The Procurement Act 2023: the Competitive Flexible Procedure

The Procurement Act 2023 creates a new public procurement rulebook in England, Wales and Northern Ireland. The Act is expected to enter into force on 24 February 2025 (see our September 2024 update). One of the most significant changes introduced by the Act is the introduction of a new procurement procedure: the Competitive Flexible Procedure.

Key takeaways

• The Competitive Flexible Procedure is a new competitive tendering procedure which affords contracting authorities a broad discretion to structure tender processes.
• It will replace the existing multi-stage public procurement procedures.
• Contracting authorities can continue to model their procurement procedures closely on existing procedures, but they may also come up with their own bespoke procedures.

Background

Public procurement law is due to undergo one of its biggest reforms in many years in February 2025, when the Procurement Act 2023 enters into force. The Procurement Act 2023 consolidates and replaces the current patchwork of EU-derived legislation.

Under the current regime, there are five different competitive award procedures available to contracting authorities. Each of these procedures has different rules and minimum time limits. Deciding which procedure to use can often be complex. The differences between the procedures are also difficult for bidders to understand.

The new regime has simplified matters. The Procurement Act 2023 provides for just two types of competitive tendering procedure: the Open Procedure and the Competitive Flexible Procedure. 

The new Open Procedure is very similar to the Open Procedure under the current regime. This will be a single stage tendering procedure and there will be no restrictions on which applicants can submit tenders. The Open Procedure tends to be suitable for simple and quick public procurements. 

The Competitive Flexible Procedure

The Competitive Flexible Procedure is a competitive tendering procedure which allows the contracting authority the freedom to design its own procedure, subject to ensuring that the procedure is designed and conducted in a manner consistent with the overarching principles. In particular, the contracting authority must have regard to delivering value for money, maximising public benefit, transparency, acting with integrity, and treating bidders equally.

The Statutory Guidance explains that the contracting authority may choose to limit the number of participants across multiple stages, and may choose to include numerous processes into the procedure, such as dialogue, negotiation or a demonstration stage. 

The Competitive Flexible Procedure increases authorities' ability to design a highly bespoke public procurement process, arguably offering additional flexibility. In practice, as is the case for most of the award procedures under the current regime, the Competitive Flexible Procedure will usually begin with a selection stage, involving the assessment of suppliers against any shortlisting criteria. This will then be followed by the award stage. However, the structure of that award stage may differ considerably from one procurement to the next. 

In many cases, procurements carried out under the Competitive Flexible Procedure will have a very familiar structure. In particular, the guidance confirms that it will be possible to model procurements on the procedures available under the current regime. For example, where there is no need for discussions or negotiations with bidders, contracting authorities may adopt a similar approach to the current Restricted Procedure. In contrast, where discussions or negotiations will be necessary, contracting authorities may model their procurements on the Competitive Procedure with Negotiation or the Competitive Dialogue Procedure, subject to ensuring compliance with the new principles and objectives. 

The guidance also highlights the following possibilities when carrying out a procurement under the Competitive Flexible Procedure:

• post-tender negotiations following a round of open tendering, where all suppliers are invited to submit a tender;
• face to face tender negotiations following a round of selective tendering;
• multi-stage negotiations after an initial round of tendering; and/or
• a potential stage where there is a physical inspection or demonstration of relevant technology and software, such as a site visit or delivery of a pilot.

Another important development alongside the introduction of the Competitive Flexible Procedure is the new power for a contracting authority to modify the terms of its procurement procedure. In particular, there is now an express right to change the terms of a procurement that is in progress, provided that those changes are not substantial. This means that there should be greater scope to rectify issues that arise during the procurement without triggering the need to retender.

Comment

At least initially, we expect that many contracting authorities will structure their procurements around tried and tested approaches. However, the Procurement Act presents an opportunity for contracting authorities to come up with their own highly bespoke procedures, potentially combining different elements of the procedures available under the current regime with some additional innovations. This will be an interesting aspect of the regime to watch both from the perspective of developing procurement models which are attractive to bidders and which deliver good procurement outcomes and from the perspective of managing procurement challenge risks.