Will the Government e-learning be available to consultants?

The Knowledge Drops are generally available – see here . We understand that some of the materials will only be available to certain “super-users” – whether consultants are able to access the materials where they are working for the authority will depend on the access arrangements.

What about the pre-selection thresholds for works and using standard selection? Also, what is the situation with regards PAS91 and CAS?

The Act takes the same approach to defining below threshold works contracts as currently in the PCR 2015: ie, for these purposes only, the works threshold is taken to be equal to the appropriate supplies/services threshold for that authority. As with the standard CCS SQ, we await guidance to confirm how PAS91 and CAS will operate under the Act.

Section 22 of the Act states that the criteria may assess legal/financial capacity OR technical ability. Could this also be AND, ie, you could include criteria to assess both?

This is an interesting point. On the face of it, the drafting could be read to require a choice between one or the other, although this would be a departure from the current position under the PCR 2015 where economic/financial standing AND technical/professional ability may be assessed. We will raise a query with the Transforming Public Procurement team and there may be potential for this to be addressed in guidance. Section 22 does state that conditions of participation may only be used if doing so is proportionate to do so having regard to the nature and complexity of the contract; whether to use both will need to be proportionate accordingly.

Can you still require suppliers to have delivered a comparable contract as a condition of participation (albeit not requiring them to have worked with a particular authority)?

Yes, this should be possible subject to the general requirement that any condition of participation must be proportionate having regard to the nature and complexity of the contract. A requirement to have delivered a contract like the one being procured, in terms of value/scope, seems likely to be proportionate. Any condition of participation will need to respect the rules on specifications and equivalents (for example, it would not be lawful to require a supplier to have previously supplied a particular brand of product where alternative products are available that meet the requirements).

Does the new contract subject matter need to be the same or closely related to the bad performance/contract performance notice if considering exclusion?

This is a very interesting question. At present there is nothing in the Act that suggests that the subject matter of the previously poorly performed contract must be related to that which is currently being procured. Schedule 7(12) simply refers to a “relevant contract”, which in turn is defined as one to which a contracting authority or other public body (whether in the UK or outside of it) is a party. There is no requirement in the definition of “relevant contract” for the subject matter to be related. That said, given that suppliers will tend to work in certain sectors and offer particular types of goods/services/works, there is very likely to be a link between the subject matters of the two contracts in question, given that the supplier is the same.

What is the process for challenging the issue of a contract performance notice? What liability or risks are there to a contracting authority for issuing a contract performance notice if challenged?

Further guidance may provide more detail here in due course. There is no stated process for challenging an authority issuing a contract performance notice – beyond that which is generally available to suppliers under the Act for breach of the Act. If a contract performance notice is inaccurate, then potentially a supplier could bring a claim under the Act against the publishing authority for breach of the duty to publish a compliant contract performance notice and more generally for breach of section 12 duties around transparency, proportionality, and equal treatment. The usual 30-day limitation period for a procurement claim would apply and would be likely to start to run from the publication date of the Contract Performance Notice. Such a claim might well be brought alongside a general contract law claim disputing termination for the breach in question. A supplier who was excluded from a procurement based on a defective contract performance notice would presumably notify the contracting authority in the current procurement of the defect. This might well give rise to a duty on that contracting authority to uphold its section 12 duties to act transparently, proportionately, and afford equal treatment, by looking into the detail of the contract performance notice and the supplier’s complaint around it. Of course, a supplier must always be given an opportunity to make representations and demonstrate self-cleaning prior to any exclusion. However, as set out above, where a supplier did not make a timely challenge to the publication of the Contract Performance Notice within 30 days of its publication, it will almost certainly have lost the right to do so now, due to the limitation period. It is possible that this is an area where guidance may be issued from the Procurement Oversight Unit.

Are the changes under the Act likely to increase or decrease the number of contract terminations/exclusions?

This remains to be seen, but it seems likely that the need to refer all exclusions on to the relevant debarment authority for consideration for investigation may make authorities more cautious about exclusions and reserve these for the most clear-cut cases.

What will happen if a supplier is investigated and the relevant debarment authority decides they do not need to be added to the debarment list? Does that undermine the decision made by the contracting authority? Could a supplier challenge based on this?

This will depend on the reason why the supplier is not added to the debarment list at the end of the investigation. It is possible that the debarment authority may agree with the exclusion but still decide not to exclude. More information is needed on the remit and powers of the relevant debarment authority to answer this question. It seems highly unlikely that it will have the power to “overturn” an exclusion decision made by a contracting authority as this is the prerogative of court via a formal claim.

Will the risk of a supplier being added to the debarment list incentivise that supplier to potentially challenge the decision to exclude them, to mitigate them becoming debarred?

Yes, our understanding is that the debarment list will be a publicly available document. It is not yet clear how much direct involvement ministers will have with individual debarment decisions, but it certainly seems likely where the exclusion is for a high profile offence that is politically relevant or sensitive.

The selection stage under the Procurement Act 2023

In this webinar, recorded on 11 January 2024 as part of our Five in Twenty Five countdown series, procurement law experts from Mills & Reeve look at the impact of the Procurement Act 2023 on the selection stage of procurement and answer key questions.

While explaining how the Procurement Act 2023 affects the selection stage, our procurement law experts answered five key questions in the webinar:

Do we always need to run a selection phase?
Can we amend the conditions of participation once the procurement has started?
When can we exclude a bidder for poor performance?
Will a supplier who is excluded from a procurement automatically be added to the debarment list?
What are the rules on setting conditions of participation under the Act? May we use project-specific questions?

You can watch the recording and read answers to questions from the webinar below.

Contacts

Jenny Beresford-Jones

Senior Legal Advisor
Jenny Beresford-Jones

Senior Legal Advisor

+(44)(0)161 235 5422

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Key questions and answers

Several questions were raised during the session, which we have anonymised and answered below.

Please note that the responses provided represent the general views of the public procurement team at Mills & Reeve, however they should not be relied on or treated as a substitute for specific advice relevant to a particular scenario/matter. If you require specific legal advice, our procurement team would be happy to discuss this further with you.

In this information, our view is based on the Procurement Act 2023 (the “Act”) together with the draft regulations accompanying it, which are not yet in final form. The position set out in this note may therefore be subject to change.

Will the Government e-learning be available to consultants?

The Knowledge Drops are generally available – see here. We understand that some of the materials will only be available to certain “super-users” – whether consultants are able to access the materials where they are working for the authority will depend on the access arrangements.
What about the pre-selection thresholds for works and using standard selection? Also, what is the situation with regards PAS91 and CAS?

The Act takes the same approach to defining below threshold works contracts as currently in the PCR 2015: ie, for these purposes only, the works threshold is taken to be equal to the appropriate supplies/services threshold for that authority. As with the standard CCS SQ, we await guidance to confirm how PAS91 and CAS will operate under the Act.
Section 22 of the Act states that the criteria may assess legal/financial capacity OR technical ability. Could this also be AND, ie, you could include criteria to assess both?

This is an interesting point. On the face of it, the drafting could be read to require a choice between one or the other, although this would be a departure from the current position under the PCR 2015 where economic/financial standing AND technical/professional ability may be assessed. We will raise a query with the Transforming Public Procurement team and there may be potential for this to be addressed in guidance. Section 22 does state that conditions of participation may only be used if doing so is proportionate to do so having regard to the nature and complexity of the contract; whether to use both will need to be proportionate accordingly.
Can you still require suppliers to have delivered a comparable contract as a condition of participation (albeit not requiring them to have worked with a particular authority)?

Yes, this should be possible subject to the general requirement that any condition of participation must be proportionate having regard to the nature and complexity of the contract. A requirement to have delivered a contract like the one being procured, in terms of value/scope, seems likely to be proportionate. Any condition of participation will need to respect the rules on specifications and equivalents (for example, it would not be lawful to require a supplier to have previously supplied a particular brand of product where alternative products are available that meet the requirements).
Does the new contract subject matter need to be the same or closely related to the bad performance/contract performance notice if considering exclusion?

This is a very interesting question. At present there is nothing in the Act that suggests that the subject matter of the previously poorly performed contract must be related to that which is currently being procured. Schedule 7(12) simply refers to a “relevant contract”, which in turn is defined as one to which a contracting authority or other public body (whether in the UK or outside of it) is a party. There is no requirement in the definition of “relevant contract” for the subject matter to be related.

That said, given that suppliers will tend to work in certain sectors and offer particular types of goods/services/works, there is very likely to be a link between the subject matters of the two contracts in question, given that the supplier is the same.
What is the process for challenging the issue of a contract performance notice? What liability or risks are there to a contracting authority for issuing a contract performance notice if challenged?

Further guidance may provide more detail here in due course. There is no stated process for challenging an authority issuing a contract performance notice – beyond that which is generally available to suppliers under the Act for breach of the Act. If a contract performance notice is inaccurate, then potentially a supplier could bring a claim under the Act against the publishing authority for breach of the duty to publish a compliant contract performance notice and more generally for breach of section 12 duties around transparency, proportionality, and equal treatment. The usual 30-day limitation period for a procurement claim would apply and would be likely to start to run from the publication date of the Contract Performance Notice. Such a claim might well be brought alongside a general contract law claim disputing termination for the breach in question.

A supplier who was excluded from a procurement based on a defective contract performance notice would presumably notify the contracting authority in the current procurement of the defect. This might well give rise to a duty on that contracting authority to uphold its section 12 duties to act transparently, proportionately, and afford equal treatment, by looking into the detail of the contract performance notice and the supplier’s complaint around it. Of course, a supplier must always be given an opportunity to make representations and demonstrate self-cleaning prior to any exclusion. However, as set out above, where a supplier did not make a timely challenge to the publication of the Contract Performance Notice within 30 days of its publication, it will almost certainly have lost the right to do so now, due to the limitation period. It is possible that this is an area where guidance may be issued from the Procurement Oversight Unit.
Are the changes under the Act likely to increase or decrease the number of contract terminations/exclusions?

This remains to be seen, but it seems likely that the need to refer all exclusions on to the relevant debarment authority for consideration for investigation may make authorities more cautious about exclusions and reserve these for the most clear-cut cases.
What will happen if a supplier is investigated and the relevant debarment authority decides they do not need to be added to the debarment list? Does that undermine the decision made by the contracting authority? Could a supplier challenge based on this?

This will depend on the reason why the supplier is not added to the debarment list at the end of the investigation. It is possible that the debarment authority may agree with the exclusion but still decide not to exclude. More information is needed on the remit and powers of the relevant debarment authority to answer this question. It seems highly unlikely that it will have the power to “overturn” an exclusion decision made by a contracting authority as this is the prerogative of court via a formal claim.
Will the risk of a supplier being added to the debarment list incentivise that supplier to potentially challenge the decision to exclude them, to mitigate them becoming debarred?

Yes, our understanding is that the debarment list will be a publicly available document. It is not yet clear how much direct involvement ministers will have with individual debarment decisions, but it certainly seems likely where the exclusion is for a high profile offence that is politically relevant or sensitive.

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