Procurement Act 2023: Competitive Flexible Procedure Toolkit

Contracting authorities are not required to publish conflicts assessments. However, in a competitive tendering procedure, they must confirm in the tender notice and the contract details notice that they have prepared and revised, as necessary, any conflicts assessment required.

The concept of a conflict of interest, as defined in the Procurement Act 2023, relates to individual conflicts of interest and does not extend to any existing commercial relationships that could be perceived to create a conflict of interest, such as a perceived preference for supplier A over supplier B. Such "conflicts" are managed by the other provisions in the Act. 

The scope of individual conflicts extends to Ministers of the Crown that "act in relation to" a procurement. This will arise where the Minister "influences a decision made by or on behalf" of the contracting authority. We think this sets a low threshold to requiring conflicts assessments in respect of Ministers.

Under regulation 24 of the Public Contracts Regulations 2015, contracting authorities must take appropriate measures to effectively prevent, identify and remedy conflicts of interest to avoid distortion of competition and ensure equal treatment. A conflict includes situations where relevant staff of have a direct or indirect financial, economic or personal interest that might be perceived to compromise their impartiality and independence. 

Contracting authorities can exclude bidders from procurements where the conflict cannot be effectively remedied by any other less intrusive measures. 

The regulation 84 report that each contracting authority must create to document each procurement it undertakes requires, where applicable, conflicts of interest detected and subsequent measures taken.

Regulation 14 sets out the content requirements for tender notices under the competitive flexible procedure, which are as follows: 

• • the contracting authority information
  • contact details for enquiries about the procedure (name, postal address and email address)
  • the title of the procurement
  • the unique identifier for the procurement
  • a statement that the tender notice is for an award of a public contract through the competitive flexible procedure
  • whether the tender notice is being used to invite tenders for a special regime contract (concessions, defence and security, light touch or utilities)
  • the contract subject-matter
  • estimated contract value
  • if the contracting authority expects that further goods, works or services will be required after expiry of the contract, an estimated date for any subsequent tender notice (if possible)
  • place of supply by reference to the relevant geographical classification
  • description of procurement process to be followed including any negotiation
  • any option to refine award criteria during the procedure and how this will be done
  • any use of electronic auction and technical details for participation in the auction
  • process and deadline for tender submission or requests to participate (as relevant)
  • award criteria (or summary)
  • permitted languages for tenders or enquiries
  • whether the public contract is covered by the World Trade Organisation’s Agreement on Government Procurement (GPA)
  • whether the contract will be awarded via lots and if so, the number of lots, title for each, maximum number that any one supplier may submit tenders for and/or be awarded and the criteria to be used to award multiple lots to one supplier (if relevant)
  • reasons for not using lots where they could be used
  • any limit on number of suppliers in respect of particular tendering rounds or selection process and criteria to be used for down-selection
  • any options for further supplies or term extensions
  • any applicable reduced tendering periods
  • particular suitability (contract or lots) for small and medium sized enterprises or socio-economic value driven non-governmental organisations
  • any reservation of contract to supported employment providers or public service mutuals
  • title of any associated tender documents
  • conflicts assessment confirmation
  • description of (or cross-reference to) technical specifications
  • conditions of participation
  • payment terms (other than implied terms)
  • a description of any risks that may jeopardise satisfactory contract performance but which, due to their nature, may not be addressed in the contract as awarded and which may require subsequent modification (see paragraph 5 of Schedule 8 to the Procurement Act 2023); and
  • any other information that relates to the procurement

Section 21 places an obligation to publish a tender notice when suppliers are being invited to submit tenders for an open procedure or to submit request to participate or tenders for a competitive flexible procedure. This will also apply to competitive tendering procedures used to award contracts under frameworks or dynamic markets although the content requirements for tender notices in those circumstances are notably reduced. 

The one exception to this obligation to publish a tender notice is under a utilities dynamic market which has been established by reference to a qualifying utilities dynamic market notice, where any tender notice must be provided to the members of that dynamic market or relevant part of the market and may also be provide to suppliers that have applied for membership of the market but have yet to have been accepted, but does not have to be published more generally.

To the extent that there are any, a contracting authority must provide any associated tender documents as more particularly specified in the tender notice. 

Associated tender documents are documents which supplement the tender notice and provide information regarding the procurement. There are no prescriptive requirements for this content and it may be in addition to and/or a duplication of the information in the tender notice.  

In practice, associated tender documents are likely to be used as more descriptive documents to set out more of the details of a procurement background and process to be followed than can practically be included in a tender notice, including details on evaluation methodologies and criteria.

The tender notice serves a similar function to a contract notice under regulation 49 of the Public Contracts Regulations 2015 as both serve as notice to prospective suppliers that the contracting authority intends to award a public contract via a competitive procurement process. 

The content requirements for tender notices under the Procurement Act 2023 and contract notices under the Public Contracts Regulations cover broadly similar themes, although there are some additional requirements under the Procurement Act 2023 eg option to refine award criteria; suitability of contract for small and medium sized enterprises or value driven NGOs; reservation of contracts to supported employment providers or public service mutuals; conflicts assessment; non-implied payment terms; and description of risks that may jeopardise satisfactory contract performance. 

Interestingly, there is no explicit reference to contract duration as a content requirement for a tender notice, which appears to be an oversight in the draft secondary legislation. 

Associated tender documents are likely to be treated in a very similar way to “procurement documents” under the existing regime with separate descriptive documents, invitations to tender/negotiate, etc., being used to provide further detail on the procurement process beyond the constraints of the tender notice - e.g. the procedure to be followed, evaluation methodology and detailed criteria. 

There is a similar obligation in terms of the timing for issue/publication of associated tender documents as is currently the case under regulation 53(1) of the Public Contracts Regulations 2015 with a requirement to issue these with the tender notice. This will likely generate similar debate to that which currently exists as to how well developed should these documents and the underlying procurement process be at the time of initial issue/publication. 

There is an argument that all associated tender documents should be published/issued with full details at the time of the tender notice given the obligatory nature of the wording in section 21(3) of the Procurement Act 2023. However, as is currently the case with the competitive dialogue and other tender procedures which involve negotiation, there will inevitably be certain aspects of more complex procurements being run under a competitive flexible procedure which will necessitate that certain details can only be developed and refined over the course of the procurement process. The express ability to retain an option to refine the award criteria through the procurement under section 24 of the Procurement Act 2023 will assist in this regard.

Regulations 13(3)(u), 14(3), 15(3) of the draft Public Procurement (Transparency) Regulations 2024 require that a tender notice must set out whether the contracting authority has provided any associated tender documents, and if so, their title.

A contracting authority doesn’t have to publish any associated tender documents with its tender notice, but it must set out how those documents will be provided in the tender notice and, following this, then provide those documents.

For the competitive flexible procedure, the associated tender documents will essentially set out the procedure that the contracting authority will follow, including the assessment methodology it will use to assess tenders against the award criteria.

Contracting authorities can add further detail to each of the procedures provided for in the Public Contracts Regulations 2015 using procurement documents applying to individual procurements.

A supplier will be an excluded supplier where:

• • one or more of the mandatory exclusion grounds as set out in schedule 6 to the Procurement Act 2023 applies to any of the supplier, a connected person (broadly speaking this covers directors, parent companies or any persons who exert significant influence or control over the supplier) or an associated person ie a person relied upon to satisfy conditions of participation; and
  • the circumstances which give rise to a mandatory exclusion ground are continuing or likely to occur again; or

  • the supplier or an associated person is on the debarment list by virtue of a mandatory exclusion ground.
    
    

A supplier will be an excludable supplier where:

• • one or more of the discretionary exclusion grounds as set out in Schedule 7 to the Procurement Act 2023 applies to
  • the supplier, a connected person or an associated person; and
  • the circumstances which give rise to a discretionary exclusion ground are continuing or likely to occur again; or
  • the supplier or an associated person is on the debarment list by virtue of a discretionary exclusion ground. 
    
    

If a supplier is an excluded or excludable supplier solely because the exclusion grounds apply to an associated person, then – before excluding the supplier – the contracting authority must notify the supplier and give it a reasonable opportunity to replace that associated person. 

Suppliers may also be treated as being excluded or excludable where they intend to sub-contract all or part of the performance of the relevant public contract to a sub-contractor that is itself excluded or excludable. However, where this is the case (and as with associated persons above), the contracting authority must notify the supplier of its intention to exclude and give it a reasonable opportunity to replace the sub-contractor.

There are a number of factors that a contracting authority may have regard to when considering whether circumstances which give rise to an exclusion ground are continuing or likely to occur again, including: 

• • evidence that the supplier, associated person or connected person has taken the matter seriously eg payment of compensation
  • steps that the supplier, associated person or connected person has taken to prevent the circumstances from
  • continuing or recurring eg new staff, management, procedure or training
  • commitment to taking such steps or access to allow verification and monitoring of such steps
  • time elapsed since the circumstances last occurred
  • other appropriate evidence
    
    

Before determining whether a supplier is excluded or excludable, the contracting authority must also give the supplier reasonable opportunity to make representations and provide evidence as regards the application of the exclusion ground(s) and whether they are continuing or likely to occur again. A contracting authority cannot require the production of evidence which is disproportionate to the nature and complexity of the matters under consideration.

The mandatory exclusion grounds are set out in schedule 6 to the Procurement Act 2023 and include a range of criminal offences related to: 

• • corporate manslaughter
  • terrorism
  • theft
  • fraud
  • bribery
  • money laundering
  • labour offences eg modern slavery; refusal to pay minimum wage
  • organised crime
  • tax offences related to tax evasion
  • competition offences – eg cartel.
    
    

There is also an equivalency provision which captures similar offences committed outside the UK. 

Other mandatory exclusion grounds include: 

• • suppliers on the debarment list due to being threats to national security
  • certain VAT offences and abusive practices; and
  • failures to co-operate with investigations into the presence of exclusion grounds.
    
    

Mandatory exclusion grounds exist if they occurred within the past five years and it is worth noting that certain of the offences have retrospective effect ie if they were committed before the Procurement Act 2023 came into force on 26 October 2023.  These include terrorism , bribery, money laundering and modern slavery offences.

The discretionary exclusion grounds are set out in schedule 7 to the Procurement Act 2023 and include: 

• • misconduct in the labour market (certain risk and prevention orders related to modern slavery/human trafficking)
  • environmental offences
  • insolvency
  • potential competition infringements
  • professional misconduct (dishonesty/impropriety)
  • breach of public contract
  • persistent poor performance under a public contract (including where a contracting  authority has published information on poor performance)
  • acting improperly in a procurement process (unfair advantage); and
  • national security threat (but only after notification to a Minister of the Crown).
    
    

Discretionary exclusion grounds exist if the contracting authority was aware or ought to have been aware of them in the past five years (or the past three years for certain grounds including insolvency, professional misconduct, contract breach, notified poor performance and potential competition infringements).

Where a contracting authority has excluded a supplier from participating in or progressing in a competitive procurement or disregarded its tender, it must notify a relevant appropriate authority (Minister of the Crown, Welsh Ministers or Northern Ireland governmental department). 

This notification must be made within 30 days from the date of exclusion or disregarded tender. 

Any such notification may trigger an investigation and report by a Minister of the Crown (or other appropriate authority), leading to the supplier being added to a centrally-managed debarment list (subject to the supplier’s rights to seek interim relief and appeal). 

Inclusion on the debarment list effectively “blacklists” a supplier, excluding them from taking part in any other competitive public procurement procedures.

The existing procurement regime contains similar concepts of mandatory and discretionary exclusion grounds  and - if they exist - an economic operator must or may (respectively) be excluded from a procurement process. 

The types of mandatory exclusion grounds cover broadly the same types of offence and other grounds although there is a notable widening of the offences caught under the Procurement Act 2023 alongside the additional grounds of national security, and ancillary offences of aiding, abetting, conspiring or attempting to commit the relevant criminal offences, as well as equivalency wording to capture offences committed outside the UK. 

The discretionary grounds for exclusion under the Procurement Act 2023 also cover similar topics to those under existing legislation, with notable inclusion around national security and a much clearer and more stringent application of breach of contract and poor contractual performance grounds which are more readily triggerable by a contracting authority. 

Where the Procurement Act 2023 does notably deviate from the existing statutory position (which is mainly reliant on self-reporting and self-cleaning by economic operators) is in the obligation on contracting authorities to notify exclusions and the consequent potential “waterfall” of steps which may result in a central government investigation of suppliers and placing on the centrally-managed debarment list. If a contracting authority concludes that an existing supplier is excluded or excludable, or that supplier is entered onto the debarment list, then it may terminate existing contracts with that supplier.  

This has far-reaching and serious implications for suppliers to contracting authorities, particularly when considered in the context of the strengthened grounds for exclusion around poor contractual performance where notified poor performance under one public contract can trigger a series of consequences resulting in a supplier being unable to bid for a range of public procurement opportunities due to it being placed on the debarment list.

For light-touch procurements, contracting authorities can make substantial changes at any time up to the deadline for submitting tenders.

Where the contracting authority changes the terms of the procurement, it must consider revising the time limits that apply under section 54. This provision includes a specific requirement that contracting authorities have to consider the nature and complexity of any modification of the tender notice or any associated tender documents when revising time limits.

Amendments to the terms of a procurement are not explicitly covered under the Public Contracts Regulations 2015. However, regulation 47 suggests that substantial changes can be made to procurement documents provided that there is an extension of time that is proportionate to the importance of the change and all economic operators are made aware of all the information needed to produce tenders. A substantial change, for the purposes of  regulation 47, would likely be the type of change described as substantial by the Court of Justice of the European Union in pressetext (Case C-454/06). 

The Procurement Act 2023 prohibits substantial changes to the tender notice and associated tender documents for any procurement using the competitive flexible procedure once there has been an initial selection of suppliers invited to participate in the procurement. The test for a substantial change reflects one of the key grounds of the pressetext decision, namely that the changed procurement would have seen other bidders participating or would have seen different suppliers selected to participate in the procurement. As such, previous case law under the Public Contract Regulations is likely to remain of some relevance.

A contracting authority must disregard any tenders from suppliers that do not satisfy the conditions of participation. In practice, this applies only to the open procedure procurement as in multi-stage competitive procurements, suppliers that do not meet the conditions of participation will already have been excluded and not invited to submit a tender.

There are a number of other scenarios where a contacting authority may (but is not obliged to) disregard a tender, including:

• • from suppliers not from the UK or a treaty state (ie signatories to the World Trade Organisation’s General Procurement Agreement (GPA) or certain specified bilateral trade agreements with the UK eg Switzerland, Japan, Canada, Australia)
  • from suppliers who intend to subcontract to suppliers that are not from the UK or a treaty state
  • that offer an abnormally low price – subject to an obligation to notify the supplier and give it reasonable opportunity to demonstrate to the contracting authority’s satisfaction that it will be able to perform the contract for the price offered, or
  • which breach any of the procedural requirements set out in the tender notice or the associated tender documents ie suppliers as well as contracting authorities must follow the rules!

Before entering into any public contract, a contracting authority must:

• • publish a contract award notice stating that the contracting authority intends to enter into the public contract
  • provide an assessment summary to each supplier that submitted an assessed tender, ie all final tenders submitted that the contracting authority has not disregarded under the Act
  • observe a mandatory eight working day standstill period starting with the day the contract award notice is published (or such other longer standstill period as set out in the contract award notice).
    
    

In addition, before entering into any public contract with an estimated value of more than GBP5 million, a contracting authority must normally set at least three key performance indicators in respect of the contract. It need not do so if it considers that it would not be appropriate to assess supplier performance under that contract by reference to key performance indicators.

These key performance indicators will be used for assessment of supplier performance through the life of the contract. This has implications for suppliers, as persistent poor contractual performance may lead to contract termination and the supplier subsequently becoming an excludable supplier.

Regulation 20 of the draft Public Procurement (Transparency) Regulations 2024 sets out the contents of contract award notices, including:

• • the contracting authority information
  • the title of the procurement
  • the unique identifier for the procurement
  • the contract subject-matter in sufficient detail to enable a reader to compare the goods, works or services to those described in any relevant tender notice
  • successful supplier details including:
    • • name
      • contact address (and email)
      • unique identifier for the supplier
      • if the supplier is an association of companies or other consortium
      • if the supplier is an SME
      • if the supplier is a value-driven NGO with socio-environmental objectives; and
      • names of any associated persons or connected persons and their contact details
  • date of award
  • details on any lots, including:
    • • title
      • number
      • description of goods, works or services
      • summary of supply
      • estimated date of supply
      • estimated volume of supply
      • estimated value; and
      • relevant CPV codes
  • detail of procurement procedure used
  • whether it is a special, regime contract (concession, defence and security contract, light touch contract or utilities contract)
  • whether an assessment summary has been provided to all eligible suppliers and if so, when
  • the names of any unsuccessful suppliers (who submitted a tender for assessment)
  • contact details and other details for unsuccessful suppliers including whether they are a consortium, an SME or a value-driven NGO with socio-environmental objectives
  • total number of tenders submitted by deadline for submission
  • estimated contract value
  • title, number and estimated value of any future lots
  • end date of any applicable standstill period or date before which authority has determined not to enter into the contract, and
  • details of any ceased lots including title, number, CPV codes, names of any relevant contracting authorities and date when decided to cease procurement.

Regulation 21 of the draft Public Procurement (Transparency) Regulations 2024 sets out the content requirements for assessment summaries that a contracting authority must provide to each supplier that has submitted an assessed tender.  These include:

• • name of supplier
  • contact address (including email address) for supplier
  • unique identifier for the supplier
  • award criteria for the public contract, either in full or a summary with an indication as to where they are set out in full (tender notice or associated tender document(s))
  • summary of how the tenders were assessed, including any pass/fail requirements that would disqualify a tender
  • score against each award criterion
  • details for the score, including reasons for not achieving a higher score
  • total score
  • explanation as to why tender was unsuccessful (where relevant)
  • details of most advantageous tender including name of successful tenderer, scores awarded, reasons for those scores and total score; and
  • any other information a contracting authority may consider to be relevant.

The obligation to publish a contract award notice applies to all public contracts (including those awarded via a competitive tendering procedure or direct awards) save for:

• • defence and security contracts awarded under a defence and security framework; and
  • directly awarded user choice contracts (i.e. light touch contracts supplied for the benefit of a particular individual).
    
    

The obligation to provide assessment summaries applies whenever a public contract has been awarded via a competitive tendering procedure and must be provided prior to publishing the relevant contract award notice.

The mandatory eight day standstill period applies to all public contracts awarded via a competitive tendering procedure but does not apply to:

• • direct awards
  • call-off contracts under a framework
  • call-of contracts under a dynamic market; or
  • light touch contracts.
    
    

In those cases, a contracting authority may set its own voluntary standstill period in the contract award notice, during which it may not enter into the contract.  Any voluntary standstill period must be at least eight working days.

Within 30 days of entering into a public contract, a contracting authority must publish a contract details notice. This period is 120 days for light touch contracts.

Where a public contract has an estimate value of greater than GBP5 million, contracting authorities must publish a copy of the public contract within 90 days of entering into the contract (180 days for light touch contracts).

The requirement does not apply to contracts awarded by devolved Welsh or transferred Northern Ireland authorities (unless under reserved procurement arrangements) or private utilities, or to directly awarded user choice contracts.

Regulation 22 of the draft Public Procurement (Transparency) Regulations 2024 sets out the content requirements for contract details notices for public contracts awarded via the open procedure or competitive flexible procedure, including:

• • the contracting authority information
  • contact details for enquiries
  • the title of the procurement
  • the unique identifier for the procurement
  • the unique identifier for the contract
  • supplier(s) details including:
    • • name
      • contact address (and email)
      • unique identifier for the supplier
      • if the supplier is an SME
      • if the supplier is a value-driven NGO with socio-environmental objectives
  • procedure used to award the contract
  • contract subject matter in sufficient detail to compare the goods, services or works to those described in the relevant tender notice
  • details on any lots, including:
    • • title
      • number
      • if lot is mainly goods, works or services
      • description of goods, works or services
      • summary of supply
      • estimated date of supply
      • estimated volume of supply
      • estimated value; and
      • relevant CPV codes
  • estimated value of the public contract
  • date of contract award notice publication
  • expiry date of contract
  • description of options to supply additional goods, works or services or for extensions
  • description of any key performance indicators set and frequency of assessment against these
  • explanation of why if key performance indicators were not set for contracts above GBP5 million, and
  • confirmation of conflicts assessment.

Under the existing procurement statutory regime, a public contract may be awarded to the most economically advantageous tender.  Under the Procurement Act 2023, there has been a conscious and deliberate move away from this terminology to refer to the “most advantageous tender” to highlight that contract award is not to be based solely on economic factors and other factors are equally as important including socio-environmental factors and quality.

In practical reality, contract awards under the existing regime already take these other factors into account and regulation 67 of the Public Contracts Regulations expressly refers to e.g. price:quality ratio and the use of environmental and social award criteria. There may actually be little more than a change in nomenclature here.

In terms of the parameters around disregarding tenders, these are relatively similar under the existing statutory regime.  For example, regulations 25A and 25B of the Public Contracts Regulations 2015 oblige a contracting authority to accord equal treatment to economic operators from GPA registered states or states which have entered into relevant trade agreements with the UK.

Regulation 69 of the Public Contracts Regulations 2015 also requires an investigation into any tenders or aspects of tenders which appear to be abnormally low and this is mirrored by the abnormally low price process in the Procurement Act 2023.

The requirement under section 50 to publish a notice of intention to enter into a contract prior to entry into that contract ie the contract award notice, is a new requirement for increased transparency under the Procurement Act 2023.

The use of “contract award notice” is perhaps somewhat confusing as there is a concept of a contract award notice under the Public Contracts Regulations 2015 (and other similar legislation) where this is the name given to the notice that must be published within 30 days of entering into the public contract and which contains the relevant details of that contract award.  Under the Procurement Act 2023, the direct equivalent for this is the contract details notice.

The requirement for an assessment summary to be provided to each supplier that has submitted an assessed tender is similar to the existing requirement for a notification of a decision to award a contract which has to be provided to candidates and tenderers under regulation 86 of the Public Contracts Regulations 2015 – more commonly referred to as the standstill letter or Alcatel letter.  

Both the existing statutory regime and the Procurement Act 2023 have a concept of a mandatory standstill period which must be observed before a contract can be enter into.  The minimum periods for these are very slightly different, being ten clear days under the existing legislation as opposed to at least eight working days under the Procurement Act 2023.  The other key difference is the trigger for this standstill period.  Currently, this period only commences when the notifications of a contract award decision (standstill letters) have been issued to all relevant bidders.  Under the Procurement Act, the trigger for the mandatory standstill period will be later than this, being upon the issue of a contract award notice, which will come after the issue of an assessment summary to relevant tenderers.

Potential exemptions to the requirement for a mandatory standstill period are similar under both statutory regimes and include call-offs under frameworks and dynamic markets (dynamic purchasing systems) and light touch contracts.

One feature of the Procurement Act 2023 which is completely novel and which does not have an equivalent under the existing regime is the requirement to set at least three key performance indicators in respect of any contract with an estimated value greater than GBP5 million and the associated assessment of these.  This is consistent with stated aims for the legislation to allow for closer monitoring of supplier performance and as noted above, may trigger notification obligations where there is persistent poor performance which could lead to a discretionary exclusion ground.