What can we expect from the Procurement Bill?
A third of public money, or around £300bn a year, is spent on public procurement. With the Procurement Bill set to have its Second Reading in the House of Commons this week, now is the time for the construction sector to prepare.
For local authorities and other public sector organisations, the bill will create both opportunities and challenges that need to be addressed. They’ll need to look at training and development for their teams, producing new regulation-compliant procurement documentation and, where needed, a reshaping of the supply chain to ensure as little disruption as possible.
So, what can the built environment expect from the bill, and how can the industry act to ensure a smooth transition?
The bill is likely to see the introduction of a longer framework option, of up to eight years. This will be in addition to the existing four-year frameworks currently used. It will require contracting authorities to give new suppliers the opportunity to join the framework at least once during its term and must not be closed to the market for longer than five years. Existing framework suppliers may be unsuccessful through the framework re-procurement process. As is currently the case, the four-year framework will be closed to new entrants for its duration.
Having a longer-term framework potentially allows deeper relationships to be developed with suppliers over longer periods of time. However, if new suppliers are to be onboarded part-way through, it may not save a great deal of procurement resource or cost.
A better way forward may be to use Dynamic Purchasing Systems, which offer complete flexibility to adding suppliers, although this approach will incur increased costs for the rolling on-boarding process.
Bringing quality and transparency to the fore
Currently, the successful tenderer is selected on the basis of the ‘Most Economically Advantageous Tender.’ The new bill is likely to remove the economic emphasis to discourage contracting authorities from a ‘race to the bottom’ approach that prioritises cost over quality, carbon reduction and the social value contribution of supply chain members.
The legislation proposes a central database for all contracting authorities to report into. This would require authorities to submit more detail on their evaluation process and ongoing contract performance as well as regular updates on the performance of suppliers.
The increased transparency will see contracting authorities upload details of their frameworks onto the central hub. In time, this should result in fewer authorities implementing their own frameworks, leading to increased efficiencies and reduced bidding costs for suppliers.
How to prepare
To hit the ground running when the bill comes into force, preparedness is key. Processes and policies should already consider pre-market engagement and supplier assessment with key decisions being recorded and transparent. Systems should also be readied for new data requirements, and colleagues should be trained and upskilled. Contract registers and details should be updated and, wherever possible, it is wise to review the forward pipeline of procurement activity and engage with the supply chain about the new legislation.
Overall, the indicators are positive – the Procurement Bill will likely help the built environment on its way to implementing more transparent and seamless processes that place social value and quality at their heart. Early preparation will allow the smoothest transition into new ways of working during the implementation period before the new regime goes live. Ideally, the legislation will become a new best practice blueprint, with those outside the public sector looking to adopt these processes too. Only time will tell whether this ideal will become a reality.
This article was originally published in BE News.