Key changes within the Procurement Act 2023 in relation to Light Touch Contracts
Contracting authorities should be aware of new obligations related to Light Touch Contracts under the Procurement Act 2023 (the “Act”), which is now expected to come into force on 24 February 2025. Below we set out the key changes from the Public Contracts Regulations 2015 (the “PCR”) and the key features of the Act relating to Light Touch Contracts.
Please note that if a ‘relevant health care service’ is being procured by a ‘relevant authority’ (both as defined in the Health Care Services (Provider Selection Regime) Regulations 2023 (the “PSR”)), then the PSR will apply to that procurement and not the Act.
Other than the hiving off of health care services to the PSR, the Act is broadly similar to the PCR in relation to the scope of the “light touch regime” (the treatment of Light Touch Contracts), so contracting authorities can continue to access the process flexibilities for the same kind of contracts as they have been doing under the PCR. The types of services caught are set out in the Procurement Regulations 2024.
Rather than there being a separate set of rules as in the PCR, the Act instead utilises exceptions and special provisions to permit more flexibility and fewer rules for procurement processes for the award of Light Touch Contracts.
Light touch contracts continue to benefit from a higher threshold, before triggering the Act provisions.
Light touch contracts must still be advertised using a tender notice unless a direct award justification applies.
The ability to reserve contracts for light touch services to public service mutuals is also retained.
The key requirements of the Act to note relating to Light Touch Contracts include (among others):
- The Procurement Objectives apply.
- Contracting authorities are required to determine whether suppliers are excluded or excludable suppliers and consider conflicts of interest before awarding the contract.
- Contracting authorities awarding Light Touch Contracts are subject to the same provisions relating to competitive tendering procedures as apply when awarding other types of contracts.
- The Act sets out additional exclusion grounds (including Debarment) that will also apply to Light Touch Contracts.
- There is no minimum period for the bid period for processes for the award of a Light Touch Contract. However, contracting authorities must ensure that timescales are reasonable, for example, having regard to the nature of the requirement and the complexity of the contract being awarded.
- Rules governing direct awards under frameworks, the maximum term of frameworks and competitive section process for frameworks do not apply to frameworks for the call-off of Light Touch Contracts.
- There is no requirement to hold a mandatory standstill period, although contracting authorities are encouraged to apply a voluntary standstill period to reduce the risk of the contract being set aside.
- The rules allowing the modification of Light Touch Contracts have been considerably loosened. The Contract Details Notice must be published within 120 days rather than 30 days.
- Certain transparency obligations are disapplied, such as the requirement to set and publish KPIs, contract change notices and publication of other information on contract performance.
How we can help
Our specialist procurement team is presently assisting a number of contracting authorities who are reviewing and updating their procurement processes and documents in readiness for implementation of the Act. If you have any queries regarding the impact of the Act on your processes and standard documents, please do not hesitate to contact our specialist procurement team.