The Procurement Act 2023 (PA23) is expected to come into force in October 2024. In preparation for this the Procurement Regulations 2024 and first tranche of technical guidance have been published. Here we summarise the key points to be aware of.

What are the Procurement Regulations 2024?

These Regulations supplement the main PA23.

In the summer of 2023 the government issued two draft Statutory Instruments for consultation and on 22 March 2024 it published its response to this consultation. The result of this is that these two draft Statutory Instruments have now been consolidated into this single set of Regulations, reflecting the response to the consultation.

What do the Procurement Regulations 2024 cover?

The Procurement Regulations 2024 cover areas such as:

• how core supplier information is to be given to a contracting authority
• the content of notices and other documents such as the “assessment summary” (the new way to debrief bidders)
• what qualifies as a “light touch” service
• disapplying the PA 2023 to regulated health procurement
• defines “central government authorities” and “works”.

There are some areas from the original draft Statutory Instruments which have not been included in the Procurement Regulations 2024; calculations of thresholds used in the vertical and horizontal exemptions and the disapplication of s17 of the Local Government Act 1988. The consultation response says these will be dealt with in separate Statutory Instruments, but remain policy intention.

Next steps for the Procurement Regulations 2024

These Regulations have now been laid before Parliament. They will be debated in the House of Commons and House of Lords before they become law.

What is the technical guidance?

The Cabinet Office is preparing guidance to help prepare for the implementation of the PA23 and have published the first six guidance notes.

There are no major policy changes in the areas covered in these guidance notes, so much of the guidance will be familiar to procurement practitioners. The guidance is, however, an accessible way of working through the provisions of the PA23, explaining terminology and where the rules have been streamlined, so it is worth a read.

We have set out some of the headlines from the six guidance notes below.

Contracting authority definition

All entities that were previously covered by the Public Contracts Regulations 2015 will remain covered (and vice versa), so there is no major change here. The guidance specifically refers to registered providers (RPs) of social housing and confirm that they are considered contracting authorities under the current rules due to the level of oversight exerted over them by the Regulator of Social Housing. This will remain the same under the PA23. As they do currently, RPs will need to consider whether they operate commercially or not. The original purpose of the entity will be a relevant factor here and whether the RP was established to provide services in the public interest e.g. social housing.

Covered procurement definition

This clarifies the terms “covered procurement” (which will capture over-threshold, non- exempt procurement) and the wider term “procurement” (which will cover over-threshold, under-threshold and exempt procurement). It explains that some limited parts of the PA23 will apply to all procurement, such as the National Procurement Policy Statement and non-discrimination obligations.

Valuation of contracts

Valuation of contracts is in line with the existing rules, but the guidance shows how the PA23 streamlines the approach and confirms that contracting authorities should aggregate where they can, unless there is a “good reason”. Examples of “good reasons” are given, such as where this would lead to better value outcomes. It will never be a “good reason” if it is to avoid the procurement rules.

Mixed procurement

The guidance set out how to deal with mixed contracts (e.g. a mixed goods and works contract). There are useful flow-charts in the annexure. The guidance also sets out the new test to be applied here to see if the elements of the contract are “reasonably separable”. If they are not, then the contracting authority will need to look at whether the “main purpose” is works or not.

The guidance confirms that if there are mixed healthcare and non-healthcare elements this “separability” test will again be applied and if the elements cannot be separated then the applicable scheme is determined by highest value.

Exempted contracts

This guidance looks at contracts which are exempt due to the relationship between the contracting authority and the other party. These are referred to as “vertical” and “horizontal” arrangements (what is currently often known as “Teckal” and “Hamburg”). There are some useful diagrams to illustrate these in the annexure.

There is reference to the Procurement Regulations 2024 in relation to the calculation of thresholds for these arrangements, however, this appears to be an error as this has been removed from these Regulations and is to be dealt with under a separate Statutory Instrument, so this guidance may be updated.

The guidance also runs over the list of exempted contracts where the subject matter is exempt such as land purchases and types of legal services. These will be familiar from the current rules, but give some useful examples.

Thresholds

The eagle eyed will have spotted that Schedule 1 of PA23 contains thresholds which are out of date. These were the thresholds which applied when Royal Assent was given. The guidance confirms the thresholds will be updated when the PA23 comes into force to apply the January 2024 thresholds (those applicable under the current regime). The thresholds will continue to be reviewed every two years.

Next steps for the guidance

There will be more guidance to come, with the full suite to be published by the end of June 2024. The next guide should relate to transition. We will be monitoring progress and keeping you informed when anything significant takes place.

How Capsticks can help

Capsticks acts for both contracting authorities and bidders. With extensive knowledge of procurement law, our specialist team are always on hand to support you with all aspects of the procurement process and how to get ready for the new Procurement Act.

Please speak to Katrina Day or Mary Mundy to find out more about how Capsticks can help.