Houses of Parliament

Procurement Bill passes through House of Lords

The Government Commercial Function has announced that the Procurement Bill has passed trough the House of Lords this week, signalling a major milestone in the project to transform public sector procurement.

Following house of debate, the government made a number of alterations to the bill, with these adjustments looking to support economic growth and reduce burdens on contracting authorities. The major changes are, as detailed in the announcement, as follows:

  • A specific duty on contracting authorities to have regard to small and medium-sized enterprises is now enshrined in legislation.
  • There are also now provisions to ensure that contracting authorities may not require:
    • Audited accounts to test the financial standing of bidders as part of conditions of participation, unless they are already required to have their accounts audited under the Companies Act 2006
    • Insurance relating to the performance of the contract to be in place before the award of the contract - so SMEs do not need to incur unnecessary bidding costs in taking out insurance cover without the guarantee of winning the contract.
  • A revision of the threshold above which contracting authorities must publish specific transparency data (key performance indicators, publication of contracts, contract change notices) from £2 million to £5 million, to reduce the burden of these requirements on contracting authorities and ensure a more proportionate approach in focusing on the larger contracts
  • An amendment to include, in the text of the bill, an explicit duty on the Minister for the Cabinet Office to provide a central, freely accessible, digital platform.
  • Finally, contracting authorities will now be required to share with all participants a redacted assessment summary of the winning bid only and send the unsuccessful budders their own summary privately.

The first House of Commons reading of the bill was on the 14th December, with it going through the same process that it did in Lords, beginning in January. The announcement anticipates that the bill will gain Royal Assent in the Spring, which will be followed by the necessary Statutory Instruments (regulations) being developed.

With the bill needing six-months of notice before it goes live, the current legislation will apply until that date, with any contracts beginning under the current rules following the existing legislation. Contracting authorities will be able to access published advice on things to consider around managing the transition to the new legislation in the new year.

In the announcement, the Government Commercial Function said:

“Since our last stakeholder update the team has been making good progress on developing and testing the Knowledge Drops for contracting authorities and suppliers and the e-learning modules for contracting authority practitioners, as outlined in the L&D offer.”

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