Post-Brexit compliance in procurement

The end of the Brexit transition period has passed, and with it many rules and regulations are changing across the board for many industries. But what changes may we see in public sector procurement? Our national framework manager Jonathan Oram discusses.

What will change?

From 1 January 2021, we are no longer bound by the EU Procurement Regulations, but the public sector is still bound by the Public Contracts Regulations 2015 (PCR2015). Initially, the main impact of Brexit on the procurement process is that all future public sector opportunities - including future frameworks procured by Pagabo - will be advertised on Find a Tender, which replaces the Official Journal of the European Union (OJEU). We would recommend, if you haven’t already done so, to go and get registered on the Find a Tender portal.

Now that the UK public sector is no longer bound by the EU’s procurement regulations, it has allowed the UK government the freedom to begin the process of reviewing the current suite of procurement regulations. The government’s ‘Transforming Public Procurement’ green paper, published on 15 December, has some interesting thoughts around trying to bring public sector procurement into something that is more suitable for the public sector as a whole, acknowledging that not one size fits all and that there are shortcomings in the current processes.

The proposals in the green paper are at initial exploratory stages, but it will be interesting to see how these will eventually map into new policies. We will be having our say and providing feedback to the questions proposed within the green paper. We would expect any amendments to PCR2015 to take place over the next 12 to 18 months and to be released as PCR2022.

There are already some additional requirements being implemented alongside the current PCR2015 requirements that tie into the government’s procurement strategies surrounding social value, carbon neutrality and SME engagement. Good examples of this can be found within the government’s recently released ‘Construction Playbook’.

However, any future amendments would still have to be in line with the principles of the Government Procurement Agreement (GPA), which is an agreement for World Trade Organisation (WTO) members, including the UK. This would include embedding the principles of public procurement within the law. This would expand on the three existing ‘EC Treaty’ principles of transparency, integrity, and fair treatment of suppliers to also include value for money, efficiency, and non-discrimination.

Whilst there is much to discuss in relation to the green paper, in my view the following points are just a flavour of some of the proposals being put forward.

Increased flexibility will be key for future procurement

Two interesting areas that the green paper proposes are around updating and simplifying procurement procedures, as well as the types of resulting frameworks and dynamic purchasing systems, which will have the most impact.

Within the procurement procedures, one of the more interesting proposals is around what is being termed the Competitive Flexible Procedure. This would be similar to the existing Light Touch Regime, which is currently only applicable to procure specific social, health and other services. It would replace some of the existing procedures (restricted competitive dialogue, competitive procedure with negotiation, innovation partnerships and design contests) and give commercial teams the flexibility to design a compliant procurement process that meets their needs and the needs of the market. This can only be seen as a good thing for all concerned.

The negotiated procedure without prior publication of a contract notice is proposed to be renamed as the Limited Tendering Procedure and there will be a new circumstance included which will allow for use in a crisis, like the current pandemic.

The green paper also talks about the possibility of open frameworks to introduce more flexibility. As it stands, frameworks are locked, and once suppliers are appointed there is currently no mechanism within the regulations to add on new suppliers during the term of a framework agreement. The new proposed open type of framework would, at specified intervals, allow new organisations to bid to be part of the framework and for existing organisations to update their previously successful bid to reflect the prevailing market conditions.

The Dynamic Purchasing System (DPS) process is also set to be reviewed again. The rules were made more user-friendly in PCR2015 compared to PCR2006, but the expansion of the scope and flexibility of DPS could see it fit for wider purposes, with the creation of DPS+. Dynamic purchasing systems are starting to be become more prevalent and are proving to be a very useful tool for public sector organisations in supporting local and social value agendas.

Ultimately, introducing much more flexibility is the biggest thing we are expecting to see in procurement over the coming years, ensuring that the best results can be delivered for clients on a case-by-case basis. As a framework provider, this flexibility is something that we place central to our client services at Pagabo – and increasing this flexibility across the whole procurement sector will be to the benefit of the public sector.

Centralised data to support SMEs and greater accountability

The government is working towards a centralised procurement database, on which company details will exist and link together with tender processes. In reality, this is something that has needed to happen for a number of years and making this standard practice will really help to reduce costs, as well as remove barriers for SMEs, and help with government initiatives to engage with these companies more on procurement activity.

There is also a proposed requirement to provide more information throughout the life of a contract. This could be via an opensource data standard such as Open Contracting Data Standard (OCDS), which is used by more than 30 governments around the world and would allow more transparency and quicker transfer of information. By having this openness, supply chains should run more smoothly and ensure that the correct suppliers can be engaged at the appropriate points.

We also expect to see a tightening up around suppliers past performance and how that may influence a bid. As it stands at the moment, past performance can be considered when looking at a bidder’s application for tender, but it remains difficult to exclude them because of it. At the moment we have the ‘prompt payments’ league table, which if a company drops off will see them reviewed. What we may see introduced is a reversed form of this, building a list of suppliers whose performance can exclude them from procurement activity.

Whilst in the short-term Brexit is going to have minimal impact on the actual procurement regulations (PCR2015), it is going to have a huge impact on the actual practice of procurement and that is a whole other topic in itself.

The Pagabo team is always available should you wish to discuss this or how any of our frameworks can help to simplify your procurement.

Read more below: 

View Pagabo Frameworks 

Construction Playbook

Gov.co.uk