underlying principles of fairness,
transparency and non‑discrimination and any time limits in
the procedures should be reasonable.

So that is sort of high level fair process but, within that,
much greater flexibility is to how you might run the procurements.
So if, for example, you feel you want the ability to negotiate at
different stages, to step down the number of bidders – all of that
is into the melting pot, so much greater flexibility and free from
the constraints that we sometimes feel frustrated with. For
example, no ability to negotiate under the restricted procedure and
subtle differences between competitive dialogue and the competitive
procedure with negotiations so all of those challenges get removed.
So that is the key one to look out for going forward.

The third area on this side in terms of process is what they are
now calling the Limited Tendering Procedure essentially this is the
direct award ground. The limiting tendering procedure is the
language that comes out from the GPA and what the paper says it is
largely going to mirror the existing grounds in Regulation 32 so
there is only one supplier out there or for protection of
intellectual property rights extreme urgency and there is a new
ground to be used in cases of crises and so this is very clearly
arisen from the events of the last 12 months and the challenges
that the public sector has faced in dealing with the pandemic and
the need to just get on and award short term contracts to be able
to deal with the particular crises that we are facing and so the
papers says that government reserves the right to declare a crises
which would then free up the ability to use the direct procedures.
If they are on a local level then a local crises then the local
contracting authorities can apply to the Cabinet Office to say can
you declare a local crises which then free up this ground under the
proposed rules.

A word on crises and this will come out in the slides when we
send we send them out to you. It is proposed that this would be an
event which clearly exceeds the dimension of harmful events in
everyday life and which substantially endangers or restricts the
life or health of people or where measures are required to protect
public morals, order or safety or finally where measures are
required to protect human, animal or plant life or health so crises
could be triggered it would be declared and that would open up the
ability for contracting authorities to use this particular
procedure for direct awards.

If we go on to the next slide then we have another of the
process changes around what the green paper calls Purchasing Tools
and here they look at dynamic purchasing systems under frameworks.
Of all the areas in the green paper this is the one that is the
hardest to follow and indeed Sue Arrowsmith procurement expert
describes this section as having a lack of clarity and reasoning on
these recurring purchasing mechanisms and that she says makes
meaningful consultation in this area a bit difficult. I think I
share that because I have read it a couple of times and it is not
entirely well developed but the proposal is that we would have a
DPS system Dynamic Purchasing System Plus as they are calling it to
replace the current DPS. It would have no maximum duration but the
duration would need to be set out in the procurement documents. It
is a live system, it is dynamic in that sense and suppliers can
apply to join at any time and unlike the current arrangement where
you are limited to common goods and services sort of commodity type
products it could be opened up to a much broader range of
services.

What is not entirely clear from the green paper is how you come
to call off from the DPS and the proposals in the green paper talk
about well having got onto the DPS the way the contracting
authority would then work would then be to use the competitive
flexible procedure to invite all suppliers on the DPS to put
forward proposals now that does not feel at first sight like a
streamlining of the DPS arrangements that we currently have so it
feels like a sort of accredited list and then you go to all of them
with this competitive flexible procedure so I think there is a bit
more thinking needed around that.

In relation to frameworks some proposals here probably not a
significant change in what we have currently got. The main change
here is that for some frameworks the current restriction of four
years in terms of duration can be extended. You can go to up to
eight years and if you do that you have to open up the framework.
Now that is not an always open issue a bit like the live DPS model
it is a framework whereby at points in time you would open up the
ability for other suppliers to apply to join the framework or
indeed existing suppliers on the framework to refresh their
proposals in terms of pricing. So the longer a proposal for longer
frameworks with the opportunity to reopen the ability to join them
at fixed points. Direct awards under frameworks as they are today
would be permissible provided that the objective criteria are set
out in the framework documents.

And then finally in relation to the process changes, is a theme
runs through the paper around political priorities it is very clear
that the government proposals say that procurement should be used
to underpin and support national priorities government priorities.
And so the proposal is that there will be a national procurement
policy statement issued by government and that will set out some
key principles that contracting authorities will be expected to
comply with in running their procurements. Example is given in the
paper are there might be a greater emphasis in running procurements
on creating new business, new jobs, new skills in the UK and
proving supplier diversity or innovation and a supply of resilience
or tackling issues such as climate change and reducing waste. So
there could be a greater emphasis put on central themes and central
objectives around government and authorities would be expected to
comply with that as part of their procurements.

I mentioned earlier on in relation to value for money currently
you will know that the rules say that when you apply criteria to
determine who is your preferred bidder the criteria must relate to
the subject matter of the contract and it is proposed that we might
broaden that so that you can open up to economic social and
environmental outcomes as well as considerations around suppliers
records around prompt payment and achievement of environmental
targets. So broadening that concept of value for money.

Finally in relation to process changes and this is a significant
change in relation to transparency. The paper talks about
transparency will be imbedded in our procurement regulations by
default so transparency is imbedded by default. Much more
requirement to publish information so publishing notices in all but
a few cases including for example modifications and variations to
contracts. At the moment there is a requirement to issue a
modification notice for some contract variations but not all and so
there is a much greater push for transparency. Most significantly
that final bullet greater publication of information before the
contract award and standstill period. So at the moment as a
procedure is concluded just before contract award as you know the
bidders will receive their debrief letters and we apply a
standstill period. At the moment that just says these are the
scores you got, these are the relative characteristics.

The proposal is that bidders will get a lot more information,
and the paper refers to the sorts of information that you currently
pull together in your regulation 84 report so some of the
background papers that led to the options around the procurement
some of the, presumably a lot more information around why you chose
the particular type of procedure you did, more information I am
assuming around evaluation and some of the feedback there. So a
push for greater transparency and this links into the remedies that
we are going to come onto to talk about on how that should
streamline the process around seeking remedies if you are unhappy
with the outcome and reducing costs. If we have a concern, and we
were talking about this within the team yesterday, is might this be
a stage now in the process going forward where there are going to
be some delays because as a contracting authority on the threshold
of issuing all of this information might there be a temptation just
to stop and double check and be very careful about what is going
out. Knowing that this is the point where the challenges are going
to come and we are going to be giving much more information out to
bidders than we have traditionally done in the past. So this is
going to be interesting to see how this evolves and whether it
achieves the desired outcome of streamlining the process reducing
delays and keeping costs down. So I think that is going to be an
interesting area to watch and of course for suppliers on the
webinar this morning this will be invaluable information for us to
be able to look at and examine and really get under the skin of the
reasons for why the decisions have been made and the bids have been
evaluated in the way that they have done.

So the final couple of slides deal with litigation and remedies.
So firstly, the proposal is that they set up a new unit within
government almost certainly within the Cabinet Office with
responsibility for monitoring public procurement and intervention
where necessary so this is building upon the public procurement
review service that is currently in place it used to be call the
Mystery Shopper Scheme so the PPRS will be replace by a new unit
with greater intervention powers and the paper unashamedly says
this is about driving up standards in the public sector about
driving up the standards in contracting authorities so the unit
will reserve the right to intervene and say that is just not good
practice let us do it differently, let us start again. And when it
comes to the remedies itself if you are an unhappy bidder, you are
unhappy with the process that has been followed or the outcome the
proposal is that we would have a tailored fast track system within
the technology and construction core and I think most of us looking
at the way the technology and construction core has operated in
recent years we think they are doing a good job that it is great to
have judiciary that are really expert in and understand public
procurement law but it is too expensive and it is too slow and they
have looked across Europe and they think that we could do thinks a
more streamlined and efficient way and there is an interesting
proposal that you might even have some cases just decided on
written submissions. There is a particular barbed comment that the
advantage of this would save the parties employing expensive
barristers. It may explain why some of these proposals have
received a bit of a lukewarm response from members of the bar.

A greater emphasis on pre-contractual remedies. I mentioned
earlier on before the contract is awarded you have much more
information and the ability to bring a challenge at that stage and
paper is strong on the remedies at this stage might be well rerun
the procurement, set aside the decision, correct the errors where
there are obvious errors on the face of what has been disclosed and
the paper says there is no reason to assume that damages is the
remedy that suppliers are looking for and the paper references a
lot of feedback that they have had from the supplier base they have
actually, they are more interested in the opportunity to win the
bid and secure the contract than they are in recovering damages. So
will we see a shift in that remedial landscape which is a way from
longer remedial processes and awards of damages to something which
is faster and slicker. There is a new tribunal service that is also
muted for some smaller claims and the paper says that if the
proposals for the TCC do not bring around the benefits and
advantages that are proposed then they will push more down into
that tribunal stage.

And then our final slide on litigation and remedies is because
the emphasis is now on pre-contractual remedies and rerunning the
procurement or correcting the errors the paper says there should be
less emphasis on damages and the proposal here reasonably
controversial I think is that the damages will be capped at the
legal fees that you have incurred and the multiple of the bid
costs. So by no reference to the profit that a supplier would have
earned under the contract and the paper says that is aimed at
reducing speculative claims. We can have all sorts of interesting
debates about how that fits in with the usual sort of UK law
principles of you should be put back into the place that you were
so a cap on the available damages that you would recover. There are
exceptions for that not surprisingly it would be inappropriate to
cap the damages where you do not have the opportunity to challenge
the award before the contract is entered into. So if you are into
the territory of a legal direct awards crises procurements where no
notice has been published then clearly you should be able to come
along and if you recover damages they would not be subject to the
same cap.

And then a number of procedural points at the end here as a
result of the proposals around urgent and crises contracts there
will be no automatic suspension if a challenge is brought that
would not suspend the contract the authority will be allowed to
carry on with the contract that its awarded for dealing with the
crises and you pick up presumably as part of a damages claim
further down the line but not an automatic suspension for those
contracts and as a result of greater transparency, greater
information that we will see at the standstill period the sort of
mandatory debrief letters that we have got used to will disappear
and again the reliance on the greater transparency before the
contract award.

So final slide key takeaways from this morning before we open up
for some questions. In relation to Alison’s section there just
a reminder there they need to update the procurement templates that
you are using to reflect the updated regulations and some of the
terminology such as the reference across to FTS and the finder
tender service and in relation to that we would encourage to
register for that get on board early rather than doing it the day
before you want to get your notice out just so it is all set up and
ready to run. And we would encourage you to participate in the
consultation process to say the deadline is 10 March you can do
that directly as I know a number of you are or if you wish to you
could feed some observation and comments through to us..

So I will hand back to you Michael at that stage.

Michael: Thank you Robert. You have stirred up
a hornet nest there is a few questions coming your way which is
really interesting. I guess a sort of high level question with your
experience and also the experience of the people, the very
experienced people you are talking to as well. What is your general
sense of excitement around the green paper are people saying yes
this is at last we have finally got a process we think is going to
work or is a bit more muted than that?

Robert: No. I think the proposals have been
broadly welcomed and I can see why, I think there is a
simplification in they are around, particularly I think the single
set of regulations and the reduced number of procedures. I think
there is a little bit more, there is a bit more doubt about whether
the remedies procedures will really be simplified and speed it up
or whether we are just going to find, will we recreate some other
dispute process around earlier pre-contractual remedies might we
get bogged down in that pre-contract stage, you know, we might just
be bringing forward the current debates to a slightly earlier stage
in the procurement process that is my slight reservation around
that but I think the simplification of the procedures is very
welcome.

Michael: Just picking up on the themes one of
the questions is indeed do we think challenges are going to not
just come earlier in the process slowing the process down
perversely but do you think we will just get more of them? Is it
easier to challenge?

Robert: Probably, I think that will all turn on
the scope of the new tribunal when it is introduced so if you are
in smaller claims and it is a fast track procedure then yes. If it
is going to be easier and cheaper to challenge then why would not
you. I think the counterargument to that is if we are being much
more transparent about the process that has been followed and the
reasons for the evaluation scores that have been given maybe that
transparency will result in a great level of satisfaction or
explanation that unsuccessful bidders have and maybe they will feel
less inclined to challenge if they are getting the full information
because there is no doubt that some, at least early requests for
information and informal challenges come from not knowing, not
having that full information and a couple of years ago many of the
people on the webinar will understand that the TCC put out
guidance, encouraged us to be much more open around disclosure of
information and this is just taking it to that next stage. I still
think there is a tendency to hold back on information because of
that worry that it will generate a challenge it may be the case
that that greater transparency opens up, gives a greater
understanding and therefore it may be that challenges reduce so in
theory I could see that it would increase because of the simplicity
of it.

Michael: Thank you Robert. I a good exam
question here coming from Mark so get pen and paper ready Robert,
it is in relation to open frameworks and how they might work and
particularly in circumstances if you had several lots with a
manageable number of suppliers on each say six. Would you have to
open up the application to new and existing suppliers?

Robert: Yes. It is a good question and what the
paper says there is that it might be closed for a period of time
and in that example that Mark’s raised you might have six
suppliers on there. When you come to your three, four or five year
point whatever it is you have said you are going to open up the
framework you need to give the opportunity for not just new
suppliers to come on and show that they meet your requirements and
are deserving of a place on the framework but also the existing
suppliers who might take the opportunity after four years for
example to refresh their pricing. The risk of suppliers who are on
the framework who do that is that they run a risk of being replaced
by the new supplier so you might want to limit the number of
suppliers on your framework to six or eight and once that number is
determined an existing supplier runs the risk of being pushed off
of the framework so it just opens up a bit of a competition at that
later stage.

Michael: Thank you Robert. And two final
questions just I think sort of finger on buzzer type answers so.
Will the replacement to the Mystery Shopper, this is from Fiona,
will the replacement to the Mystery Shopper be likely to have the
wider authority than the guidance Cabinet Office would currently
give?

Robert: Yes. We do not know the detail of it
but the paper expressly says that it is building on the current
PPRS Mystery Shopper Scheme giving greater powers to intervene. So
I think it is going to have that because at the moment what the
PPRS does it will contact, so if a concern is raised by a bidder
during a procurement process PPRS will contact the contracting
authority, it will ask it to explain the process it has followed
but it does not have any real teeth beyond them publishing in its
quarterly report what it has found. So after the event the
authority might find that it has been named in the quarterly report
and the PPRS might say we think this better practice might have
been followed. Now, in practice of course what happens simply
having that conversation can cause the authority to stop and think
but I think going forward the new unit as yet unnamed would have
actually the power to intervene and direct a change in the
process.

Michael: And then probably a great place to
finish with is another question from Fiona. In your current view
when are the regulations going to come in following the green paper
feedback?  2022? Maybe we can have a big launch alongside the
Commonwealth Games of these regulations!

Robert: Who knows, I suppose it rather depends
on the nature of the feedback they get. If they are getting broad
support for it they might well push ahead with it but I would have
thought 2022 was a reasonable expectation obviously government has
quite a lot on at the moment in dealing with all the stuff post
Brexit and the pandemic but there does feel to me as if there is a
bit of momentum behind this. It is a topic that gets people quite
exercised around the whole bureaucracy and it would be seen would
it not as post Brexit one of the key changes that would have been
made in terms of the sort of move away from the European influence
so I can see them wanting to move ahead with it.

Michael: Yes. Very good point that last one it
is quite totemic in that sense is it not.

Robert: Yes

Michael: Just to say if you want to hear Robert
talk again, why would you want to, but if you do want to hear
Robert talk again he will be speaking with Lord Agnew at the next
Whitehall and Industry Group session on 11 March. If you want
details of course please contact Whitehall and Industry Group or
ourselves and we can send you through and just to remind you that
next Thursday we have our MindApples session, if you want a bit of
a break from the grind of lockdown.

So it just leaves me now to thank both Robert and Alison for a
fascinating look at new law and even newer law coming down the
tracks and a big thank you to everyone who has joined us and I hope
it has been enjoyable. Thank you very much indeed.

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