Agenda item

The Procurement Act 2023 was designed to regulate and standardise the procurement processes across public bodies. It aimed to ensure transparency, fairness, and efficiency in acquiring goods, services, and works.

The Procurement Act 2023 came into effect on 24 February 2025 and included significant changes to the procedures that governed UK procurement. Those changes were intended to create a simpler, more flexible, commercial system that better met the needs while remaining compliant with international obligations.

Leaving the EU provided the UK with the responsibility and opportunity to overhaul the public procurement regulations. The four existing sets of public regulations (The Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations and the Defence and Security Public Contracts Regulations 2011) would be replaced by one set of regulations, namely the Procurement Act, which came into force on 24 February 2025.

Procurements that commenced on or following 24 February 2025 would be regulated by the Procurement Act 2023 and the new rules. Procurement activity since 24 February to date had not been impacted by the new requirements as new procurements had been via frameworks which were compliant, but adoption of the Contract Standing Orders (CSO) would ensure all procurement routes met the requirements in the Act.

The key changes under the Procurement Act were set out below:

a.     Enhanced contract transparency

-        This required all procurement contracts to be made publicly available to ensure openness and accountability. It mandated clear documentation of procurement decisions, rationale, and outcomes. Authorities must begin implementing these transparency measures by March 2025.

b.     Greater pre-market engagement

-        Encouraged dialogue between procuring entities and potential suppliers before formal procurement processes begun. It was aimed at understanding market capabilities and fostering innovation.

c.     Streamlined procurement processes

-        Simplified the steps and requirements involved in procurement to reduce administrative burdens and speed up project delivery. The new streamlined procedures to be adopted by March 2025.

d.     Digitally led procurement

-        Promoted the use of digital platforms and tools to manage procurement activities efficiently. It included online submission of bids, electronic documentation, and digital contract management. LFRS had a new e-tendering system that linked to the Central Digital Platform and ensured we were complying with the electronic tendering requirements as well as allowing us to publish all required tender notices required by law.

e.     Supplier and buyer accountability

-        Established mechanisms to hold both suppliers and buyers accountable for their actions during the procurement process. This included performance monitoring and compliance audits. The accountability framework was effective from March 2025.

f.      Emphasis on public benefit and non-commercial factors

-        Focused on achieving broader social, environmental, and economic benefits through procurement. It encouraged considering factors like sustainability, social value, and ethical practices in decision-making. Local authorities should integrate these considerations into their procurements by March 2025.

g.     New below-threshold procedure

-        Introduceda simplified process for procurements that fall below certain financial thresholds, making it easier and faster to engage smaller contracts. This new procedure came into effect in March 2025.

h.     Central debarment list

-        Implemented a centralised list of suppliers who were banned from participating in public procurements due to past misconduct or poor performance. Local authorities needed to check this list as part of their due diligence from March 2025.

i.       Revised evaluation criteria

-        Updated the criteria used to evaluate bids to ensure they aligned with modern procurement goals such as innovation, sustainability, and value for money. These revised criteria were mandatory for all procurements starting from March 2025.

Lancashire Fire and Rescue Service (LFRS) had made progress against all the changes and adoption of the new CSOs would enable further compliance. Since the implementation of the Act, new procurements had been undertaken via frameworks that met the requirements of the Act. To ensure alternative procurement routes could be undertaken, such as open and negotiated tenders, the CSOs were required to be updated.

A review of the CSOs against the Procurement Act requirements identified several areas that needed updates to meet best practices. The CSOs were revised accordingly, with key changes summarised below:

Threshold Changes

        i.        The new thresholds must also account for VAT to ensure compliance with the Transparency requirements in the Act; these have been updated and rounded accordingly.

Procurement Routes

       ii.        The Act introduced several new procurement routes that included competitive tendering, negotiated procedures, and dynamic purchasing systems. These routes were designed to improve transparency, efficiency, and value for money in public procurement. The Act also included evaluation criteria set by the Cabinet Office. The CSOs had been updated to align with the Act's procurement routes and included amended evaluation criteria from the Cabinet Office, the evaluation criteria summary was set out below:

-        Value for Money: Ensuring the best possible outcome relative to expenditure.

-        Social Value: Considering the impact on local communities and the environment.

-        Supplier Capability: Assessing the ability of suppliers to deliver goods or services effectively.

-        Innovation: Encouraging creative solutions and technological advancements.

Roles, Responsibilities

         iii.    Clarity regarding the roles, responsibilities and sign off procedures were included in the amended CSOs and outlined who was responsible for the contract management in relation to each contract once the contract had been awarded.

Other Changes

         iv.    Reference of old systems and processes had been removed and changes to the layout to ease the readability of the CSOs had been made where appropriate.

The Contract Procedure Rules would be reviewed annually or in line with any necessary legislation changes and would be presented to the CFA’s Corporate Governance Committee for approval.

The Chair asked for assurance that the Contract Standing Orders was as robust as possible. The Head of Finance and Procurement provided assurances that all procurement standards had been met, and the Service had worked with other Fire and Rescue Services to ensure robustness. Laura Rix added that Procurement was included in the audit plan and would be assessed later in the year.

Resolved:-   That the Committee: -

i)         Noted progress with implementing the requirements under the new Procurement Act 2023;

ii)         Approved amendments to the Contract Standing Orders as set out in the report and the revised CSOs in Appendix A.