This article discusses the basics of public procurement and provides an overview of the importance of following the requirements of this complex area of law.
Given the stringent nature of the public procurement process, there are often strict requirements which must be met in terms of the form and content of any submissions. No one wants to lose out on a potentially lucrative contract because of some administrative or clerical error in preparing the submission. This is where we can help to ensure a submission meets all of the legal requirements in order to give you the best possible chance of success.
What is public procurement and how is it regulated in the UK?
Public procurement involves government entities acquiring goods / services using public funds and is typically subject to stringent regulation and transparency rules.
The relevant public procurement regulations in England, Wales and Northern Ireland are:
- The Public Contracts Regulations 2015 – this applies to public sector procurements
- The Concession Contracts Regulations 2016 – this applies to the procurement of works and services concession contracts; and
- The Utilities Contracts Regulations 2016 – this applies to procurements by certain regulated utility companies; and
- The Defence and Security Public Contracts Regulations 2011 – this applies to the procurement of certain defence and security contracts.
We will refer to these as the Regulations.
How does it differ from private procurement?
Private procurement is available to any businesses and generally has more flexibility than public procurement in order for the procurement to align with the business’s commercial objectives.
Who does public procurement law apply to?
The Regulations apply to bodies which are “contracting authorities”. This broadly covers public bodies including government departments, local authorities, police and fire authorities, National Health Service (NHS) trusts and various non-departmental government bodies such as the Competition and Markets Authority.
Different types of public procurement procedures
The contracting authority must follow one of the five award procedures set out in the Regulations – we provide an overview of them below, including minimum time limits for receipt of expressions of interest or tenders from the relevant date.
Open
Under this procedure, all interested parties can submit a tender and negotiation with bidders are not permitted. This procedure is typically only suitable only for straightforward procurements.
Timings: 35 days for receipt of tenders from the date the contract notice was sent or 30 days if the contracting authority accepts electronic submission of tenders. It is important to note that the minimum time will be 15 days where the requirement is urgent.
Restricted
Under this procedure, while interested parties can submit their expression of interest, the contracting authority will only invite those candidates to tender that meet its pre-qualification or selection criteria. The contracting authority must invite a minimum of five qualified candidates (unless fewer have applied).
Timings: 30 days for receipt of requests to tender from the date on which the contract notice was submitted. It is important to note that the minimum time will be 15 days where the requirement is urgent.
Competitive dialogue
Under this procedure, those interested parties who meet the contracting authority’s selection criteria may be invited to participate in dialogue – the contracting authority must invite a minimum of three qualified applicants to enter into discussions. The discussions involve identifying the solution(s) capable of meeting the contracting authority’s needs. This procedure is usually used when innovative solutions are required.
Timings: 30 days for receipt of requests to participate in dialogue from the date the contract notice was sent.
Competitive dialogue with negotiation
Under this procedure, the contracting authority will make a selection based off of those who responded to the advertisement, and they will be invited to submit an initial tender, after which the contracting authority may negotiate with the tenderers. This like competitive dialogue is usually used when innovative solutions are required.
Timings: 30 days for receipt of requests to tender from the date the contract notice was sent, but where the requirement is urgent, this time scale may be reduced.
Innovation Partnership
Under this procedure, a partnership between a contracting authority and an economic operator is set up for the development of an innovative product, service or works which meet the contracting authority’s minimum requirements. Timings: 30 days for receipt of requests to participate in dialogue from the date the contract notice was sent.
Upcoming legislation
Key changes will be made to procurement law as a result of the Procurement Act 2023 which received Royal Assent on 26 October 2023 and is expected to come into force in Autumn 2024, following a six month “go-live” period. Its aim is to simplify the procurement regulatory framework and the conduct of procurement procedures, but it appears to be doing so by substantially rewriting the current UK procurement rules.
Herrington Carmichael can advise on all procurement procedures, as well as with the preparation of tender and contract documents and any queries from bidders during the procurement process. We can also advise on applicable laws and regulation including any preliminary questions you may have in respect of the Act. If you need further advice on any points from this article or more generally on procurement law, please contact our commercial team.
