In a statement to Parliament on 12 September, the Cabinet Office advised that the UK Government was intending to seek a “short delay” to the commencement of the new Procurement Act (the Act). The main provisions of that Act will now come into force on 24 February 2025.
Accordingly, any procurement commenced from now until this new February deadline will be governed by the current procurement regime, as will any contracts issued as a result.
The Act was originally proposed to come into force next month so the relatively short notice for this pause will be a surprise and nuisance to some affected bodies, but almost certainly a relief to others still working through the steps to implement the new procurement regime (particularly as statutory guidance has only been issued late in the day). The keys to tackling the 4 month breathing space are to:
- continue to ensure processes, procedures and documents are ready for the new regime;
- make sure you are ready to adapt to the Government’s proposed new National Procurement Policy Statement (NPPS), more of which below; and
- strategically manage existing and pending tenders to get the outcomes your organisation needs.
As always, there are opportunities to be agile and responsive while driving forward ‘best value’.
A NPPS in the air?
The reason behind the delay is that the new Labour Government wants to allow more time to produce a replacement National Procurement Policy Statement (NPPS) to sit alongside the Act. The NPPS itself is a document that sets out the Government’s strategic priorities in procurement delivery. The Act provides that all contracting authorities, with some limited exceptions, must “have regard” to the NPPS in implementing any procurement not within framework or dynamic marketing awards.
The 12 September statement advised that the new NPPS, once it arrives, would be a “a bold and ambitious Statement that drives delivery of the Government’s missions”. It is therefore likely to be a substantial update to the draft NPPS issued before the last election, and which faced some criticism for being fairly anodyne and also hedging somewhat on how concepts such as social value should be treated by contracting authorities.
Detail for the new NPPS remains to be seen and the Government has promised publication and consultation shortly. Working back from the proposed timetable for legislating on the Statement, it can be expected that consultation will begin shortly and close by early January at the latest.
The new NPPS but it is likely to be significantly more prescriptive and ambitious, putting further requirements on contracting authorities, and it may include further language on the new Government’s priorities for carbon reduction and in driving economic growth. Organisations must be aware of its terms and be ready to respond to them as soon as we hear more.
It will be important to set aside resources to be able to respond to the new NPPS and to make sure that the processes set up for implementing the new regime include a ‘space’ to allow for changes to documents, practices and communications that may be caused by this change in strategic direction. Additional training and know how should be on standby for operational teams.
We will be providing some commentary on the new NPPS once it arrives.
An Extended Transition
As well as being ready for NPPS, there are a number of practical steps that organisations should or must consider to manage the extended transition period.
Firstly, all organisations should take advantage of the extra time to refine their implementation of the new procurement regime. There is now more time to review and draft (or redraft) template documents, including ITTs, standards and guidance, as well as to train up staff. You now have a bit more time to mark your own homework, and check and double check! This also means you have more time to work on implementation pathways, including training for team members and ensuring resourcing is in place, including any new IT and contract management systems. This will include identifying, appointing and training personnel and upgrading systems to deal with the new KPI, contract modification, termination and other notices required under the Act.
Conversely, this delay may mean you need to review existing contracts for implementation, for example, do you need to adjust the start period for any new IT contracts, if possible? There is an opportunity to spread out resourcing and expenditure, but conversely you may need to think about the impact on budgets and some costs may move to the next quarter.
Secondly, organisations will need to think about the impact on their planned tenders and existing frameworks, a fact well acknowledged by the Cabinet Office.
If you were planning on starting a procurement in the period November to February, you will have to consider the most commercially sensible next steps are.
- If the procurement itself is time critical, you will need to consider tendering under the current (ancien) regime. You may need to bring back certain documents and systems that you were planning to retire and double check them to ensure that they comply with the existing Procurement Regulations, or indeed (re)adapt your new Act compliant documents to the old regime.
- Moreover, you should identify and double-check what other contracts outside of the procurement rules are being undertaken in that time period. There will be some contracts that would not have been regulated by the Act but still are under the Procurement Regulations, and so which will need to be reverted to being public procurement compliant.
- If the procurement is not time critical, you can consider trying to extend existing contracts, and you will need to check that your existing agreements allow for this, and such extension is compliant with the current rules. Otherwise, you may just push out the new contract exercise until after February and do so under the Act, but bearing in mind the impact on resourcing, budgets and considering the significance of the contract. You may not be set up to push out all of your new tenders immediately on 25 February 2025, although you do have the benefit of some extra time to lay the groundwork.
The Act is still coming
Notwithstanding the uncertainty created by the new NPPS and by this 4 month pause, organisations will know and be aware that the Act is still coming and will be a radical reform to the UK’s entire public procurement regime. You must take advantage of this extra time and build on your existing work and practices to make sure you respond effectively. You should take appropriate internal and external advice where you are uncertain or need additional support.
We will be publishing and speaking more on the Act and on the course of its implementation over the coming months and hope to assist organisations in getting ready for this transformation.