Understanding the new Procurement Act 2023: What suppliers need to know - Part 2

In Part 1 of our FAQs for suppliers , we covered key changes to the procurement process  and what suppliers can do to get ready for the Procurement Act. In Part 2,  we're diving into what suppliers need to be aware of at the selection and award stages -  this includes understanding the new debarment list, changes to contract award and standstill and what options are available to suppliers if things go wrong.

How will the exclusion and debarment regime work?

The updated exclusion and debarment regime marks one of the Act's biggest changes for suppliers, introducing a publicly centralised debarment list.  The list will be managed by the Procurement Review Unit (PRU) and will contain the names of excluded and excludable suppliers. Suppliers may remain on this list for up to 5 years and will be unable to bid for public contracts during that time. Being placed on the debarment list could therefore have a serious reputational impact for suppliers.  Importantly, suppliers have the right to appeal proposed debarments - but timely action is essential.

To be designated an excluded supplier, they must meet one of the mandatory exclusion grounds listed in schedule 6 of the Act. These reasons may include tax evasion, labour market offences or competition law infringement. Meanwhile, excludable suppliers meet one of the discretionary exclusion grounds set out at Schedule 7 of the Act. New grounds have been introduced including for suppliers who threaten national security or past poor performance - see paragraph below.  

It is also important to note that the scope of the exclusion regime has been widened to include associated persons and connected persons. An associated person, such as essential subcontractors, are those a supplier relies on to satisfy the conditions of participation. Connected persons include individuals who have significant influence or control over the supplier.

What would qualify as 'past poor performance' changed under the Act?

Previously, suppliers could only be excluded if past performance led to contract termination or damages for breach. This has now been extended to termination by way of settlement, a more frequent outcome in practice.

Further, a new discretionary exclusion ground applies to suppliers failing to satisfactorily perform a public contract even after being given an opportunity for improvement. This could apply for example in cases of persistent failure to meet KPIs or achieve milestones.

How has the evaluation criteria changed?

Under the new regulations, evaluations will now be assessed on the basis of 'Most Advantageous Tender' instead of the 'Most Economically Advantageous Tender'. In practice, this is unlikely to have a significant impact on the award criteria.

What changes will I see to the decision to award a contract?

Instead of the familiar “standstill letters”, suppliers will now receive assessment summaries, providing detailed feedback on why their bids were successful or not. Unlike previous, often generic feedback, the assessment summary will draw directly from the evaluation report, referencing specific sections of the supplier’s bid.

Here’s how assessment summaries work:

• Successful suppliers will receive a summary of its own scores and evaluation summary notes.
• Unsuccessful suppliers will receive a further explanation of why they are not being awarded the contract as well as how the winning supplier scored against the award criteria.

The assessment summaries must be provided to all suppliers at the same time and before issuing a Contract Award Notice. This new Contract Award Notice will inform the market of the contract decision - as opposed to the current Contract Award Notice which is used to notify the market that a contract has been entered into.

How is standstill changing and what impact will this have?

There are some important changes to the calculation of the standstill period which will impact upon a supplier's remedies for breach of the procurement rules. Under the Act, the Contract Award Notice initiates the standstill period, which shifts from 10 calendar days to eight working days. Day one of the standstill period is the day on which the supplier receives the Contract Award Notice.

We have set out two examples below showing how the standstill period will work:

Example 1: If both the assessment summary and the Contract Award Notice are sent out the same day on Friday 25 October, the standstill period ends Tuesday 5 November.

Example 2: If the assessment summary is sent on Friday 25 October, and the Contract Award Notice on Monday 28 October, the standstill period ends on Wednesday 6 November.

The time limits for bringing a procurement challenge are very tight and automatic suspension will apply if a challenge is brought and the contracting authority is notified, within the standstill period. This prevents the contract being entered into within this time.

How will the increased transparency impact suppliers?

While the additional notices provide suppliers with deeper insight into public contract opportunities, increased transparency also brings risks:

• For unsuccessful suppliers: Contracts worth over £5 million will name unsuccessful suppliers in the Contract Award Notice. Repeated public listing in this category could impact market reputation.
• For successful suppliers: Contracts above £5 million require publication of the contract itself and its KPIs. Suppliers should ensure any commercially sensitive information is clearly marked when submitting tenders.

Publishing notices under the Act is a statutory duty and if an authority fails to publish a compliant notice within the time limits then this is a breach of statutory duty. Suppliers would have a potential right of challenge provided they can demonstrate this breach has caused them to suffer a loss or risk suffering a loss.

Will the Procurement Review Unit provide me with an alternative avenue for complaint?

The Procurement Review Unit (PRU) has been established to monitor compliance across contracting authorities and will focus on investigations into contracting authorities who demonstrate patterns of repeated non-compliance across its procurements following a supplier's complaint. Although the PRU does not provide suppliers with a direct remedy it provides an alternative more affordable avenue for complaint.

If the PRU considers the contracting authority may give rise to a breach of the Act, they can issue a recommendation under s109 of the Act which includes actions the contracting authority can take to ensure it complies with the Act. This has been expanded from the current Public Procurement Review Service which provided non-binding recommendations only.

Please feel free to get in touch if you would like support and assistance on how to get ready for the Procurement Act. Contact Isabelle West or Stephanie Rickard in our Public Sector team at 07384 251 896.

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