New procurement rules for Wales

The Welsh Government is consulting on the draft secondary legislation required to implement the new public procurement regime established by the Procurement Bill and, in particular, the transparency provisions and notices which allow contracting authorities to progress procurement processes through the procurement lifecycle. The new regime is expected to take effect in autumn 2024.

The consultation uses the draft statutory instrument that has been developed by the UK Government but identifies key areas of specific differences specific to Wales and takes account of this in the proposed regulations.

The draft statutory instrument provides for the following notices:

Pipeline Notice

The purpose of the pipeline notice is to provide the market with advance notice of anticipated public contract opportunities with an estimated value of more than £2 million which a contracting authority proposes to enter into in the forthcoming 18 months.

Planned Procurement Notice

The planned procurement notice is designed to give as much advance information to the market as possible to enable potential contractors to determine if the upcoming procurement is something that they wish to bid for.

Preliminary Market Engagement Notice

The Bill makes provision for contracting authorities to publish a preliminary market engagement notice to encourage contracting authorities to conduct preliminary market engagement.

Tender Notice

The Bill requires contracting authorities to publish a tender notice to advertise and commence a competitive tendering procedure (including frameworks). A tender notice will act as an invitation to submit a tender for the contract under the open procedure and, could act as an invitation to tender or an invitation for suppliers to submit a request to participate under the competitive flexible procedure. Tender notices are also required in respect of certain below-threshold contracts, where the contracting authority is making the opportunity publicly available.

Utilities Dynamic Market and Dynamic Market Notices

The Bill replaces dynamic purchasing and qualification systems with a single Dynamic Market (DM) which can be established by contracting authorities, including utilities. Utilities can also establish a Utilities Dynamic Market (UDM) for the award of utility contracts. A dynamic market notice is required to be published at various times relating to the establishment of a DM or UDM and when it ceases to operate. A UDM can be established either by reference to a DM notice or a Qualifying Utilities Dynamic Market (QUDM) notice to notify suppliers of the intention to establish a UDM and to provide details of its establishment, modification and termination.

Transparency Notice

The Bill provides that a contracting authority must publish a transparency notice before awarding a contract under the direct award provisions in the Bill in order to inform the market that a contracting authority intends to do so.

Procurement Termination Notice

The procurement termination notice is intended to inform the market that a contracting authority has decided not to proceed with a procurement. It is only necessary to publish this notice if a tender notice or transparency notice had been published for the procurement.

Assessment Summary

The Bill requires that an assessment summary be provided to any supplier that submitted an assessed tender in relation to a competitive procurement but is not required when awarding a call-off contract under a framework. The assessment summary will provide a supplier with the scores awarded for their tender and an explanation as to why particular scores were given against each award criterion. If they are unsuccessful, they will also receive a copy of the winning supplier’s assessment summary, redacted as appropriate.

Contract Award Notice

The contract award notice will notify the market of the outcome of a procurement process (except for those where such a notice is not required) and that a contract (including a framework) is about to be entered into. Subject to some exceptions, it will commence a standstill period. It will not be permissible to enter into a contract without having first published the contract award notice and issued assessment summaries in relation to tenders.

Contract Details Notice

This notice informs interested parties that the contract (including frameworks) has been entered into and various timescales for publication are contained within the Bill depending upon the nature of the contract. Contract details notices are also required in relation to certain below-threshold contracts. For contracts valued over £5 million, the UK draft statutory instrument requires contracting authorities to publish the contract within 90 days (180 days if the contract is a light touch contract). This requirement will not apply to Welsh contracting authorities unless a Welsh contracting authority awards a contract following a procurement under a reserved procurement arrangement.

Payments Compliance Notice

The Bill requires contracting authorities to publish specified information every 6 months, detailing how quickly they have paid their suppliers. The Payments Compliance Notice is intended to replace and strengthen requirements of the Public Contracts Regulations 2015 relating to the payment of invoices.

Contract Performance Notice

Subject to certain exceptions, this notice will record the performance of the supplier against published KPIs and information relating to any serious breach of contract.

Contract Change Notice

The Bill provides that (subject to certain exceptions) a contracting authority must publish a Contract Change Notice for a “convertible contract” or before modifying a public contract. The UK draft statutory instrument will require contracting authorities to publish modified contracts valued over £5 million. This requirement will not apply to Welsh contracting authorities unless a Welsh contracting authority modifies a contract awarded following a procurement under a reserved procurement arrangement.

Contract Termination Notice

The function of this notice is to inform stakeholders that a contract has been terminated and to ensure that the data record in relation to the contract is updated.

The consultation document also considers the following points:

Central Digital Platform

The Cabinet Office is developing a central digital platform for the publication of public procurement notices and documentation. For Wales, notices will be published on Sell2Wales which will feed into this system and will also be available on Sell2Wales itself. Where contracting authorities are required to publish notices and documents, this will be done through the central digital platform via Sell2Wales for Welsh contracting authorities. The draft statutory instrument provides information about the operation of the platform and sets out requirements for how contracting authorities will interact with it. Before a supplier participates in a covered procurement, the draft statutory instrument requires contracting authorities to ensure suppliers are registered on the platform and confirm they have submitted their core supplier information to the platform. All contracting authorities, suppliers and procurement procedures (and their notices) will have a unique identifier on the central digital platform. Contracting authorities will be required to include these unique identifiers in all procurements when publishing notices and other information to the central digital platform. Suppliers bidding for Welsh opportunities will be required to obtain a unique identifier via the Central Platforms Supplier Registration System before they are able to submit their bids.

Transitional Provisions

The Bill contains a power to make transitional provision for the commencement of the Procurement Act. Regulations (yet to be published) will establish the transitional arrangements for procurements already commenced at the time that the new regime enters into force. The consultation document provides that procurements that “start” after the effective date of the new legislation must be conducted by reference to the new regime only. The document provides suggestions as to how these arrangements would operate in practice.

Below threshold contracts (Wales only)

The consultation document considers below threshold contracts even though they are not included within the draft statutory instrument. The document provides that a “notifiable below-threshold contract” is defined in the Bill and that the Welsh Ministers have reconsidered the threshold for central government authorities and intend to introduce regulations to change it to £24,000 including VAT. This is because £12,000 was considered too low due to the potential administrative burden it would create for smaller authorities. For sub-central bodies this figure will remain as £30,000 including VAT as this aligns with previous Welsh policies regarding advertising below threshold contracts.

For Wales, suppliers will be required to register on the Central Platform’s Supplier Registration System in order to bid for notifiable below threshold contracts. This requirement has not been included in the UK draft statutory instrument but will be in the proposed Welsh draft statutory instrument so that suppliers can be allocated a unique identifier.

Contracting authorities who do business in Wales should ensure they are familiar with the provisions of the proposed regulations when they come into force so that they are prepared to apply them in future procurements.

Owen Wilcox is a Senior Associate at Geldards.