When organisations such as government departments, local authorities, health authorities and educational institutions in the public sector enter contracts with suitable suppliers to provide goods, work, and services, it is known as public procurement. The UK spends some £290 billion on public procurement every year. This huge amount of government spending must be leveraged to play its part in the UK’s economic recovery, opening public contracts to more small businesses and social enterprises to innovate in public service delivery and meet the net-zero carbon target by 2050.[1]
With over 350 procurement regulations in force in the UK, procurement is a complicated process. The Procurement Bill, released in 2022 [LINK https://bills.parliament.uk/bills/3159] aims to simplify things, reforming how public authorities purchase goods, services and public works across England, Wales and Northern Ireland.
Some of the key areas it seeks to reform include the general procurement principles, procedures and exemptions, the rules regarding debarment and exclusion and the modification of contracts. If successful, the new Bill could open opportunities for a range of businesses to bid for contracts that could otherwise have been beyond their grasp.
Under the modernised procurement structure, procurement regulations will be managed within a single centralised platform with an increased focus on transparency, integrity, value for money and public benefit. Bringing the system in line with UK Government 2020 Green Paper “Transforming Public Procurement” scoped to provide equity of access to public services, health, education and employment to all community members.
How will the new Procurement bill impact employers and their recruitment partners?
Changes to public procurement will make it easier for new entrants of all sizes, especially those delivering against social value commitments, to enter public sector supply chains. This reform will create increased opportunities for innovation, employment and development; however, the scope of the Bill has the potential to go much further.
The increased focus on transparency, integrity, value for money and public benefit will put increased pressure on public sector organisations and their suppliers to justify the social value of where taxpayer money is being spent. This should positively impact procurement decisions, pushing a greater commitment towards those suppliers delivering against social value commitments.
New safeguards within the procurement process
Contracting authorities are obligated to communicate decisions concerning the award of a contract by way of de-brief. The de-brief must include the criteria and the reasons for the decision, including the characteristics and relative advantages of the successful tender. This aims to provide overall transparency, allowing suppliers to determine the fairness of a decision and help them improve future tenders.
To ensure continued supply quality, the new procurement process will require contracting authorities to set at least three key performance indicators (KPIs) for contracts over a specific value. It still needs to be determined what the KPIs are required to cover, but it is likely that they will be in line with the initially defined procurement objectives. These KPIs must be assessed annually for the duration of the contract to ensure the supplier continues to meet the agreed requirements. If a supplier fails to meet expectations and has been given the appropriate opportunity to improve performance, the contracting authority can exclude them from future procurement processes.
While the new Bill will make tendering for public contracts easier, the decision to tender shouldn’t be taken lightly. Negative contract performance due to overreaching or failure to understand the requirements can have far-reaching ramifications. It will be crucial for suppliers to ensure they have closely reviewed the scope of supply, the procurement objectives and how performance will be measured while also ensuring that they have a clear and sustainable way of monitoring the KPIs and information requirements.
The Bill is passing through Parliament and is expected to come into force in October 2024.
If you work in a procurement team for a public sector employer, you may like to read Blue Arrow’s series of 3 papers which help you navigate the procurement of staffing and workforce solutions.
1. Which recruitment service is right for your business?
2. How to select your recruitment service provider?
3. How to manage your recruitment partnership?
[1] Green Paper: Transforming public procurement. www.gov.uk/government/consultations/green-paper-transforming-public-procurement.
