Insight Report: Pagabo Live | Procurement Reform Update – Planning for 2025
The Procurement Act 2023 has the potential to be one of the most seismic pieces of built environment legislation in recent memory, promising a huge overhaul designed to make procurement simpler, more transparent and more efficient.
In our Procurement Act special, our panel of experts featuring Pagabo’s head of procurement Shamayne Harris and Tim Care, partner at Ward Hadaway, together navigated the key talking points around the act and how it will affect the public and private sector alike.
In order to better gauge the particular areas of concern, the webinar – presented by our regular host Tom Snee of Cartwright Communications – featured more polls than in previous editions, pulling out some interesting results throughout the hour.
The opening poll showed that 69% of the audience considered themselves underprepared for the changes, so Shamayne provided an overview the act’s progress through parliament. This summary included the delay in production of the National Procurement Policy Statement, which resulted in pushing the go-live date back to 24 February 2025.
To support the implementation of the act, the Cabinet Office has produced a suite of guidance that addresses all aspects of the new regime, along with a comprehensive learning offer for public sector bodies. However, our second audience poll showed that more than 50% of attendees hadn’t accessed either the guidance documents or the Government Commercial College training.
The challenge was made even clearer by a follow-up poll highlighting a ‘lack of internal resources’ and the ‘complexity of the act’ itself as the biggest obstacles for more than half of attendees.
The changing face of pre-market engagement
We then moved onto the implementation of the act, starting with what pre-market engagement will look like once it comes into force. While the act doesn’t revolutionise how to approach pre-market engagement, it does introduce some new mandated steps and guidance on how it should be conducted and recorded.
In particular, the preliminary engagement now takes place before the publication of the tender notice – which was known as the contract notice under the previous Public Contract Regulations (PCR) – and this engagement should support contracting authorities and the market to prepare for procurement. While this engagement isn’t mandatory, a pre-market engagement notice needs to be issued if this does take place and, ultimately, this engagement shouldn’t distort competition or provide any potential supplier with a competitive advantage.
Tim added that even with procurement reform, it remains important to identify potential conflicts of interest and learn how to manage them – be they conflicts within the procuring authority itself, or between the authority and the potential supplier. This is best done through a conflicts assessment – which should be undertaken both at the start of the process and on an ongoing basis – and acknowledged in public notices throughout the procurement process.
Frameworks of the future
The role of the framework is constantly evolving, so the discussion turned to their post-reform future and the possible implications on suppliers. When pressed on whether they have a place going forward, Tim answered emphatically in the positive, saying that while there is an increased requirement for transparency, the act doesn’t fundamentally change the traditional framework we’ve all known and loved for many years.
However, he highlighted that the introduction of open frameworks – which can last for up to eight years and allow contracting authorities “refresh” the framework with new suppliers – is an exciting new development, essentially mitigating the historic criticisms of frameworks being too restrictive for client and suppliers alike.
Direct award is one of the most popular procurement routes used on the construction frameworks Pagabo manages, and again the future here looks positive. While the act does slightly change the wording around direct award, the basics remain the same as they were in the previous PCR – the core terms and conditions of the call off contract must be set out in the framework, and there has to be an objective means of appointing the supplier.
He also referenced the new “Dynamic Market”, which replaces the existing Dynamic Purchasing System (DPS). The Dynamic Market is set up differently to the DPS in that there isn’t competitive procurement to be part of it, and new suppliers can join at any time – but any client wishing to call off a contract from that list has to undertake competitive procurement. The panel agreed that the jury is still out on how effective this change will be and how useful the Dynamic Market will be, especially around sub-threshold contracts.
Despite the uncertainty around Dynamic Markets and open frameworks, the audience poll suggested that 81% of attendees will still be looking to use a framework provider as a compliant route to market after February.
Pagabo-managed frameworks – what are they?
As we move closer to the implementation of the act, it’s more important than ever to understand the different classifications of frameworks under the new regime. For us at Pagabo, we provide the expertise and services to establish and manage framework agreements on behalf of contracting authorities, acting as an agent of the contracting authority.
That approach differs significantly from third party frameworks, which is essentially a framework created without the collaboration or support of a contracting authority.
Addressing poor contract performance
Tackling poor supplier performance is a key facet of the incoming procurement reform, and Tim spoke at length about how changes address some of those issues.
The three areas of contract management being addressed are key performance indicators (KPIs), breach of contract and poor performance, and the panel discussed each of these, how they would apply and where they fit within the government’s transparency agenda.
The discussion addressed the controversy around how both the performance against KPIs and breach of contract issues would be reported publicly on a central digital platform, but lengthy discussion centred on the point around assessing poor performance in an objective way.
Both Tim and Shamayne agreed that this is the area that could create the most ongoing concern given how subjective the concept of “poor performance” can be. Tim advised to make sure there are mechanisms within the contract that describe performance objectively – leaving less room for subjectivity to become involved.
In a poll that followed, 60% of respondents said that this would change the way they approach procurement after February, with a further 28% saying they were unsure. Again, this indicates that further training and upskilling around the act is needed across the industry.
The future of standstills
Following the poll, Shamayne took the audience through some of the subtle changes to standstill periods that the act will bring in, as well as the new terminology that will apply.
Importantly, the new Contract Award Notice will be issued prior to the standstill period starting, in contrast to it being issued 30 days after the contract has commenced under PCR. This will be replaced by a new notice, called a Contract Details Notice, which will be issued in that same 30-day period.
The definition of the standstill – the period of time between the contracting authority announcing its intention to enter into a contract and actually enter into a contract – remains the same and gives suppliers the chance to raise concerns or formally challenge the decision before the contract is entered into.
In terms of the length of standstill, a further subtle tweak in the language used in the Procurement Act has changed this from 10 calendar days to 8 working days, beginning with the date the Contract Award Notice is issued.
Tim also zoned in on the introduction of the assessment summary – which has replaced the standstill letter – stating that it should be easier to write under the new procurement regime as the need to talk about relative advantages has been removed. However, he also reminded contracting authorities that unsuccessful bidders take a keen interest in the feedback given and look for inconsistencies with the scoring methodology, so it’s important to get this right early in the process.
Shamayne added that this showed how critical the plan and define stages are in the procurement process, but that these are often the areas that are rushed through and not prioritised. This was reflected in the responses to the subsequent poll, where around a third of the audience said that they needed more guidance on each of the plan, define and procure stages.
Preparing for the changes
There’s a lot to get ready for – so how can the public sector best prepare for the implementation of the Procurement Act from February? Shamayne reiterated the importance of reviewing the guidance documents that have been published, as well as the official training aimed at practitioners and policy leads within public sector organisations. She also recommended that those clients looking to procure works in 2025 and beyond look at their pipeline and establish project plans that build in appropriate time for the plan and define stages, as well as the increased administrative burden.
Tim opened his concluding advice with the phrase “don’t panic” – imploring the audience to remember that everyone is in the same boat and that new processes naturally take time to bed in. While the new regime will kick in from February, existing frameworks will continue to run under the previous regulations, so a natural transition period approaches.
There are still several areas of uncertainty within the upcoming changes, but the overarching message from the webinar was one of ensuring that you are as prepared as possible through the guidance notes, training and consuming as much advice as possible.
You can watch the full episode online here, and also take a look at our Procurement Reform page on the Pagabo website to check out our resources, penned by our team of procurement experts.
Pagabo Live will return in 2025 with a full calendar of online and in-person events, and you can register to join here: https://pagabo.co.uk/pagabo-live/
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