School and College Procurement compliance requirements have received a refresh. How will this affect your dealings with the sector?

The Procurement Act 2023 came into effect on 24 February of this year. The Act replaces regulations dating from 2015 which formed the UK implementation of the EU procurement directives. The Act aims to make public procurement “more flexible, transparent, efficient and competitive, while delivering value for money and public benefit”. 

While previously, the focus of procurement law was the actual procurement process itself and, thereafter, the restriction of material amendments to contracts awarded through a competitive procurement, the government, with its focus on transparency, has taken a novel step by requiring contracting authorities to publish information periodically relating to the performance of the contract. More about that later.

Which education organisations are affected by public procurement regulations?

Broadly speaking the public procurement regime is likely to affect all of your UK customers save for those in the independent sector. Compliance will be required by maintained schools (acting through their local authority) and by single academy and multi-academy trusts.

Contracts that are lower level in value do not require the contracting authority to follow public procurement rules (they can do voluntarily) but remember, all public bodies have accountability requirements in the form of contract award rules which must be followed in any event. To understand these you should find them on the potential customer’s website.

What the customer has to ensure in its procurement practices

When evaluating potential suppliers and their offer with a regulated procurement competition, the contracting authority must ensure the process that it embarks upon aims to:

• deliver value for money
• maximise public benefit
• share information
• act with integrity.

The Act will also oblige certain contracting authorities to “have regard to” the National Procurement Policy Statement, which sets out the government's priorities and expectations for public procurement.

Action Point: When reviewing an opportunity – particularly when you see the tender documentation - keep the four mandatory aims of the authority in mind. It would be the right time to challenge the authority over potential bias that may find its way into the decision making process.

For more complex procurements there is greater flexibility in designing the procurement process

Contracting authorities have been given more freedom to choose the most suitable procedure for their procurements, as long as they comply with the principles of transparency, equal treatment and competition. The open procedure, which allows any interested supplier to submit a tender, and the direct award, which allows contracting authorities to award a contract without competition in certain circumstances, are retained, but the scope of their use – particularly direct awards - have been restated. To make an award without prior competition continues to be exceptional and requires careful consideration of the criteria that permits that action being taken.

Welcome to the Competitive Flexible Procedure

We have a new competitive flexible procedure, which will allow contracting authorities to design their own procurement process, subject to some minimum requirements. In selecting this procedure education bodies will be able to tailor the procurement process to fit the specific needs of each procurement flexibly whilst adhering to minimum requirements of transparency, equal treatment, and competition. Authorities can innovate within the bounds of fairness and accountability to create optimal outcomes.
Potential examples where this flexibility might be used include:

• introducing a trial phase where all bidders materials are taken into the classroom within the trial and classroom evaluators scores are taken into account
• receive demonstrations of products within the competition and in person presentations from bidders.

Valuing a likely contract price before moving to procurement has changed

The way contracting authorities calculate the value of their contracts for the purpose of applying the procurement thresholds has changed. The Act will require contracting authorities to include VAT in their estimation, rather than excluding it as before. This means that some contracts that were previously below the thresholds may now be above them.

Selecting the successful bidder – we have moved from MEAT to MAT

A significant change has been made to the criterion for awarding contracts from the most economically advantageous tender (MEAT) to the most advantageous tender (MAT). The aim of this change is to enable contracting authorities to give more weight to non-price factors, such as social value, environmental impact and innovation, when evaluating tenders. However, all award criteria must still be proportionate and related to the subject matter of the contract.

Using the Find a Tender Service in the future will give access to more information

Worried about missing out on a tender opportunity? There will be less excuse for this in the future. Transparency and accountability requirements under public procurement laws have been significantly refreshed and now by requiring contracting authorities to publish more information on the Find a Tender Service (FTS), which is the UK's official e-notification platform for public procurement. The Act will also require contracting authorities to provide more detailed feedback to unsuccessful suppliers, including the scores and reasons for their rejection.

Looking to challenge a procurement decision? Here is how that will work in the future

The Act has reformed the remedies regime for challenging procurement decisions by introducing a new Procurement Division within the High Court, which will have exclusive jurisdiction over procurement disputes. The Act will also introduce new remedies, such as the power to impose financial penalties on contracting authorities that breach the procurement rules, and the power to order the suspension or termination of contracts that have been awarded unlawfully.

And after contract award the compliance requirements just keep coming…

For those who take the time to monitor upcoming procurement exercises there is good news – transparency duties mean that future procurements, when repeating the subject matter of a previous one, will, from the bidder’s perspective, be informed by some useful information and data. Here are the various post contract award requirements that contracting authorities must comply with.

• Publish a Contract Award Notice: this informs the market of the contracting authority's plan to enter into a contract with the selected bidder – it triggers a standstill period allowing objections to be raised before the contract comes into effect
• Publish a further notice known as a Contract Details Notice: to be issued within usually 30 days of signing (in certain cases where the procurement rules have limited effect 120 days)
• If the contract has a value of over £5 million, a redacted copy of the contract must be published
• Publish a Contract Performance Notice: no less than annually the contracting authority must publish a report outlining the contractor’s performance against KPIs within the contract, and also as a separate duty publish a report within 30 days of any failure to meet contractual satisfaction or a breach of contract
• Publish Payment Compliance Notices: Issued within 30 days following the end of each reporting period (each six-month period beginning on 1 April and 1 October) to demonstrate the contracting authority's adherence to the 30-day payment terms
• Publish any Contract Change Notices: These must be issued prior to any “above threshold” modification to the contract. This expands the scope compared to previous regulations which required notices only in specific, limited circumstances
• Publish a Contract Termination Notice: To be issued within 30 days of contract termination, including expiry, termination by any party or under any other circumstances that bring the contract to an end

Action Points: When bidding for a contract keep these contracting authority responsibilities in mind. If KPIs are proposed, ensure they are appropriate, and designed on a basis that is sensible and that you can commit to. Some authorities will undoubtedly set their performance measurement model aggressively. We can help explain how to encourage moderation of expectations and the reframing of any that are too subjective or create trigger point thresholds for failure.

If you are in an area of business where there are regular requirements to compete for work, make sure you have systems in place that capture information published in the form of the notices identified above. There will be commercial providers who undoubtedly will provide a data reporting service but encouraging a team member to undertake this task keeps you closely informed on the subject.