Procurement Regulations
Our Procurement team guide you though the regulatory changes affecting public sector procurement.
Procurement Regulations
2024 is set to be a big year for Public Sector Procurement with two major changes to the way that Goods, Works and Services are procured by the Public Sector.
On 1 January 2024 the Health Care Services (Provider Selection Regime) Regulations 2023 were implemented which are designed to:
The second change is the implementation of the Procurement Act 2023 which is a significant focus of the Transforming Public Procurement Programme and replaces the following four sets of regulations:
- Introduce a flexible and proportionate process for deciding who should provide health care services
- Provide a framework that allows collaboration to flourish across systems
- Ensure that all decisions are made in the best interest of patients and service users.
- The Provider Selection Regime must be used by Relevant Authorities when procuring Health Care Services.
- The Public Contracts Regulations 2015
- The Utilities Contracts Regulations 2016
- The Concessions Contracts Regulations 2016
- The Defence & Security Public Contracts Regulations 2011
Procurement Act 2023
With the Procurement Regulations laid in Parliament in March 2024 we are now working towards a ‘go live’ date of 28 October for the Procurement Act. This commenced the six month lead in time and now sees public sector procurement professionals undertaking the learning and development required to understand and apply the new regulations following the go live date.
What will happen on 28 October 2024?
Any Procurement commenced on or after this date will need to be undertaken in accordance with the Procurement Act. This means making use of the new Notices required under the Act and publishing information on the Central Digital Platform (CDP) which will be based on the current Find a Tender Service (FTS) platform.
What does this mean for suppliers?
What happens to procurements that commenced prior to 28 October?
The Cabinet Office Guidance documents are an excellent resource to focus on key elements of the Procurement Act and Procurement Regulations.
What does this mean for buyers?
We are ensuring our procurement colleagues participate in the available L&D and our internal enhanced L&D offer to ensure we continue to deliver compliant framework agreements and to provide high quality support to our wider procurement customers in embedding the Procurement Act within their organisations.
The tender packs we use will be amended to reflect the new regulations and we welcome the increased clarity that the transparency notices will provide.
The introduction of the Act is the biggest change in public procurement for a number of years and it’s an exciting time to work in this environment. Please reach out using the form at the bottom of this page with any Procurement Act queries and we would be glad to help you on this journey.
Other ways to find out more:
Full details of the regime are available at Transforming Public Procurement – GOV.UK (www.gov.uk) and a range of resources are available to spread the message in order to prepare buyers and suppliers for the upcoming changes.
Knowledge Drops are available for contracting authorities, suppliers and Small Medium Enterprise / voluntary, community and social enterprises to introduce the Act. Suppliers may have received the Procurement Act Supplier Letter and we encourage all suppliers to review this and commence preparations for the transition.
- In order to minimise any disruption in your usual practices of identifying and participating in business opportunities, ensure your organisation has a complete and accurate supplier record on CDP as soon as the opportunity becomes available.
- Language and terminology are different in the new Act so be prepared to look and search for different words and phrases. g. Dynamic Marketplaces will become Dynamic markets, with slightly different operating rules. Assessment is no longer based on ‘Most Economically Advantageous Tender’ (MEAT), it will be based on ‘Most Advantageous Tender’ (MAT).
- Tender packs will look different. Familiarise yourself with the new procurement routes available and ensure that if you are considering participating in a competitive flexible procedure, you read the instructions carefully to understand how that particular procedure will be operated – each one could be different.
- In addition to Frameworks, there will be the opportunity to bid for ‘Open Frameworks’. These can be established for up to 8 years in duration and require reopening of competition during the lifetime of the framework. Find out more in the Frameworks Guidance Document.
- If you’re familiar with ‘Open’ tender processes, these will operate in a broadly similar manner under the new regulations. If you’re familiar with ‘Restricted’ tender processes, be aware that this process does not exist in the new regulations – it can, however, be created as a ‘competitive flexible procedure’
- There is fixed guidance on what constitutes ‘commenced procurement’ to enable a clear transition to the new regulations. A Prior information notice does not constitute commencement; however a contract notice does. Full details are in the Transitional Guidance Document.
- Any procedure that has commenced by the go live date will continue under the current procurement regulations and any resulting contract, framework agreement or call off contract would also be in accordance with the current regulations.
Procurement Act Spotlight On...
Procurement Thresholds
As with the current Public Contracts Regulations 2015, the Procurement Act aligns activity to specified value ‘thresholds’ for types of activity and buying organisations. These thresholds will not change on 28 October as they are defined by the World Trade Organisation and updated every two years (on January 1) to take account of currency fluctuations. The UK will then legislate to account for any changes to these thresholds to ensure compliance with the Agreement on Government Procurement.
The Lower thresholds referenced in the Procurement Act in relation to ‘Notifiable Below Threshold Contracts’ are set by UK Government and could be changed as and when the UK government deems necessary.
Provider Selection Regime
Provider Selection Regime (PSR)
PSR is only applicable to Relevant Authorities in England. Relevant Authorities are defined as:
Organisations identified as Relevant Authorities must use the PSR regulations when procuring Health Care Services, or mixed procurements where the main element of the requirement is Health Care Services. Whether or not a Service is in scope of PSR will be determined by the Common Procurement Vocabulary (CPV) code that the service is aligned with. The regulations include the list of CPV codes that are included. There is no value threshold to the application of PSR so all in scope requirements will need to follow the regime.
If you are a Relevant Authority, seeking to procure a service within the PSR codes you will now need to apply the PSR regulations instead of the Public Contracts Regulations 2015 (PCR). The PSR Regulations and Statutory Guidance provide details of how PSR should be applied. NHS England have also developed toolkits and have provided webinars to help embed the regime.
We take a look below at some of the key elements of PSR and what it means for Relevant Authorities.
- NHS England
- Integrated care boards (ICBs)
- NHS trusts and NHS foundation trusts
- Local authorities and combined authorities.
Selection Processes (Regulation 6)
PSR offers three provider selection processes.
If your requirement fits the criteria for direct award processes A or B then you must use the relevant process. You may choose to use direct award C if you met the criteria but you don’t have to.
The most suitable provider process may be used if you meet that criteria but you don’t have to, you could opt to run a competitive process.
The structure provided with these processes may require amendments to current governance processes, with consideration for recording and reporting how the decision or requirement to follow the selected route has been arrived at.
- direct award processes (direct award process A, direct award process B and direct award process C)
- most suitable provider process
- competitive process
Standstill Period (Regulation 12)
The standstill period for PSR allows any provider that is aggrieved by the decision and believes that there has been a failure to comply with PSR regulations to make a written representation articulating their opinion. The regulations and guidance provide a good level of detail on the standstill period which allows eight working days for a representation to be made but the timescale must be very carefully applied – see our spotlight on applying the standstill period.
If a representation is made, there are further obligations and specified timescales in terms of reviewing your decision and responding so when planning a procurement, it’s important to consider the potential timescales required to respond to any representations received.
Transparency
PSR requires the publishing of notices at specified times during a procurement. The notices must be published on Find a Tender Service (FTS) and a guide is available to ensure you use the right notice and provide the correct information to meet the transparency requirements.
Annual Summary and Monitoring Requirements (Regulation 25)
PSR requires Relevant Authorities to maintain records of decisions made when applying PSR and requires the publication of an annual summary relating to the use of PSR within the previous year. It will be critical to be aware of the requirements of the annual summary and maintain relevant records in order to fulfil this obligation.
Framework Agreements
Wondering if you can still utilise NHS SBS’s wide range of healthcare service framework agreements now that the PSR is live? The answer is YES.
The PSR recognises that there are existing framework agreements established under the PCR 2015 which deal with the procurement of health care services, therefore, such framework agreements remain a compliant route to market under the PSR until their expiry date.
Call-off guidance can be downloaded below. For more information on which framework agreements are in scope, please contact the team: nsbs.health@nhs.net
