More detail on the UK's procurement transparency ambitions -- some comments and criticisms

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On 30 June 2022, the UK Government’s Cabinet Office published the policy paper ‘Transforming Public Procurement - our transparency ambition’ (the ‘ambitions paper’, or the ‘paper’). The paper builds on the Green Paper and the Government’s response to its public consultation, and outlines ‘proposals to dramatically improve transparency of UK public contracts and spending’. The ambitions paper provides a vision well beyond the scant (almost null) detail in the Procurement Bill (clause 88), which is attracting a number of proposed amendments to try to enshrine in law the basic elements now spelled out in the paper.

In this post, I reflect on the need to amend the Procurement Bill to bind (successive) UK Governments to the current transparency aspirations. I also comment on other aspects of the paper, including persistent issues with the lack of granularity in planned access to procurement data, which I already raised in relation to the Green Paper (see here, Q27 and Q29, and here).

A necessary amendment of the Procurement Bill

The additional level of detail in the paper is welcome and helpful in understanding how the UK plans to operationalise its procurement transparency ambitions. However, a first point to make is that the publication of the ambitions paper should in no way deactivate concerns on the insufficiency of the Procurement Bill to ensure that a significant change in the way procurement information is captured and disseminated in the UK is achieved. In particular, the wording of clause 88(1) has to change.

It is nowhere close to good enough to simply have a weak enabling clause in legislation, stating that ‘An appropriate authority may by regulations make provision requiring certain information to be shared in a particular way, including through a specified online system’. The obvious first shortcoming is that the authority may do so, which also means it may not do so. The second is that the indication of a specified online system as a possible particular way of sharing information seems to take us back quite a few years. If not online (and if not as open data), how would a transparency aspiration be commensurate to the UK’s commitment to e.g. the open contracting data standard?.

Given the high level of aspiration in the paper, a more solid legal grounding is required. My proposal, which builds on discussions with the open contracting community, as well as the amendment already tabled by Baroness Hayman of Ullock, would be to amend clause 88(1) of the Procurement Bill, so it reads:

'An appropriate authority shall by regulations make provision requiring certain information to be shared through a specified online system. Such online system shall, at a minimum, establish and operate a freely accessible, machine-readable and licence-free digital register for all public procurement notices under this Act, wherein all information will be regularly updated in accordance with the time limits for the publication notices set out in the Act.'

Comments on the aspirations paper

Once the general commitment to having single digital register is strengthened, we can move on to consider the detail of what (and how) should be published in the register, what should be kept for restricted use, and what further transparency-related interventions can build upon it—e.g. the creation of a dashboard with useful data analytics, or the interconnection of the register with other sources of e.g. relevant anti-corruption information (for discussion, see here). There are some indications of what the UK aspires to do, but also some lack of clarity in the paper, and some clear risks of undesirable knock-on effects from the maximalist approach to procurement transparency it embraces.

Vision

The aspirations paper indeed starts from a maximalist position, indicating that the vision is ‘to create a fully transparent public procurement system’. However, there are two clear limitations to that approach.

First, the proposal itself includes a proportionate approach to transparency requirements: ‘we want to ensure that we are only asking for the most detailed information - contract documents, performance markings etc - from the largest contracts, in order to maintain transparency without bogging procurement teams down in unnecessary bureaucracy for low-value contracts’. This immediately means that a potentially large volume of (local) procurement will not be subjected to (some aspects) of the new transparency regime. Moreover, as the Procurement Bill stands, there would also be significant exclusions from important transparency obligations e.g. in relation to light touch contracts (see here, section 7, issues #21 on performance-related KPIS and non-performance notices, and #23 on modification notices). That already falls short of generating a ‘fully transparent’ procurement system, precisely in relation to the award of contracts where the risk of capture can be high.

Second, the publication of procurement information remains subjected to the general exclusions and carve-outs resulting from i.a. the Freedom of Information Act 2000 (FOIA). Interestingly, the ambitions paper does not refer to it at all, despite the Green Paper having made clear that, in the absence of FOIA reform (which is not sought), ‘only data which would be required to be made available under FOIA … would be publishable’ (at 167). Regardless of the paper’s silence on the issue, FOIA will continue to play a significant role in establishing which level of detail is disclosed, in particular in relation to disclosure of information not captured as a matter of mandatory disclosure in the relevant (award) notices, and perhaps even in relation to that.

The importance of preserving commercial confidentiality in the procurement setting is clear, and was also a clear focus of concern in the Green Paper consultation, leading e.g. to the Cabinet Office dropping its initial ambition of publishing tenders received in procurement procedures. As the Government’s response stressed: ‘We have considered the potential impact of public disclosure of information, such as (but not limited to) tenders. The feedback we received from stakeholders was that publishing tenders at this stage could prejudice future competitions that may run if the initial one is aborted and re-run for any reason, as bids will have been disclosed to the competition. As a result, we will not require disclosure of tenders submitted in a procurement’ (at 221).

Therefore, the system will not (and should not be) fully transparent. What is more useful is to see what the vision wants to enable in relation to procurement data and related analytics and insights. The vision indicates that the UK Government would like for everyone ‘to be able to view, search and understand what the UK public sector wants to buy, how much it is spending, and with whom’. This is a more realistic aspiration that does not necessarily entail total transparency and, given some safeguards and a more granular approach to the disclosure of differing levels of detail in the information (see here and discussion below), it should be welcome. Ultimately, the Government wants the future platform to help people understand:

  1. current and future procurement opportunities created in the UK public sector; including pipelines of future work. [This should open up opportunities within the public sector to small businesses, driving down prices, increasing innovation and improving the business landscape across the country];

  2. how much money the public sector spends on purchasing essential goods and services. [This should] allow taxpayers to see how much is being spent through procurement on and in their local area, who it is spent with and how it is delivering on local priorities. [Moreover, this should show] which routes to market are available to contracting authorities, and how much has been spent through each of those. [This should] give contracting authorities the data they need to collaborate better, drive value for money and identify cost savings in their procurements, so they can monitor for signs of waste and inefficiency;

  3. which contracts finished on time and on budget–and which did not. [This means providing more detail across] the true lifecycle of government contracts, including how much the final amount spent on a contract differs from its original intended value, or how often contracts have been extended;

  4. which companies have been excluded from winning future work due to fraud, corruption or persistent poor performance; [and]

  5. who is really benefiting from public money - not just the companies winning contracts but the ownership of those companies

This list (which regroups the longer and slightly repetitive list in the paper, as well as aggregate the purpose for the disclosure of specific information) points to three categories. First, a category where the information is purely notice-based (categories 1, 4). Second, a category where the related insights should be easily derived from the information included mandatory notices (categories 2 and 3). Third, a category (mainly 5) that concerns non-procurement information and will require either (a) embedding disclosure obligations in the procurement life-cycle (thus raising the red tape and participation costs), or (b) interconnection with non-procurement databases.

The first category is relatively unproblematic, although there is an inherent tension between the disclosure of planned procurement opportunities and the facilitation of collusive practices (more details below).

The second category probably points at the need of considering the extent to which data dashboards should differentiate between different users, including the level of detail (and timeliness) of the information published in each of them (also discussed below).

The third category points at the need to consider issues of design and interoperability of the platform, as it would be preferable for it to be susceptible of plugging into other databases. Moreover, there are other (anti-corruption) functionalities that could be enabled, such as cross-checks against databases of political donations to identify potentially problematic relationships between procurement awardees and political donors. In relation to this category, and to anti-corruption efforts more generally, the ambitions paper is not particularly ambitious. However, the creation of a solid procurement data architecture on the basis of OCDS could facilitate those extensions in the future.

The future platform

The ambitions paper indicates that the Government seeks to operationalise the new transparency regime through two main elements (as the ‘tell us once’ supplier register is a parallel and distinct intervention):

  • The introduction of a number of new procurement ‘notices’, covering the entire procurement lifecycle from planning through to contract expiry

  • A digital platform which will display all of this information publicly, with API access to data published to the Open Contracting Data Standard (OCDS). Once we have completed the core notice development, over time we also plan to build a number of useful registers, and explore integrating commercial data analysis tools

What this means is that the future platform will initially simply bring into one place what is currently published across a scattered landscape of transparency tools (see section 3.1 in the paper). That is an improvement, but the more significant change will only come when register and dashboard insights get developed. Importantly, however, the design of these registers and dashboards need to be very carefully considered and linked back to the intended (and likely) use by different audiences. However, the ambitions paper does not seem to consider this need and rather seeks to establish a system accessible to any type of data user on an undifferentiated form (see section 4.4).

Research has shown that most of the gains from procurement transparency concern ex ante disclosure of information [M Bauhr et al, ‘Lights on the shadows of public procurement: Transparency as an antidote to corruption’ (2020) 33(3) Governance 495-523]. Conversely, the publication of ex post information is particularly risky in relation to e.g. anticompetitive practices, as well as corruption, and can generate limited benefits as it is unlikely that there will be a sustained level of engagement with that information by most stakeholders with a theoretical motivation to engage in procurement oversight [N Köbis, C Starke and I Rahwan, ‘The promise and perils of using artificial intelligence to fight corruption’ (2022) 4 Nature Machine Intelligence 418-424].

In that regard, it is particularly problematic that the aspirations paper seems to indicate that the UK Government would be publishing (in real time, for everyone to see) information such as: ‘Analysis of bid and win rates, analysis of supplier & bidder beneficial ownership patterns, general market trends analysis’. This should concern regulators such as the Competition and Markets Authority, as well as the Serious Fraud Office. While the latter should absolutely have access to that information and market intelligence, its public disclosure (in detail, with no time lag) could be counterproductive and help, rather than hinder, corrupt and collusive practices. In that regard, it is of paramount importance that those authorities (and others, such as the National Audit Office) are involved in the design of the system—which is not entirely clear from the ‘user-centric’ approach embraced in the aspirations paper (see section 4.1).

A multi-layered level of transparency

In relation to these risks and issues, it is necessary to reiterate a call for a more nuanced and discriminating approach than the one that transpires from the aspirations paper. As stressed in the response to the Green Paper consultation (here Q29), while it can but be endorsed that the platform needs to be created, and the data automatically fed into it in accordance with OCDS and other technical interoperability requirements, a key feature of the new system should be its multi-layered level of access/transparency.

Analysis carried elsewhere (see here) supports a nuanced approach to the level of transparency created by public contract registries similar to the envisaged central digital platform, which needs to fall short of the full transparency paradigm in which it seems to have been conceived. As a functional criterion, only the information that is necessary to ensure proper oversight and the effectiveness of anti-corruption measures should be disclosed, whereas the information that can be most damaging for competition should be withheld.

Generally, what is needed is granularity in the levels of information that are made accessible to different stakeholders. A full transparency approach whereby all information was made available to everyone would fall very short from the desired balance between the transparency and competition goals of public procurement. A system based on enabling or targeted transparency, whereby each stakeholder gets access to the information it needs for a specific purpose, is clearly preferable.

In more specific terms, it is submitted that:

  • The content of the central digital platform should not be fully available to the public. Access to the full registry should be restricted to public sector officials under a strong duty of confidentiality protected by appropriate sanctions in cases of illegitimate disclosure.

  • Even within the public sector, full access to the central digital platform should be made available on a need-to-know basis. Oversight entities, such as the National Audit Office, the Serious Fraud Office, or the Competition and Markets Authority, as well as the new public procurement review unit (PPRU) should have full access. However, other entities or specific civil servants should only access the information they require to carry out their functions.

  • Limited versions of the central digital platform that are made accessible to the public should aggregate information by contracting authority and avoid disclosing any particulars that could be traced back to specific tenders, specific contracts, or specific undertakings.

  • Representative institutions, such as third sector organisations, journalists or academics should have the opportunity of seeking full access to the central digital platform on a case-by-case basis where they can justify a legitimate or research-related interest. In case of access, ethical approval shall be obtained, anonymization of data attempted, and specific confidentiality requirements duly imposed.

  • Delayed full access to the central digital platform could also be allowed for, provided there are sufficient safeguards to ensure that historic information does not remain relevant for the purposes of protecting market competition, business secrets and commercial interests.

  • Tenderers should have access to their own records, even if they are not publicly-available, so as to enable them to check their accuracy. This is particularly relevant if public contract registries are used for the purposes of assessing past performance under the new rules.

  • Big data should be published on an anonymised basis, so that general trends can be analysed without enabling ‘reverse engineering’ of information that can be traced to specific bidders.

  • The entity in charge of the central digital platform should regularly publish aggregated statistics by type of procurement procedure, object of contract, or any other items deemed relevant for the purposes of the public accountability of public buyers (such as percentages of expenditure in green procurement, etc).

  • The entity in charge of the central digital platform should develop a system of red flag indicators and monitor them with a view to reporting instances of legal non-compliance to the relevant oversight entity, or potential collusion to the competition authority. In that regard, the earlier attempts (eg through the abandoned ‘Screening for Cartels’ tool) should be carefully analysed to avoid replicating past errors.

Protecting procurement's AI gatekeeping role in domestic law, and trade agreements? -- re Irion (2022)

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The increasing recognition of the role of procurement as AI gatekeeper, or even as AI (pseudo)regulator, is quickly galvanising and leading to proposals to enshrine it in domestic legislation. For example, in the Parliamentary process of the UK’s 2022 Procurement Bill, an interesting amendment has surfaced. The proposal by Lord Clement-Jones would see the introduction of the following clause:

Procurement principles: automated decision-making and data ethics

In carrying out a procurement, a contracting authority must ensure the safe, sustainable and ethical use of automated or algorithmic decision-making systems and the responsible and ethical use of data.”

The purpose of the clause would be to ensure ‘that the ethical use of automated decision-making and data is taken into account when carrying out a procurement.’ This is an interesting proposal that would put the procuring entity, even if not the future user of the AI (?), in the legally-mandated position of custodian or gatekeeper for trustworthy AI—which, of course, depending on future interpretation could be construed narrowly or expansively (e.g. on whether to limit it to automated decision-making, or extend it to decision-making support algorithmic systems?).

This would go beyond current regulatory approaches in the UK, where this gatekeeping position arises from soft law, such as the 2020 Guidelines for AI procurement. It would probably require significant additional guidance on how this role is to be operationalised, presumably through algorithmic impact assessments and/or other forms of ex ante intervention, such as the imposition of (standard) requirements in the contracts for AI procurement, or even ex ante algorithmic audits.

These requirements would be in line with influential academic proposals [e.g. M Martini, ‘Regulating Algorithms. How to Demystify the Alchemy of Code?’ in M Ebers & S Navas, Algorithms and Law (CUP 2020) 100, 115, and 120-22], as well as largely map onto voluntary compliance with EU AI Act’s requirements for high-risk AI uses (which is the approach also currently followed in the proposal for standard contractual clauses for the procurement of AI by public organisations being developed under the auspices of the European Commission).

One of the key practical considerations for a contracting authority to be able to discharge this gatekeeping role (amongst many others on expertise, time, regulatory capture, etc) is access to source code (also discussed here). Without accessing the source code, the contracting authority can barely understand the workings of the (to be procured) algorithms. Therefore, it is necessary to preserve the possibility of demanding access to source code for all purposes related to the procurement (and future re-procurement) of AI (and other software).

From this perspective, it is interesting to take a look at current developments in the protection of source code at the level of international trade regulation. An interesting paper coming out of the on-going FAccT conference addresses precisely this issue: K Irion, ‘Algorithms Off-limits? If digital trade law restricts access to source code of software then accountability will suffer’ (2022) FAccT proceedings 1561-70.

Irion’s paper provides a good overview of the global efforts to protect source code in the context of trade regulation, maps how free trade agreements are increasingly used to construct an additional layer of protection for software source code (primarily from forced technology transfer), and rightly points at risks of regulatory lock-out or pre-emption depending on the extent to which source code confidentiality is pierced for a range of public interest cases.

What is most interesting for the purposes of our discussion is that source code protection is not absolute, but explicitly deactivated in the context of public procurement in all emerging treaties (ibid, 1564-65). Generally, the treaties either do not prohibit, or have an explicit exception for, source code transfers in the context of commercially negotiated contracts—which can in principle include contracts with the public sector (although the requirement for negotiation could be a hurdle in some scenarios). More clearly, under what can be labelled as the ‘EU approach’, there is an explicit carve-out for ‘the voluntary transfer of or granting of access to source code for instance in the context of government procurement’ (see Article 8.73 EU-Japan EPA; similarly, Article 207 EU–UK TCA; and Article 9 EU-Mexico Agreement in principle). This means that the EU (and other major jurisdictions) are very clear in their (intentional?) approach to preserve the gatekeeping role of procurement by enabling contracting authorities to require access to software source code.

Conversely, the set of exceptions generally emerging in source code protection via trade regulation can be seen as insufficient to ensure high levels of algorithmic governance resulting from general rules imposing ex ante interventions. Indeed, Irion argues that ‘Legislation that mandates conformity assessments, certification schemes or standardized APIs would be inconsistent with the protection of software source code inside trade law’ (ibid, 1564). This is debatable, as a less limiting interpretation of the relevant exceptions seems possible, in particular as they concern disclosure for regulatory examination (with the devil, of course, being in the detail of what is considered a regulatory body and how ex ante interventions are regulated in a particular jurisdiction).

If this stringent understanding of the possibility to mandate regulatory compliance with this being seen as a violation of the general prohibition on source code disclosure for the purposes of its ‘tradability’ in a specific jurisdiction becomes the prevailing interpretation of the relevant FTAs, and regulatory interventions are thus constrained to ex post case-by-case investigations, it is easy to see how the procurement-related exceptions will become an (even more important) conduit for ex ante access to software source code for regulatory purposes, in particular where the AI is to be deployed in the context of public sector activity.

This is thus an interesting area of digital trade regulation to keep an eye on. And, more generally, it will be important to make sure that the AI gatekeeping role assigned to the procurement function is aligned with international obligations resulting from trade liberalisation treaties—which would require a general propagation of the ‘EU approach’ to explicitly carving out procurement-related disclosures.

UK Procurement Bill, general principles and additivity -- why there is no such risk

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Those following the commentary on the UK Procurement Bill will have noticed the discussions concerning the absence of a clause on the general principles of procurement [see e.g. K McGaughey, ‘Losing your principles – some early thoughts on the Procurement Bill’ (13 May 2022) http://shorturl.at/tFJP2]. In fact, there is already a proposed amendment by Baroness Hayman seeking to introduce the principles as initially envisaged in the green paper, which risks losing the additions that resulted from the public consultation. However, it is not certain that the amendment will make it to the final version of the future Act. One of the reasons behind resisting the inclusion of general principles seems to be a concern by legislative drafters that it would generate additivity — which I understand as the risk of creating self-standing obligations beyond those explicitly imposed by the specific provisions of the primary (and future secondary) legislation.

In my view, the inclusion of general principles cannot generate such a risk of additivity, as the role and function of those principles is to act as interpretive guides for the provisions in the legislation. They can hardly be seen as gap fillers or generators of self-standing obligations. Conversely, the absence of such general principles can be problematic, not only for creating a vacuum of interpretive guidance, but also for seemingly signalling a deviation from global standards.

Below are the reasons why I think the general principles of procurement, and in particular those of transparency and competition, should be included in an amended Bill before it completes its Parliamentary procedure.

General principles as global standards

Transparency and competition are crucial and intertwined general principles and/or goals in every procurement legislative framework. However, both are missing in the Procurement Bill, which thus lags international standards and best practice.

The fundamental importance of transparency and competition is recognised at the higher level of international legislation, starting with the United Nations Convention Against Corruption (UNCAC), which Article 9(1) explicitly requires signatory States (including the UK) to ‘take the necessary steps to establish appropriate systems of procurement, based on transparency, competition and objective criteria in decision-making, that are effective, inter alia, in preventing corruption’.

The same applies to the World Trade Organisation Government Procurement Agreement (WTO GPA), which explicitly links to UNCAC and translates its requirements into Art IV(4), which binds its parties (including the UK) to ensure that ‘A procuring entity shall conduct covered procurement in a transparent and impartial manner that: a) is consistent with this Agreement, using methods such as open tendering, selective tendering and limited tendering; b) avoids conflicts of interest; and c) prevents corrupt practices’.

There should thus be no question that the UK is bound under international law to ensure that its procurement is based on principles of transparency, competition and objectivity.

The UNCITRAL Model Law on public procurement also places transparency as a general goal amongst the overarching objectives of any domestic legislation enacting it. The preamble clearly sets out that the enacting State: ‘considers it desirable to regulate procurement so as to promote the objectives of: … (c) Promoting competition among suppliers and contractors for the supply of the subject matter of the procurement; … [and] (f) Achieving transparency in the procedures relating to procurement.’ Even if the Procurement Bill is not enacting the UNCITRAL Model Law, it can reasonably be expected to meet the best practices it highlights, not least because this is a benchmark that will be used to assess the quality of the UK procurement legislation post-reform.

Inclusion of the principle of transparency in the Bill

The intended inclusion of a principle/goal of transparency was clear in the Transforming Public Procurement Green Paper of December 2020 (para 27), and there was no indication of a change of position in the government’s response to the public consultation in December 2021 (para 33). Moreover, the response clarified that ‘The transparency principle previously proposed will set a minimum standard in terms of the quality and accessibility of information where there is a publication obligation elsewhere in the Bill’ (para 35).

The inclusion of an explicit principle of transparency was thus not meant to (or arguably capable of) generating additional self-standing obligations, but simply to establish an interpretive guideline in line with international obligations and best practice benchmarks. If there are concerns that the principle can in itself generate additivity over and above the specific transparency obligations in the Bill, it should be stressed that the existence of an explicit principle of transparency in the Public Contracts Regulations 2015 (reg.18(1)) has not led to an expansion of the transparency duties under the current regime. To the contrary, where such expansion has arguably taken place, it has been on the basis of common law doctrines (see e.g. R (Good Law Project & Others) v Secretary of State for Health and Social Care [2021] EWHC 346 (Admin) [at 132 ff]). 

Moreover, there are safeguards in the Bill preventing a maximalist interpretation of transparency requirements. Clause 85 (General exemptions from duties to publish or disclose information) affords the government the possibility to withhold information for specific purposes. This would thus ensure that there is no risk of additivity from the inclusion of a general principle dictating that data should be made transparent.

The inclusion of the principle of transparency has been supported by the entire spectrum of academic commentators, including those of a pro-deregulation persuasion (e.g. S Arrowsmith ‘Transforming Public Procurement Law after Brexit: Early Reflections on the Government’s Green Paper’ (Dec 2020) at 4). I have also stressed how, in the absence of a reform of e.g. the Freedom of Information Act 2000, the inclusion of a transparency principle will not generate meaningful practical changes to the existing disclosure obligations (e.g. A Sanchez-Graells, ‘The UK’s Green Paper on Post-Brexit Public Procurement Reform: Transformation or Overcomplication?’ (Jan 2021) at 6).

Inclusion of the principle of competition in the Bill

The principle of competition was not included in the Transforming Public Procurement Green Paper of December 2020. However, following submissions by the Competition and Markets Authority and commentators such as myself (see here for details), the government’s response to the public consultation of December 2021 indicated in no ambiguous terms that ‘We will introduce an additional objective of promoting the importance of open and fair competition that will draw together a number of different threads in the Green Paper that encourage competitive procurement’ (para 39).

The inclusion of an explicit principle of competition was thus also not meant to (or arguably capable of) generating additional self-standing obligations, but simply to establish an interpretive guideline in line with international obligations and best practice benchmarks. Similarly to the analysis above in relation to the principle of transparency, the existence of a principle of competition (or a narrower prohibition on the artificial narrowing of competition, as others interpret it) can hardly be seen as capable of generating self-standing obligations (for discussion, see A Sanchez-Graells, ‘Initial comments on the UK’s Procurement Bill: A lukewarm assessment’ (May 2022) 7).

Even where recent UK case law has derived obligations from general principles (R (Good Law Project and EveryDoctor) v Secretary of State for Health and Social Care [2022] EWHC 46 (TCC)), the obligations did not derive from the principle of competition, or the other principles (especially equal treatment) themselves, but from an essentialisation of the general requirements of procurement leading to the identification of ‘an irreducible minimum standard of objective fairness that applies to such procurements, even in the absence of open competition’ (at para 334, see my criticism here). As above, this does not point out to an additivity risk resulting from the general principle of competition, but rather from broader judicial considerations of the proper way in which procurement needs to be conducted.

It is worth reiterating that the importance of the inclusion of the principle of competition in the Bill was underlined by the Competition and Markets Authority, in particular in relation to its interaction with the principle of transparency: ‘Transparency can play a vital role in effective public procurement by dispelling perceptions of favouritism and maintaining trust in the procurement process – which in turn encourages competitors to contest the market. However, higher levels of transparency can also make collusion between bidders easier to sustain ... The CMA considers it essential that public procurement officials are aware of the link between collusion and transparency and report any suspicious activity by suppliers to the CMA. … The CMA proposes that … the new regulatory framework for public procurement should include a further principle of ‘effective competition’: Effective competition - procurement should promote healthy, competitive markets, which in turn drive better value for money and reduce the risk of illegal bid-rigging cartel.’ (at paras 3.2 and 3.3).

The inclusion of the principle of transparency thus needs to be twinned to the introduction of the principle of competition (for discussion of the interaction between the triad of overarching principles of competition, transparency, and integrity, see Steve Schooner, ‘Desiderata: Objectives for a System of Government Contract Law‘ (March 2002) 3 ff).

Implications and final thoughts 

Given the UK’s international commitments and the universal recognition of the importance of enshrining the general principles of transparency and competition in procurement legislation, their absence in the Procurement Bill can:

  1. generate doubts as to the intended transparency and pro-competition orientation of the system—which could be used e.g. in the context of the WTO GPA by trading partners seeking to raise issues with the UK’s position in the agreement; as well as

  2. push for a pro-competition and/or transparency-regarding interpretation of other general goals included in the Bill and, in particular, the ones in clause 11(1)(a) of ‘delivering value for money’, clause 11(1)(c) of ‘sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions’, and clause 11(1)(d) of ‘acting, and being seen to act, with integrity’. Such interpretation could, coupled with common law doctrines and other precedent (as above), generate additional (self-standing) obligations in a way that the more generic principles of transparency and competition may not. And, even if they did, there would be no risk of additivity compared to the original text of the Bill.

There is thus no clear advantage to the omission of the principles, whereas their explicit inclusion would facilitate alignment of the Procurement Bill with the international standards and regulatory benchmarks it will be assessed against. The explicit inclusion of the principles of transparency and competition is thus the preferable regulatory approach.

In my view, the easiest way of ensuring the introduction of both principles would be to alter the amendment proposed by Baroness Hayman as follows (with bold indicating changes or additions):

After Clause 10

BARONESS HAYMAN OF ULLOCK

Insert the following new Clause

“Procurement principles

(1) In carrying out a procurement, a contracting authority must pursue the following principles—

(a) [omit]
(b) value for money, by having regard to the optimal whole-life blend of economy, efficiency and effectiveness that achieves the intended outcome of the business case,
(c) transparency, by acting openly to underpin accountability for public money, anti-corruption and the effectiveness of procurements,
(d) integrity, by providing good management, preventing misconduct, and control in order to prevent fraud and corruption,
(e) equal treatment of suppliers, by ensuring that decision-making is impartial and without conflict of interest,
(f) non-discrimination, by ensuring that decision-making is not discriminatory, and
(g) effective competition, by ensuring that procurement does not artificially narrow competition for a specific contract, promotes healthy, competitive markets, and reduces the risk of illegal bid-rigging cartels.

As there is no good reason why a contracting authority should not be able to act in accordance with those principles, I would advocate for a deletion of the second paragraph of the amendment as proposed.

Initial comments on the UK's Procurement Bill: A lukewarm assessment

Having read the Procurement Bill, its Impact Assessment and the Explanatory Notes, I have some initial comments, which I have tried to articulate in a working paper.

In the paper I offer some initial comments on the Bill and related documents, including: (i) the economic justification in its impact assessment; (ii) some general comments on legislative technique and the quality of the Bill and its Explanatory Notes; (iii) some observations on what may have not been carried over from the Transforming Public Procurement consultation and government response; (iv) a mapping of important aspects of procurement regulation that the Bill does not cover and will thus have to wait for secondary legislation and/or guidance; (v) some general considerations on the unclear impact of different wording for ‘terms of art’, including their interpretation; and (vi) fifty selected issues I have spotted in my first reading of the Bill. I close with some considerations on the difficulty of ensuring a sufficient fix along the legislative process.

In case of interest, the paper can be dowloaded here: https://ssrn.com/abstract=4114141.

More than ever, this is work in progress and I would be grateful for any feedback or discussion: a.sanchez-graells@bristol.ac.uk.

Not a hot take on the UK's Procurement Bill

As anticipated, the UK Government has moved at tremendous speed to introduce the Procurement Bill for Parliamentary passage. The text of the Bill as introduced, and information on the Parliamentary process, are available here.

The Procurement Bill comprises 116 sections and 11 schedules, and it will take some careful reading to identify how the Bill:

  • meets the UK’s international commitments under the WTO GPA, the EU-UK TCA, and other FTAs with procurement chapters;

  • deviates from the current EU-derived Public Contracts Regulations 2015, and the rest of the regulations transposing EU procurement law;

  • embeds the key changes resulting from the Transforming Public Procurement consultation — which will also largely depend on secondary legislation and guidance yet to be published;

  • generates potential interpretative issues that could be ironed out through the Parliamentary procedure; and

  • is likely to work out in practice to deliver the ambitious goals of the UK Government.

So this is not material suitable for a hot take. Sorry to disappoint! I will try to publish a more considered view by the end of the month, although it may take longer… For now, happy reading of the Bill.