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Procurement iStock 000002542569XSmall 146x219The Government is consulting on how best to implement the powers in the Small Business, Enterprise and Employment Bill to reform the public procurement process in order to help small businesses. Richard Auton reports.

Hot on the heels of the recent consultation on implementing the new EU Public Procurement Directive (see Draft Public Contracts Regulations published for consultation) is another consultation on how the Cabinet Office can make it as easy as possible for small businesses to bid for public contracts. This latest consultation needs to be read in conjunction with the draft Procurement Regulations to get the full picture of how the reforms will benefit small businesses, as the draft Regulations contain a section implementing Lord Young's reforms to help small businesses. These are:

  • Abolishing PQQs for below-threshold contracts but requiring an award notice to be published on Contracts Finder;
  • Introducing a standardised PQQ for above-threshold contracts. The PQQ will be contained in Cabinet Office guidance;
  • Requiring all public sector contracts (except those from maintained schools or Academies or those that are not advertised in any other way) over £10,000 (central government) or £25,000 (local authorities) to be advertised on Contracts Finder;
  • Requiring that all public contracts (except those awarded by maintained schools or Academies) and sub-contracts contain 30 day payment terms (which will be implied if they are not expressly included).

The latest consultation builds on the reforms in the draft Public Contracts Regulations by adding further duties on contracting authorities in respect of small businesses that may wish to do business with them.

The Small Business, Enterprise and Reform Bill

You would be forgiven for overlooking the fact that, buried within the 230 pages of the Small Business, Enterprise and Reform Bill, which covers a whole gamut of reforms from childcare provision to the pubs code, via streamlining the company registration process and adding new grounds for disqualifying company directors, there is one section that gives the Cabinet Office the power to make regulations imposing duties on contracting authorities as to how they carry out procurements. Such regulations (according to clause 33 of the Bill) "may, in particular, impose:

  • duties to exercise functions relating to procurement in an efficient and timely manner;
  • duties relating to the process by which contracts are entered into (including timescales and the extent and manner of engagement with potential parties to a contract);
  • duties to make available without charge: information or documents; any process required to be completed in order to bid for a contract;
  • duties relating to the acceptance of invoices by electronic means (including a prohibition on the charging of fees for processing such invoices, the publication of reports relating to the number of such invoices received or the electronic systems that must be used by a contracting authority);
  • duties to publish reports about compliance with the regulations."

The Cabinet Office can issue guidance about such regulations, and contracting authorities must "have regard to" any such guidance.

Consultation

The latest consultation is on how best to implement these enabling powers, in particular (a) to (d) (the consultation combines (a) and (b) as "duties to exercise procurement functions in an efficient and timely manner"). It asks some (worryingly) open questions about what small businesses see as the key barriers that regulations and guidance could address. Questions include:

  • Whether the policy that all but the most complex procurements should be delivered within 120 days, which currently applies only to central government procurements, should be extended to all procurements.
  • What is the minimum number of days bidders need to submit a full invitation to tender response for a sub-threshold procurement?
  • Identify specific areas of the procurement cycle (including but not limited to pre-market engagement, commercial strategy, sourcing, tender evaluation, contract management) where you think the public sector can improve.
  • Could extra transparency measures, such as rights for public sector organisations to publish pricing data and contract documents, help deliver efficient and timely procurement processes across the public sector?
  • Is there any justification for charging to access information or documents in order to bid for a public sector contract or to secure accreditation from a public sector body?

Electronic invoicing

Earlier this year, the EU passed a Directive on E-Invoicing in Public Procurement. A data standard for electronic invoicing must be tested and formally referenced in the Official Journal of the EU by 27 May 2017. Clause 33 (d) of the Small Business, Enterprise and Employment Bill (see above) anticipates this and at this stage the consultation is asking some very open questions such as any potential barriers that may prevent the use of electronic invoices, the key points which are essential for delivering an efficient e-invoicing system and whether electronic invoices will ensure that the public sector pays its suppliers more promptly.

Next steps

The consultation is open for four weeks, until 9.00am on 13 November 2014. As the questions are so open-ended, it is an ideal opportunity for both the public and the private sector to help shape Government regulations and guidance in a way that works best for both parties, and to make sure that these reforms dovetail with those set out in the draft Public Procurement Regulations.

Richard Auton is a Director at Walker Morris. He can be contacted on 0113 283 2575 or This email address is being protected from spambots. You need JavaScript enabled to view it.. Richard regularly contributes articles and updates to reach.... ®, the free Walker Morris knowledge database and alerter service.