Wed 10 Jul 2024

Procurement Act 2023 – What do Devolved Scottish Authorities need to know when using UK Frameworks?

The UK Government’s Post-Brexit public procurement reforms will take effect on 28 October 2024 when the Procurement Act 2023 (the “Act”) is to go live.

Devolved Scottish Authorities ("DSAs") are excluded from the new Act. DSAs are those with functions which are exercisable only in or as regards Scotland and do not relate to wholly reserved matters. This is also the position with authorities subject to the oversight of DSAs. However, DSAs that wish to call-off works, supplies and services from a Framework established under the new Act will need to understand and comply with those parts of the Act relating to call-offs as opposed to following the familiar procurement process in Scotland. This will, for example, apply to the tens of thousands of common goods and services available through new Frameworks set up under the Act by Crown Commercial Services. The new Act will not however apply to Frameworks set up by DSAs. They will continue to be governed by current procurement laws in Scotland.

Benefits of Frameworks

Frameworks do of course offer benefits which include economies of scale. They enable public bodies to purchase works, supplies and services on a repeat basis without repeating many of the full stages of a full competitive tendering process. This simplifies the award process and makes the process more efficient by, for example, having a template contract that all suppliers sign up to when bidding to join the Framework. However, DSAs wishing to take advantage of these benefits through UK frameworks will need to be familiar with the Act including some key differences from the procurement regime in Scotland.

Key objectives and changes in the Act

Transparency requirements: Transparency is an overarching theme under the Act. Once a decision has been taken to award a call-off contract, a contract award notice must be published before entering into the call-off. This is a stark contrast to the current procurement law position in Scotland. Subject to limited exceptions, it is also necessary to publish a contract change notice before modifying a contract.  The Act provides for the establishment and operation of an online system for publication and other purposes. It is expected that the UK’s existing e-notification service, Find a Tender, will be modified to incorporate publication changes under the Act and we await the detail on whether this will interact with Public Contracts Scotland.

Key Performance Indicators: In terms of contract management, where the estimated value of the contract is more than £5m, it will be necessary to set out at least 3 Key Performance Indicators (KPIs) before entering into a contract. The KPIs must be published and at least once every 12 months a contracting authority must assess performance against the KPIs and publish certain information. This must also be done if a contract is terminated. Certain other information will also require to be published where a supplier is in breach or has failed to perform.

Position with standstill: The new Act makes no provision for a standstill to be carried out when calling-off from a Framework and so, standstill remains voluntary. Therefore, should the public body wish to, it should be possible to enter into the call-off immediately following publication of the contract award notice. However, where a contracting authority voluntarily provides for standstill in the contract award notice, it must be for a minimum period of eight working days. A contract detail notice must also be published within 30 days of entering into a contract and a copy of the contract must be published within 90 days if the estimated value of the contract is more than £5m. This includes circumstances where the £5m threshold is reached due to a contract modification.

Whilst the terminology used for conducting mini competitions is slightly different, the rules nonetheless remain broadly similar under both the Act and the procurement regime in Scotland. There are also   general provisions within the Act which will apply to any call-off, for example: implied payment terms of 30 days and record keeping requirements to explain material decisions. Again, these are requirements which DSAs should already be complying with. However, the remedies available for any breach of the call-off and associated provisions will be those contained in the Act, with any challenge being made in terms of the Act. It is also assumed that the right to carry out a procurement investigation will extend to DSAs to the extent that a breach may have occurred. 

In terms of transitional arrangements, existing Frameworks and call-offs will continue to be governed by previous legislation. That said, DSAs should get ready by considering how the Act will impact their own internal procurement procedures and processes, incorporating these changes when calling-off from UK Frameworks and ensuring that those engaged in procurement understand the new requirements.

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