With the new Procurement Act 2023 (the Act) going live on 28 October 2024, it is important for contracting authorities and bidders alike to consider how procurement decisions should be communicated and challenged under this new legislation. Here, we consider the key changes brought by the new legislation, and their implications. By understanding these changes, public authorities and bidders can better navigate the complexities of procurement disputes and ensure compliance with the revised regulatory framework.
This briefing note deals only with “covered procurements” — that is fully regulated procurements. It does not apply to below threshold procurements.
Time to Bring a Challenge — Section 106
Under the Act, the time limit to challenge a procurement decision has subtly changed. Interested parties must bring a challenge within 30 days from the date they become aware of the circumstances giving rise to the claim (or, in some cases, six months from the date the contract was entered into/modified). The key difference with the old Regulations (PCR, CCR, UCR, DSPCR) is that if the 30-day period ends on a non-working day then it is no longer extended to the end of the next working day.
Communicating Decisions to Bidders — Section 50(3)
Under the current regime, a standstill letter is ordinarily distributed to unsuccessful bidders, notifying them of the outcome of the competition and detailing the scores and advantages of the winning bidder. The method of communicating procurement decisions has evolved under the Act. For competitive procedures, the contracting authority must provide an ‘assessment summary’ to bidders before the award, and publish the contract award notice (section 50(3) of the Act). The Implementing Regulations (Regulation 32) stipulate the information that must be included in the assessment summary. This includes information such as:
- The winner’s details.
- The winner’s score.
- The full award criteria, weightings and assessment methodology.
- How the tender was assessed against the criteria including the score and an explanation or each criterion and sub-criterion.
Equivalent information for the unsuccessful bidder receiving the assessment summary. Government guidance on assessment summaries makes clear how extensive the level of detail is likely to be.
It will be interesting to see how much more detail contracting authorities will give in practice compared with the standstill letters used under the old Regulations. In our view, for authorities that already embraced best practice the assessment summary will not be much more onerous. However, as a result of the changes, the importance of good quality scoring and moderation records cannot be overstated: this information will form the backbone of the assessment summary.
Standstill Period — Section 51
The standstill period under the Act has been revised to eight working days; this calculation excludes bank holidays and weekends. This change addresses practical issues that occur with the current 10-day standstill period, which was often effectively reduced due to weekends and bank holidays being counted for the purpose of the calculation.
For contracts without a mandatory standstill, a voluntary period of at least eight working days can be entered into.
An important practical consideration for contracting authorities is to ensure they allow for all bank holidays throughout the UK. For example, 2 January is a bank holiday in Scotland (but not in England and Wales), so 2 January is treated as a non-working day even if the procurement only relates to England and Wales.
Automatic Suspension — Section 101
The automatic suspension prevents contracting authorities from entering into, or modify, a public contract where court proceedings are under way. Under the Act, this automatic suspension applies where court proceedings are commenced, and the contracting authority is notified, before the standstill period expires. This is a potentially important shift from the old Regulations where the automatic suspension comes into force where proceedings are issued before contract signing.
In essence, this means that a claimant who is seeking to have the contract award overturned will need to start its claim promptly, within the eight working days standstill period.
Consequently, we might see the following actions to try and navigate this fast-paced environment:
- Claimants issuing protective proceedings before the end of standstill so as to protect rights
- Authorities extending the standstill and publishing a revised contract award notice, buying more time to investigate the procurement decision
- Claimants seeking undertakings from contracting authorities not to sign on expiry of the standstill or having to seek an injunction to stop the entering into of the contract.
Certainly, for claimants it will be even more important to make decisions regarding procurement complaints at a very early stage in the standstill period.
The Court can decide to lift this automatic suspension, and will have regard to any relevant matters it considers appropriate, including:
- the public interest in lawfully awarding public contract awards
- avoiding delays in the supply of goods and services
- the interests of suppliers
- the adequacy of damages for the claimant.
This test is subtly different from the tests developed by the courts under the old Regulations and it remains to be seen what practical different this will make.
Remedies — Sections 103-105
The remedies for procurement challenges remain largely unchanged from the current regime, bar that there is a broader scope of conditions which permit for a contract to be set aside post-contract. The claim for set-aside must be brought within 30 days of the claimant’s knowledge — and the court has no discretion to extend this deadline.
Remedies available where the challenge is brought pre-contract signing include:
- Setting aside the authority’s decision.
- Mandating specific actions by the authority.
- Awarding damages.
- Any other appropriate orders the Court deem appropriate.
Remedies available where the challenge is brought after contract signing, include:
- Setting aside the contract or modification under certain conditions (set out below).
- Reducing the contract term, or the scope of goods/services.
- Awarding damages.
Interestingly, the court no longer has an obligation or power to fine contracting authorities as it did when making a declaration of ineffectiveness under the old Regulations.
The conditions for setting aside a contract after contract signing are that the claimant was deprived of proper opportunity to seek a pre-contract remedy because:
- a required contract award notice is not published.
- a contract was entered into or modified before the end of the standstill period.
- the contracting authority breached the automatic suspension or court order.
- In cases of no mandatory standstill, or in the case of modification, the breach only became apparent on publication of the contract award notice or contract change notice.
- where breaches became apparent only after the contract was entered into/modified. This is potentially the most important new ground for set-aside. If contracting authorities avoid providing information before contract signing, they could expose themselves to a set-aside remedy up to six months after contact signing.
It remains to be seen whether the courts will consider that partial compliance with, for example, standstill is enough to show that the claimant was not deprived of proper opportunity to seek its pre-contract remedies.
Conclusion
Whilst the new Act intends to enhance transparency and provide clearer guidelines for challenging procurement decisions, it applies greater time pressure on claimants that seek to challenge the decisions of contracting authorities. It will be interesting to see how claimants and contracting authorities navigate these tighter timeframes, and how contracting authorities will react to their revised duties to communicate decisions with unsuccessful bidders.
Government Commercial Function has published a series of notes, which provide further reading, including on assessment summaries, contract award notices / standstill and remedies.
We’re here to help
Our dedicated Procurement Hub offers access to various online resources, where our leading procurement experts keep you updated during the transition to the new regime. In the coming months, we will continue to brief you on the changes expected at each stage of the procurement lifecycle, specifically addressing the new Act and guidance.
Whether you’re a contracting authority or a bidder frequently tendering for regulated contracts, our team of Procurement specialists is here to assist you through the transition.
Joseph Hill
Solicitor
