Awarding a contract under the Procurement Act 2023
As we continue our series on the new Procurement Act 2023, which will come into force in October this year, we have highlighted some key differences in terminology and requirements for contracting authorities. One of the bigger changes is the way in which the Act deals with the “standstill period”.
Standstill Period
The standstill period is a concept introduced by case law and hence was (and sometimes still is) referred to as the “Alcatel period” after the name of the case that established it. It is currently a ten-day calendar period following notification to bidders of the evaluation results. During that period, there is a moratorium on signing the contract to allow aggrieved bidders to, if they wish, issue proceedings in the High Court for a pre-contract remedy under the Regulations. The authority can only sign the contract once this 10-day period has expired, provided no proceedings have been issued.
The new regime under the Procurement Act will differ slightly. This is how to award a contract following a competitive process under the new Act:
- Send Assessment Summaries to all bidders – each bidder must be given details of the successful bidder, the award criteria used, details of the scoring for themselves and the successful bidder and reasons for the award of those scores.
- Publish a Contract Award Notice on Find a Tender – this is what starts the standstill period and must be sent after sending assessment summaries to bidders. Note that this is not a contract award notice as we know and love them at the moment – a CAN under the new Act is published before contracts are signed and indicates an intent to award.
- Wait eight working days – at first glance, this appears to reduce the standstill period from the current ten-day period. However, in practice, this could result in an increase. For instance, a standstill period beginning on 24 December 2024 would end 14 calendar days later on 7 January 2025, rather than 3 January 2025 (10 calendar days) under the current rules.
- Sign contracts – assuming no proceedings have been issued during the standstill to challenge the award, which would put in place an automatic suspension of the process
- Publish Contract Details Notice on Find a Tender – this is what we currently call a contract award notice and is issued after the contract signature; it provides the market with details of who won the contract, what the contract was for and its value.
- Publish a copy of the contract if over £5m in value – this is part of the wider transparency regime. Note that contracts above this value must also include at least 3 KPIs, and performance against those KPIs must be reported on and published annually.
Standstill applies in more cases
A standstill period is required before entry into any public contract, even where there has been no competitive process, unless the contract falls into one of the exemptions in section 51(3) of the Act. The exemptions include certain types of awards, such as direct awards (but only where this was due to extreme urgency or protection of life) and notably, no standstill period is required for light touch contracts or call-offs from a framework.
Voluntary Standstill
The Act allows authorities to run a “voluntary standstill” following a modification to a contract or where a standstill period is otherwise not mandatory (for example, a light touch contract). What is clear is that if an authority has stated in its contract award notice (or contract change notice, in the case of a modified contract) that it intends to run a voluntary standstill period, then it must do so, and that must be a period of at least eight working days.
Automatic suspension is limited to standstill only
Currently, the issue of a claim form at court at any time before the contract has been signed will put in place an automatic suspension of the process, preventing the authority from signing and proceeding with the contract. This can happen whether or not the official standstill period has expired as long as the contract has not been entered into.
The Procurement Act 2023 appears to change this rule, only allowing the award of automatic suspension if a claim is issued at court within the eight working day standstill period. How this will play out in practice remains to be seen. What if authorities agree with disgruntled bidders to extend a standstill when issues are raised? It is unclear whether agreeing to extend the standstill period will extend the period during which the automatic suspension will apply. For instance, could an agreement not to sign the contract for a period of X days, but expressly not a formal extension of the standstill period, get around this? Indeed, will this encourage more proceedings to be issued protectively to engage the automatic suspension within the tight eight-day working period following the publication of the contract award notice?
The future
Standstill is one of the areas in the Procurement Act 2023 where there are some subtle but key differences from the current regime. It remains to be seen how these differences will play out in practice, but our view is that overall, these changes are to be welcomed as they provide further clarity and opportunity for issues to be resolved before court proceedings are issued.
If you want to discuss any of the changes made by the Procurement Act 2023 or to discuss your training requirements before they come into force, please contact Alison Walton at alison.walton@muckle-llp.com or call 0191 211 7829.