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Moderator – �Michael Bowsher QC�Monckton Chambers & Visiting Professor, King’s College London

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Panelists��Sue Hawley, Executive Director, Spotlight on Corruption�Gavin Hayman, Executive Director, Open Contracting Partnership�Albert Sanchez-Graells, Professor of Economic Law, University of Bristol Law School�Jessica Tillipman, Assistant Dean for Government Procurement Law Studies & Professorial Lecturer in Law, George Washington University Law School�Sope Williams-Elegbe, Professor and Head of Department of Mercantile Law, and Deputy Director of the African Procurement Law Unit, Stellenbosch University�Christopher Yukins, Lynn David Research Professor in Government Procurement Law, George Washington University Law School

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Agenda

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Start: 9:00 US / 14:00 UK / 15:00 CET

Discussion: 90 minutes

Break – 15 minutes

Discussion: 75 minutes

End: 12:00 US / 17:00 UK / 18:00 CET

Materials: www.publicprocurementinternational.com

Please post questions in “Chat” – not Q&A

Update on Legislation

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Queen’s Speech �May 10, 2022

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“A bill will enable law inherited from the European Union to be more easily amended. Public sector procurement will be simplified to provide new opportunities for small businesses.”

Responsible Minister:�Jacob Rees-Mogg, Minister of State for Brexit Opportunities and Government Efficiency

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House of Lords – Second Reading – May 25, 2022

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Procurement Bill:�Scope and Exceptions

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Excluded Contracting Authorities: Devolved Scottish Authorities and Queen Elizabeth (in her personal capacity)

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Key Goals

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Exclusion & Debarment

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54. “Excluded” and “Excludable” Suppliers

A supplier is an “excluded supplier” if—

(a) the contracting authority considers that—

(i) a mandatory exclusion ground applies to the supplier or an associated supplier, and

(ii) the circumstances giving rise to the application of the exclusion ground are likely to occur again, or

(b) the supplier or an associated supplier is on the debarment list by virtue of a mandatory exclusion ground.

A supplier is an “excludable supplier” if—

(a) the contracting authority considers that—

(i) a discretionary exclusion ground applies to the supplier or an associated supplier, and

(ii) the circumstances giving rise to the application of the exclusion ground are likely to occur again, or

(b) the supplier or an associated supplier is on the debarment list by virtue of a discretionary exclusion ground.

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Mandatory & Discretionary Exclusion Grounds�Schedules 6 and 7

Mandatory

• Corporate manslaughter or corporate homicide
• Theft, fraud, bribery etc
• Labour market, slavery and human trafficking offences
• Organised crime
• Tax offences
• Cartel offence
• Ancillary offences
• Offences committed outside the United Kingdom
• An offence under the law of a country or territory outside the United Kingdom which would be an offence otherwise referred to in this Part of this Schedule if the conduct constituting that offence was carried out in any part of the United Kingdom. . . .
• Misconduct in relation to tax
• Competition law infringements
• Equivalents outside the United Kingdom
• Failure to cooperate with investigation
• Excluded matters - 5-year limitation

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Discretionary

• Labour market misconduct
• Environmental misconduct
• A discretionary exclusion ground applies to a supplier if— (a) the supplier or a connected person has been convicted of an offence (whether in or outside the United Kingdom), and (b) the conduct constituting the offence caused, or had the potential to cause, significant harm to the environment, including the life and health of plants and animals.
• Insolvency, bankruptcy, etc
• Potential competition infringements
• Professional misconduct
• Breach of contract and poor performance
• Acting improperly in procurement
• National security
• Excluded matters - 5-year limitation

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55. Circumstances Likely to Occur Again?

(1) In considering, for the purposes of section 54(1)(a) or (2)(a), whether the circumstances giving rise to the application of an exclusion ground are likely to occur again, a contracting authority may have regard to the following matters—

(a) evidence that the supplier, associated supplier or connected person has taken the circumstances seriously, for example by paying compensation;

(b) steps that the supplier, associated supplier or connected person has taken to prevent the circumstances occurring again, for example by changing staff or management, or putting procedures and training in place

(c) commitments that such steps will be taken, or to provide information or access to allow verification or monitoring of such steps;

(d) the time that has elapsed since the circumstances last occurred;

(e) any other evidence, explanation or factor that the authority considers appropriate.

(2) Before determining whether a supplier is an excluded supplier . . . or an excludable supplier . . . a contracting authority must give the supplier reasonable opportunity to—

(a) make representations, and

(b) provide evidence as to whether exclusion grounds apply and whether the circumstances giving rise to any application are likely to occur again . . . .

(3) But a contracting authority may not require particular evidence or information unless the authority is satisfied that the requirements are proportionate in the circumstances, having regard to—

(a) the nature and complexity of the matters being assessed,

(b) the financial and other resources of suppliers, and

(c) where relevant, the preliminary nature of a consideration . . . .

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26. Excluding suppliers from a competitive award

In assessing which tender best satisfies the award criteria . . . a contracting authority must disregard any tender from a supplier that is an excluded supplier.

(2) Before assessing which tender best satisfies the award criteria . . . a contracting authority—

(a) must consider whether a supplier is an excludable supplier, and

(b) may disregard any tender from an excludable supplier.

(3) If the supplier is an excluded or excludable supplier only by virtue of an associated supplier being an excluded or excludable supplier, the contracting authority must, before disregarding a tender, give the supplier reasonable opportunity to replace the associated supplier.

(4) In this Act, “associated supplier” means a supplier that the supplier is relying on in order to in order to satisfy the conditions of participation.

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28. Excluding suppliers by reference to sub-contractors

(1) A contracting authority may, as part of a competitive tendering procedure, request information—

(a) about whether a supplier intends to sub-contract the performance of all or part of a public contract, and

(b) for the purpose of determining whether any intended sub-contractor is an excluded or excludable supplier.

* * * *

(4) Before disregarding a tender or excluding a supplier . . . , a contracting authority must give the supplier reasonable opportunity to find an alternative supplier with which to sub-contract.

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30. Excluding Suppliers for Improper Behaviour

[The contracting authority must treat the supplier as an excluded supplier if] a contracting authority determines that—

(a) a supplier has acted improperly in relation to a procurement,

(b) in consequence, the supplier is put at an unfair advantage in relation to the award of a public contract, and

(c) the unfair advantage cannot be avoided other than by excluding the supplier.

Before making [such] a determination . . . a contracting authority must give the supplier reasonable opportunity to—

(a) make representations, and

(b) provide relevant evidence.

(4) A supplier might act improperly in relation to a procurement by—

(a) failing to provide information requested by the contracting authority;

(b) providing information that is incomplete, inaccurate or misleading;

(c) accessing confidential information;

(d) unduly influencing the contracting authority’s decision-making.

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Debarment Process – Launch

• Within 30 days, contracting authority must give notice to an “appropriate authority” (Minister of the Crown, except Wales) if tender disregarded or supplier found excluded/excludable, or if proceedings regarding exclusion brought (Sec. 56)
• The “appropriate authority” may launch investigation, including requesting documents from contracting authority, and giving notice to supplier of right to provide information and potential ramifications (Sec. 57)
• The “appropriate authority” must prepare report on investigation, and (if the “appropriate authority” chooses (given national security and/or overriding public interest in not publishing sensitive commercial information), give a copy to the supplier and publish the report (Sec. 58):
• Discretionary or mandatory?
• How long will ground apply?
• Will supplier be entered on the debarment list?

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Debarment List (Sec. 59) (summary)

• After investigation, if a Minister of the Crown is “satisfied that the supplier is . . . [per application of an] exclusion ground, an excluded or excludable supplier (including for failure to cooperate in investigation), the Minister may enter the supplier on a debarment list maintained by the Minister
• List must state which exclusion ground applies (mandatory or discretionary), and date that Minister expects ground to cease to apply (when entry will be removed)
• Before entering a supplier on list, notice to supplier must state decision to list, explanation of supplier’s rights to challenge, and other information required by regulations.
• List must be published

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Debarment List: Application for Removal (Sec. 60) and Appeals (Sec. 61)

Application for Removal

(1) A supplier may at any time apply to a Minister of the Crown for the removal of their name from the debarment list . . . .

(2) The Minister is only required to consider such an application if—

(a) in the opinion of the Minister, there has been a material change of circumstances . . . , or

(b) the application is otherwise accompanied by significant information that has not previously been considered by a Minister of the Crown.

Appeals

(1) A supplier may appeal against a decision of a Minister of the Crown—

(a) to enter their name on the debarment list . . .

(b) not to remove their name from the debarment list . . ..

(2) An appeal under subsection (1) must be brought and determined in accordance with regulations made by a Minister of the Crown.

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Questions from Albert Sanchez-Graells:�Debarment

• Is the Procurement Bill claimed emphasis on exclusion and debarment just smoke and mirrors? -- In particular, which are the tangible changes in exclusion and debarment?
• The debarment list seems to be the main difference, but the regime is limited in a few ways:
• The system seems highly dependent on referrals by contracting authorities. However, s.56 is skewed against sub-contractors (based on awareness) but allows significant leeway to primary contractors in that referral only triggered by effective exclusion or disregard of tender, e.g. after a failure to demonstrate self-cleaning (s.55). 
• Debarment due to improper behaviour (Sch.7 para (14) , in relation to s.30) seemingly not covered by duty to refer (why not?)
• Absence of statutory requirements of notification by other bodies and courts (e.g. every time there is a conviction, or a fine is imposed, etc) will do nothing to reduce information costs and barriers
• Absence of interaction with international databases / regard for interaction also likely to diminish the relevance of the changes, even if e.g. foreign convictions and sanctions intended to be relevant for the system (Sch.6 para (40) -- why only in relation to mandatory exclusion grounds?)

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Additional Questions from Albert Sanchez-Graells – Exclusion and Debarment

• How to coordinate secrecy under s.58(5) and obligation to provide notice of inclusion in debarment list under s. 59(5)?
• What is the link/difference between consideration of whether a supplier is excluded or excludable (aka self-cleaning) under s.55 and consideration of 'material change of circumstances' for the purposes of removal from the debarment list under s.60(2)(a)?
• What happens if a contracting authority has referred a supplier for a debarment investigation after having excluded it / disregarded its tender and the debarring authority then decides that the ground does not apply (s.58(4)(a))?
• What happens if a debarment investigation is ongoing and the original exclusion / disregard of the tender is challenged? Does such notice (s. 56(4)) suspend the debarment investigation? Should it? What if it doesn't and the court eventually finds the exclusion /disregard were never justified?

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Conflicts of Interest

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74. & 75. Conflicts of Interest & Duty to Mitigate

Conflict of Interest

• A contracting authority must take “all reasonable steps” to identify and keep under review any actual or potential conflict of interest
• There is a conflict of interest in relation to a procurement if—
• a person acting for or on behalf of the contracting authority (including a person who influences a decision made by or on behalf of the contracting authority) in relation to the procurement has a conflict of interest, or
• a Minister acting in relation to the procurement has a conflict of interest.

Duty to Mitigate

• A contracting authority “must take all reasonable steps (which “may include requiring a supplier to take reasonable steps”) to “ensure that a conflict of interest does not put a supplier at an unfair advantage or disadvantage”
• The contracting authority “must treat a supplier as an excluded supplier” if “a conflict of interest puts a supplier at an unfair advantage” and either (i) the advantage cannot be avoided, or (ii) the supplier will not take steps “the contracting authority considers are necessary”

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76. Conflicts Assessment

• Before “publishing a tender or transparency notice in relation to a procurement,” or a “dynamic market notice in relation to the establishment of a dynamic market,” a contracting authority must prepare a conflicts assessment
• A conflicts assessment must include details of —

(a) conflicts or potential conflicts of interest identified in accordance with section 74 (duty to identify), and

(b) any steps the contracting authority has taken or will take for the purposes of . . . [the] duty to mitigate

• If a contracting authority is aware of circumstances “that might cause a reasonable person to wrongly believe there to be a conflict or potential conflict of interest, a conflicts assessment must also include details of any steps the contracting authority has taken or will take to demonstrate that no such conflict or potential conflict exists.”
• A contracting authority must—

(a) keep any conflicts assessment under review,

(b) revise the assessment as necessary, and

(c) “when publishing any relevant notice, confirm that a conflicts assessment has been prepared and revised in accordance with this section.”

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Link

1. Limit all the exemptions so we have a single rulebook for UK procurement
2. Add in a clear objective/principle on transparency for procurement like the rest of the world
3. Clearly reference digital tools, open data and a unified register for contracting information in the legislation
4. Clearly reference and empower the planned Procurement Review Unit
5. Add a duty to consider planned procurement notices and pre-market engagement notices, like duty to consider ‘lots’.
6. Tighten the language on disclosure exemptions in relation to commercial confidentiality.
7. Tighten supplier exclusion and debarment register provisions
8. Add key Boardman Review recommendations into the conflict of interest provisions
9. Make clearer provisions for an improved dispute resolution regime focussed on fixing procurements as opposed to litigation in the courts
10. Avoid reliance on “regulatory dark matter” and ministerial discretion (especially without a countervailing duty of transparency)

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Questions from Albert Sanchez-Graells

• How can the Procurement Bill allow for the adoption of digital technologies to screen for corruption risks? (see Flexibility, discretion and corruption in procurement: an unavoidable trade-off undermining digital oversight? — How to Crack a Nut)?�
• OCDS [Open Contracting Data Standards] may have a positive effect on data availability, although important issues remain shielded from transparency requirements (e.g. below threshold framework call-offs, awards under dynamic markets--and those are the 'commercial vehicles' expected to attract larger volumes of expenditure)
• Moreover, the possibility of developing effective red flags will be undermined by issues that atomise 'normalcy benchmarks'
• Reduced standardisation (both procedural and in terms of e.g. documentary requirements)
• Increased space for discretionary deviations from standard requirements
• Increased space for negotiation, including iterative negotiations (multiple rounds with or without shortlisting, BAFO, etc)
• In the absence of automation of these screens, any ambitious approach to corruption and screening seems out of the question (see e.g. Green Paper response on how the PRU 'will primarily act on the basis of referrals from other government departments or data available from the new digital platform', which already indicates limited to no capacity to undertake separate qualitative analysis / screening

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Remedies – �Bid Challenges

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48. Contract Award Notices & Assessment Summaries

(1) Before entering into a public contract, a contracting authority must publish a contract award notice.

(2) A “contract award notice” means a notice setting out— (a) that the contracting authority intends to enter into a contract, and (b) any other information specified in regulations . . . .

(3) Before publishing a contract award notice in respect of a contract awarded under . . . competitive procedure, a contracting authority must provide an assessment summary to each supplier that submitted an assessed tender.

(4) An “assessment summary” means, in relation to an assessed tender, information about the contracting authority’s assessment of—

(a) the tender, and

(b) . . . the most advantageous tender . . . .

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AWARD NOTICE

49. Standstill Period

49 Standstill periods on the award of contracts

1. A contracting authority may not enter into a public contract before . . . the end of the mandatory standstill period . . . .

(2) The “mandatory standstill period” is the period of eight working days beginning with the day on which a contract award notice is published . . . .

(3) Subsection (1) does not apply in relation to a contract that is—

(a) awarded under . . . (direct award: extreme and unavoidable urgency);

(b) awarded under . . . (direct award to protect life, etc);

(c) awarded in accordance with a framework;

(d) awarded by reference to a dynamic market;

(e) a light touch contract.

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89. Duties under the Act enforceable in civil proceeding

(1) A contracting authority’s duty to comply with Parts 1 to 5, 7 and 8 [Part 6 is “below-threshold contracting”] is enforceable in civil proceedings . . . .

(2) For the purposes of this Part, the duty is owed to any supplier that is—

(a) a United Kingdom supplier, or

(b) a treaty state supplier.

(3) Proceedings under this Part may be brought in the court by a supplier that—

(a) is a United Kingdom or treaty state supplier, and

(b) has suffered, or is at risk of suffering, loss or damage in consequence of a breach of the duty.

“the court” means— (a) in England and Wales, the High Court . . . . .

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90. Automatic suspension of the entry into or modification of contracts

(1) A contracting authority may not enter into a public contract, or modify a public contract or a convertible contract, if—

(a) proceedings under this Part have been commenced in relation to the contract, and

(b) the contracting authority has been notified of that fact.

(2) The court may lift or modify the restriction in subsection (1) by order . . . .

(3) The restriction in subsection (1) does not apply if the contracting authority was notified of the commencement of proceedings after the end of any applicable standstill period . . . .

(4) The restriction in subsection (1) does not apply if— (a) the proceedings at first instance have been determined, discontinued or otherwise disposed of, and (b) the court has not made an order to extend the restriction. . . .

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92. Pre-Contractual Remedies

(1) This section applies if the court is satisfied that a decision made, or action taken, by a contracting authority breached the duty referred to in section 89(1) [duty to comply with the Act] and—

(a) the contract in relation to which the breach occurred has not been entered into, or

(b) where the breach occurred in relation to a modification of a contract, the modification has not yet been made.

(2) The court may make one or more of the following orders—

(a) an order setting aside the decision or action;

(b) an order requiring the contracting authority to take any action;

(c) an order for the award of damages;

(d) any other order that the court considers appropriate.

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International Trade

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81. Treaty State Suppliers

• Schedule 9 includes a list of trade agreements touching on procurement, including the WTO Government Procurement Agreement (1994, as amended), and the UK-EU Trade and Cooperation Agreement (Dec. 2021)
• A contracting authority may not . . . discriminate against a treaty state supplier.
• A contracting authority “discriminates against a treaty state supplier if it treats the supplier less favourably than it treats, or would treat, a United Kingdom supplier or other treaty state supplier because of—

(a) the supplier’s association with the supplier’s treaty state, or

(b) the supplier’s lack of association with—

(i) the United Kingdom, or

(ii) another treaty state.”

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Excluding Foreign Vendors

Per Article 18:

In assessing which tender best satisfies the award criteria, a contracting authority . . .

(b) may disregard any tender from a supplier that—

1. is not a United Kingdom supplier or treaty state supplier, or
2. intends to sub-contract the performance of all or part of the contract to a supplier that is not a United Kingdom supplier or treaty state supplier;

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Sec. 19 – Excluding Tenderers

A competitive tendering procedure other than an open procedure may provide for the exclusion of suppliers—

1. by reference to conditions of participation . . .;
2. by reference to an intermediate assessment of tenders;
3. that are not United Kingdom suppliers or treaty state suppliers;
4. that intend to sub-contract the performance of all or part of the contract to a supplier that is not a United Kingdom supplier or treaty state supplier

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Ensuring Integrity in Procurement Practices

1. Each Party shall ensure that criminal or administrative measures exist to address corruption, fraud, and other illegal acts in its government procurement.
2. These measures may include procedures to render ineligible for, or exclude from, participation in the Party’s procurements, either indefinitely or for a stated period of time, suppliers that the Party has determined to have engaged in corrupt, fraudulent or other illegal acts in relation to government procurement in the Party’s territory. When applying those procedures, each party, including its procuring entities: (a) may consider the gravity of the supplier’s acts or omissions, and any remedial measures or mitigating factors; and (b) shall treat a supplier of the other Party with due process, in accordance with its government procurement policies and frameworks.
3. Each Party shall also ensure that it has in place policies and procedures to eliminate to the extent possible or manage any potential conflict of interest on the part of those engaged in or having influence over a procurement.
4. Each Party may put in place policies or procedures that require successful suppliers to maintain and enforce appropriate measures, such as internal controls, business ethics, and compliance programmes, for preventing and detecting corruption, fraud, and other illegal acts, provided they are nondiscriminatory.

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Contract Formation

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84. Pipeline Notices

Any “contracting authority that considers that, in the coming financial year, it will pay more than £100 million under relevant contracts,” must “publish a pipeline notice,” i.e., “a notice setting out specified information about any public contract with an estimated value of more than £2 million” regarding which the “contracting authority intends to publish a tender notice or transparency notice” during the reporting period.

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Equal Treatment

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15. Preliminary Market Engagement

1. Before publishing a tender notice in respect of a public contract, a contracting authority may engage with suppliers and other persons for the purpose of—
1. developing the authority’s specifications and approach to the procurement;
2. designing a procedure, conditions of participation or award criteria;
3. preparing the tender notice and associated tender documents;
4. identifying suppliers that may be able to supply the goods, services or works required;
5. identifying likely contractual terms;
6. building capacity among suppliers in relation to the contract being awarded.

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15. Preliminary Market Engagement – �Possible Exclusion (“Organizational Conflict of Interest”)

(3) In carrying out preliminary market engagement, a contracting authority must take steps to ensure that—

1. suppliers participating in the preliminary market engagement are not put at an unfair advantage, and
2. competition in relation to the award of the public contract is not otherwise distorted.

(4) Subsection (5) applies if a contracting authority considers that— (a) a supplier’s participation in preliminary market engagement has put the supplier at an unfair advantage in relation to the award of a public contract, and (b) the advantage cannot be avoided.

(5) The contracting authority must treat the supplier as an excludable supplier in relation to the award of the contract.

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17. Duty to Consider Lots

1. Before publishing a tender notice in respect of a public contract, a contracting authority must consider—
1. whether the goods, services or works to be supplied under the contract could reasonably be supplied under more than one contract, and
2. whether such contracts could appropriately be awarded by reference to lots.

(2) If the contracting authority considers that the goods, services or works could reasonably be supplied under more than one contract and such contracts could appropriately be awarded by reference to lots, the authority must— (a) arrange for the award of the contract or contracts by reference to lots, or (b) provide reasons for not doing so.

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Sec. 19 – Competitive Tendering Procedures

(1) Before awarding a public contract . . . a contracting authority must carry out a competitive tendering procedure . . . .

(2) A “competitive tendering procedure” is—

1. a single-stage tendering procedure without a restriction on who can submit tenders (an “open procedure”), or
2. such other competitive tendering procedure as the contracting authority considers appropriate for the purpose of awarding the public contract.

(3) A contracting authority must ensure that the procedure is a proportionate means of awarding the public contract, having regard to the nature, complexity and cost of the contract.

(4) A competitive tendering procedure other than an open procedure—

1. may limit the number of participating suppliers, generally or in respect of particular tendering rounds or other selection processes;
2. may provide for the refinement of award criteria . . . .;
3. may not permit the participation of suppliers that did not submit a tender in the first round of tendering or that were excluded following an earlier round.

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22. Award Criteria

In setting award criteria, a contracting authority must be satisfied that they—

(a) relate to the subject-matter of the contract,

(b) are sufficiently clear, measurable and specific,

(c) do not break the rules on technical specifications in section 24, and

(d) are a proportionate means of assessing tenders, having regard to the nature, complexity and cost of the contract.

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24. Technical Specifications

The terms of a procurement may not refer to design, a particular licensing model or a description of characteristics in circumstances where they could appropriately refer to performance or functional requirements.

(2) The terms of a procurement may not refer to United Kingdom standards unless—

(a) there is no internationally-recognised equivalent, and

(b) they provide that tenders satisfying equivalent standards from other states or regions will, for the purposes of this Part, be treated as having satisfied the United Kingdom standards.

(3) Unless the contracting authority considers it necessary in order to make its requirements understood, the terms of a procurement may not refer to a particular—

(a) trademark, trade name, patent, design or type,

(b) place of origin, or

(c) producer or supplier.

(4) If such matters are referred to, the terms of the procurement must also provide that tenders demonstrating equivalent quality or performance will not be disadvantaged.

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25. Sub-contracting Specifications

In awarding a contract . . . following competitive procedure . . . the contracting authority may require that a supplier sub-contracts the supply of those goods, services or works to [a] particular supplier.

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85. General exemptions from duties to publish or disclose information

(1) A contracting authority is not required to publish or otherwise disclose information . . . if the authority is satisfied that—

• withholding the information from publication or other disclosure is necessary for the purpose of safeguarding national security, or
• the information is sensitive commercial information and there is an overriding public interest in its being withheld from publication or other disclosure.

(2) “Sensitive commercial information” is information which—

(a) constitutes a trade secret, or

(b) would be likely to prejudice the commercial interests of any person if it were published or otherwise disclosed.

(3) If a contracting authority withholds information under this section, the authority must publish or notify anyone to whom the information would otherwise be provided of—

(a) the fact that information is being withheld, and

(b) whether it is being withheld under subsection (1)(a) or (1)(b).

(4) A contracting authority is not required to publish or notify someone under subsection (3) if the authority is satisfied that it would be contrary to the interests of national security to do so.

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40. Direct Award to an Excluded Supplier

If there is an “overwhelming public interest,” i.e.,

a) it is necessary in order to construct, maintain or operate critical national infrastructure,

(b) it is necessary in order to ensure the proper functioning of a sector on which the defence, security or economic stability of the United Kingdom relies,

(c) failure to do so would prejudice the conduct of military or security operations, or the effective operation of the armed forces or intelligence services, or

(d) the contract is being awarded [because of] extreme and unavoidable urgency and cannot be awarded to . . . a supplier that is not an excluded supplier within the necessary time frame.

42. Must publish notice of intent to award

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Dynamic Markets

• Sec. 35: Dynamic markets: establishment: (1) A contracting authority may establish arrangements (a “dynamic market”) for the purpose of awarding public contracts by reference to suppliers’ membership of the market. . . . (3) A contracting authority that is a centralised procurement authority may also establish— (a) a dynamic market for the purpose of other contracting authorities awarding public contracts by reference to suppliers’ membership of the market; . . . (7) Documents establishing or modifying a dynamic market are not a public contract for the purposes of this Act.
• Sec. 34: A competitive tendering procedure may provide for the exclusion of suppliers that are not members of— (a) a particular dynamic market, or (b) a particular part of a particular dynamic market.
• Sec. 34: A contracting authority must, before excluding suppliers or disregarding tenders under this section, consider any applications for membership of the market or part of the market from suppliers that have submitted a tender as part of the competitive tendering procedure [unless], due to exceptional circumstances arising from the complexity of the particular procurement, a contracting authority is unable to consider the application before— (a) the deadline for submitting a request to participate in the procedure, or (b) where there has been no invitation to submit . . . , the deadline for submitting a . . . tender.

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Dynamic Markets (continued)

36. Dynamic markets: membership

(1) A contracting authority may set conditions for membership . . . only if it is satisfied that the conditions are a proportionate means of ensuring that members—

(a) have the legal and financial capacity to perform contracts awarded by reference to membership of the market or the part of the market; (b) the technical ability to perform such contracts.

(2) A contracting authority must—

(a) accept applications for membership of a dynamic market . . . at any time during the term of the market; (b) consider such applications within a reasonable period; (c) admit to the market . . . as soon as reasonably practicable, any supplier that— (i) is not an excluded or excludable supplier, and (ii) satisfies the conditions for membership . . . .

(3) A contracting authority may not— (a) limit the number of suppliers that can be admitted to a dynamic market or part of a market, or (b) modify the conditions for membership of a dynamic market or part of a market during the term of the market.

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Dynamic Markets (continued)

38. Fees

Documents establishing a dynamic market . . . may provide for the charging of fees to suppliers that are awarded a contract by reference to their membership of the market.

Fees charged . . . must be set as a fixed percentage to be applied to the estimated value of the awarded contract.

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44. Frameworks

A “framework” is 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.

(3) Unless subsection (4) applies, a framework may only provide for the future award of a public contract following a competitive selection process.

(4) A framework may provide for the future award of a public contract without competition between suppliers—

(a) in circumstances where only one supplier is party to the framework, or

(b) if the framework sets out—

(i) the core terms of the public contract, and

(ii) an objective mechanism for supplier selection.

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Framework Agreements

• Limited to 4 years (8 years if defence/security) – unless the contracting authority considers a longer term is required.
• “Open frameworks”: a “scheme of frameworks that provides for the award of successive frameworks on substantially the same terms”
• 3 years (initial) / 5 years (subsequent) = 8 years maximum

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51. Contract Details Notice and Publication of Contracts

(1) A contracting authority that enters into a public contract awarded under this Part must publish a contract details notice—

(a) if the contract is a light touch contract, [within] 120 days . . . ;

(b) otherwise, [within] 30 days . . . .

(2) A “contract details notice” means a notice setting out—

(a) that the contracting authority has entered into a contract, and

(b) any other information specified in regulations . . . .

(3) Before the end of . . . 90 days beginning with the day on which a contracting authority enters into a public contract with an estimated value of more than £2 million, the authority must publish a copy of the contract.

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Contract Administration

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Payments (Secs. 62-64)

• Contracting authorities must process electronic invoices which are in proper form and uncontested (Sec. 62)
• Must pay within 30 days (or shorter period, if agreed) (Sec. 63)
• Contracting authority must publish “payments compliance notice” (Sec. 64)
• Same payment terms to be read into public sub-contracts (Sec. 68)

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66. Contract Performance Reports (summary)

• For contracts over £2 million, “a contracting authority must set and publish at least three key performance indicators in respect of the contract” (Sec. 50)
• Every 12 months and on termination, contracting authority must “(a) assess performance against the key performance indicators, and (b) publish information specified in regulations . . . in relation to that assessment” (Sec. 66)
• If supplier breaches contract, which results in termination, damages, or a settlement agreement, or if the supplier is performing poorly, been given an opportunity to remedy and has failed to do so – the contracting authority must publish a notice, giving circumstances and any other information specified by regulations (Sec. 66)

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Modifications (summary)

• May modify a public contract (Sec. 69) if:
• Not “substantial modification,” i.e., is a modification which would—
1. increase or decrease the term of the contract by more than 10 per cent of the maximum term provided for on award,
2. change the overall nature of the contract or materially change its scope, or

(c) materially change the economic balance of the contract in favour of the supplier.

• “Below threshold,” i.e.,

(a) the modification would not itself increase or decrease the estimated value of the contract by more than—

(i) in the case of a contract for goods or services, 10 per cent;

(ii) in the case of a contract for works, 15 per cent,

(b) the aggregated value of below-threshold modifications would be less than the threshold amount for the type of contract,

(c) the modification would not change the scope of the contract, and

(d) the modification is within permitted modifications under Schedule 8 (e.g., impossibliilty of performance due to known risk; assignment/novation), and is not “substantial”

• Before modifying, must publish notice -- unless minor (Sec. 70)

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Implied Right to Terminate Contracts (Sec. 71) (summary)

• Implied right to terminate any public contract if:
• The contracting authority considers that the contract was awarded or modified in material breach of this Act or regulations made under it;
• Supplier must be notified and given opportunity to be heard
• Restitution terms may be included in contract; may not eliminate right
• a supplier has, since the award of the contract, become an excluded supplier or excludable supplier (including by reference to an associated supplier);
• a supplier (other than an associated supplier) to which the supplier is sub-contracting the performance of all or part of the public contract is an excluded or excludable supplier.

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Conclusion

Materials at www.publicprocurementinterational.com

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