Routes to market under the Procurement Act 2023

One of the stated aims of the transformation to public procurement which has resulted in the Procurement Act 2023 was to speed up and simplify the procurement process.

With the implementation of the new Act now delayed until February 2025, we will have to wait to see what impact the new legislation has in practice. In the meantime, there are some clear differences from the present regime which bear considering.

Routes to market

The Act consolidates the procurement procedures which are available to contracting authorities when going to market for goods, works and services. Aside from framework agreements – which are discussed below – there are currently five procurement processes, the most common of which are:

• The Open Procedure, being a single stage process whereby the contracting authority advertises its opportunity to suppliers at large, and any supplier in a position to deliver the contract may tender for the opportunity
• The Restricted Procedure, being a two-stage process including an initial pre-qualification or selection stage during which the number of potential suppliers is whittled down.

The Act reduces the routes to market available to contracting authorities to just two: the existing Open Procedure and a Competitive Flexible Procedure. The latter is defined in the Act as “such other competitive tendering procedure as the contracting authority considers appropriate for the purpose of awarding the public contract”.

Whilst this appears to represent a significant departure from the current regime, it remains to be seen whether we will see substantive change in practice in circumstances where contracting authorities do not have an entirely free hand when designing procurement processes. For example, where they remain required to comply with certain requirements concerning the service of notices and time limits as well as the overarching principles of procurement.

It is noted that the guidance to the Act suggests that the Competitive Flexible Procedure can be used to run procurements which look a lot like the existing procedures, and it is anticipated that, at least in the early days of the new regime, contracting authorities are likely to stick to what they know.

Framework agreements

The Act retains the concept of framework agreements, now to be known as “frameworks” and defined as a contract “between a contracting authority and one or more suppliers that provides for the future award of contracts by a contracting authority to the supplier or suppliers”. Whilst at present calling off a contract from a framework agreement is generally done by way of either direct award or mini-competition, under the Act the default position will be a mini-competition with direct award being permitted in certain circumstances.

The Act also introduces the new concept of an “open framework”. In contrast to frameworks as we know them, whereby the suppliers remain the same for the duration of the framework, an open framework must be re-opened to competition at least once in the first three years of its lifetime and at least once in the five years thereafter.

This means that suppliers who were initially unsuccessful in bidding for a place on the framework will have an opportunity to obtain a place when competition is re-opened. Whilst the advantage to contracting authorities is that they will be able to obtain the benefits of additional competition within the market, and address issues if existing suppliers to not have capacity, merge or cease to exist, the counter argument is that layers of additional competition potentially come and added cost and bureaucracy for all parties.

It will therefore be interesting to see how open frameworks are used in practice by contracting authorities.