Accelerating Delivery Under New Development Partnership Procurement Rules

Today (Monday, 24th February), the procurement landscape for Public-Private Partnerships (PPPs) will change. Any public authority looking to realise its development ambitions via partnerships with private sector partners will, in most cases, need to follow new rules, first introduced by the Procurement Act 2023 and now coming into force.

At a basic level, authorities must be aware of these rules in order to remain compliant, but there is also an opportunity for the greater flexibility afforded by the new changes. If used well, these regulations will have the potential to streamline and tailor procurement processes, saving authorities time and resources and improving the attractiveness of their partnership opportunities to bidders.

New Procurement Routes

There is a raft of changes brought in by the Act, which can be viewed in more detail here.

Possibly the most significant are the changes to the actual routes of procurement, with a more burdensome set of notice requirements being placed on authorities coming a close second.

Of the new routes, the ‘Competitive Flexible’ procedure is most relevant for almost all development and regeneration cases and replaces a range of different approaches under the old regime.

Previous routes varied in the extent to which authorities could engage with the market prior to calling for final tenders and when and how many times authorities could see draft or interim submissions. All of this is now replaced by a single route that can operate like any one of the old processes if preferred, can be a hybrid, or entirely its own entity, and there is greater flexibility in the timing of providing tender information to the market, allowing authorities to progress opportunities faster.

The new regime simply requires that core Procurement Objectives are adhered to when designing a process: value for money, maximising public benefit, sharing information, and acting with integrity (which are largely analogous to procurement Principles required under the old regime).

What This Means for Future Procurements

Though these new rules present a wide scope for doing things differently, they also allow for processes to be run largely as they were before. Given that the procurement industry is inherently (and rightly) risk averse, we anticipate that in the short to medium term, things won’t actually feel much different.

It will take some time for many authorities to explore and make use of the full flexibility now afforded to them. But shortly, there will be a window of opportunity for proactive authorities to make full use of these changes, present themselves as open for business and forward-thinking, and stand out in what can be the crowded marketplace (and limited bidder pool) of partnership procurements.

There is an opportunity for developers, too: to understand the flexibility of the new process and advocate for it, potentially influencing the way public sector bodies design their PPP procurement processes and, through this, helping to minimise superfluous procurement stages or content and optimise bid resources.

Our development advisory team is currently working up a number of partnership procurements across the country that will come to market once these new regulations are in force.

In some, we are exploring the potential to significantly save on the programme by condensing what would have previously been two stages of initial shortlisting and outline submission proposals into a single first stage. This won’t work for all projects, but in one case, we have a very unique site and bespoke delivery structure, which means targeting a relatively small sub-section of the regeneration market, and in this context, the change in approach will likely be welcome on all sides.

But there are also risks in the newfound flexibilities. For example, authorities can now launch processes with less upfront information to bidders than before. This can accelerate launch but shifts the significant resource requirement associated with finalising documents into the live procurement stage, which also creates risk of delay in the event that the contracting authority cannot crystalise their approach in time (for example, for evaluation). And there may be the perception that later documents have been tailored to a particular bidder or solution. This is all workable but will require careful consideration and good advice.

Looking wider, we see great potential in the new regime to breathe new life into the sector, with more effective and tailored processes and possibly the encouragement of new entrants. However, this can only happen if authorities are prepared to explore this new flexibility, along with their legal advisers, and indeed, the developer market is prepared to participate in novel processes.

From our perspective, the opportunity for accelerated delivery and better outcomes without compromising on the most important tenets of public procurement is welcome – especially at a time when so many schemes and sites need unlocking.