While the benefits of leaving the European Union may be debatable, one arguable upside comes in the form of the new Procurement Bill, which has departed in several areas from the previous EU procurement directives.
Whilst not universally acclaimed, the Procurement Bill currently meandering its way through our legislative systems does deliver some opportunities, providing greater flexibility in some areas which could be useful from a waste and recycling perspective.
Soft market encouragement
There is renewed emphasis and encouragement in the Bill to carry out pre-procurement soft market engagement – provided this is a transparent process with equal opportunities for all contractors to input, considerable intelligence can be gained by commissioners about how strategic priorities can be best or more realistically accommodated by the market. As long as those involved in the procurement process that follows have the same information provided in the soft market testing, and sufficient time to digest that information, then soft market testing would not undermine the level playing field needed for the procurement.
Current procurement processes used for waste and recycling include competitive dialogue (CD) or competitive procedure with negotiation (CPN)
CD or CPN or you decide!
Typically, current procurement processes used for waste and recycling include competitive dialogue (CD) or competitive procedure with negotiation (CPN). In CD, bidders bring ideas about how the service could be provided in response to commissioners’ high-level requirements and you discuss solutions together.
In CPN, the commissioner should have developed a service specification and some clearly formed ideas, and negotiate with bidders to improve their quality and price proposition. If the commissioner strays too far when negotiating improvement in CD, or revising the specification when bidders suggest alternative solutions in CPN, they can get into hot water because they are no longer following the process they set out. This is one of the cardinal procurement sins and can lead to challenge, or at best just causes significant problems when trying to evaluate bids on a like for like basis and then providing consistent feedback.
The Procurement Bill proposes greater flexibility by allowing procuring entities to design a process which works for them and for the market. Clearly, any process still needs to comply with the basic principles of equal treatment and transparency (to demonstrate there has been equal treatment), but otherwise there is considerable opportunity. During the process itself, commissioners could allow a period in which bidders are able to comment on their ideas for the service, following which the commissioner “locks in” a solution – with a further short period for negotiating improvements to bids on the locked-in solution. As always, the process design must remain commercially attractive to the market – avoiding long and unwieldy processes which are subject to change, encouraging contractors to be increasingly picky about which opportunities to pursue and preventing commissioners from attracting credible candidates other than the incumbent and those with only short track records of being in the sector.
Maximising public benefit – but where’s the detail?
New clauses in the Procurement Bill set a scene in which commissioners will be expected to use procurement not only to deliver value for money, but to maximise public benefit.
There will inevitably be debate and discussion around what “public benefit” means from the point of view of any procuring authority, but we understand that commissioners will need to think about how public money can be used to achieve public benefit through the ways that any contract is delivered (including looking for ways to maximise social, environmental and economic impact).
In the absence of more specific requirements around environmental and social impact, the expectation is that the proposed national procurement policy statement would incorporate expectations around climate change and other environmental concerns, rather than specific requirements in the legislation itself. The public benefit requirements in the Procurement Bill, alongside the potential for a clear policy position from central Government, create the hope of an opportunity for commissioners to drive more positive environmental outcomes, though the devil is, as ever, in the details.
And the conclusion…
Being able to combine the benefits of soft market testing and the current CD and CPN processes could lead to real procurement process improvements. However, even these increased flexibilities will not trump commissioners being able to describe cogently to the market their authority’s vision for the future service. Having an accurate picture of requirements and policy and strategy objectives (including seeking clear public benefit), but being flexible about how to achieve them, will remain crucial to a positive procurement exercise and a successful contract.
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