Procurement Bill [HL] (HL Bill 4)

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Part 6 Below-threshold contracts

77 Regulated below-threshold contracts

(1)In this Part, a “regulated below-threshold contract” means a below-threshold
5contract which is not—

(a)an exempted contract,

(b)a concession contract, or

(c)a utilities contract.

(2)This Part does not apply—

(a)10to a contracting authority that is a maintained school, Academy or sixth
form college,

(b)in relation to the award of a contract—

(i)by a transferred Northern Ireland authority, unless it is
awarded under a reserved procurement arrangement or a
15devolved Welsh procurement arrangement, or

(ii)under a transferred Northern Ireland procurement
arrangement, or

(c)in relation to the management of such a contract.

78 Regulated below-threshold contracts: procedure

(1)20Where a contracting authority invites the submission of tenders in relation to
the award of a regulated below-threshold contract, the authority may not
restrict the submission of tenders by reference to an assessment of a supplier’s
suitability to perform the contract.

(2)The reference to a supplier’s suitability to perform the contract includes a
25reference to a supplier’s—

(a)legal and financial capacity;

(b)technical ability.

(3)Subsection (1) does not apply in relation to a works contract if the contract has
an estimated value of—

(a)30in the case of a contract to be awarded by a central government
authority, not less than £138,760, or

(b)otherwise, not less than £213,477.

(4)An appropriate authority may by regulations amend this section for the
purpose of amending the financial thresholds.

(5)35This section does not apply in relation to—

(a)the award of a contract by a devolved Welsh authority, unless it is
awarded under a reserved procurement arrangement,

(b)the award of a contract under a devolved Welsh procurement
arrangement, or

(c)40the award of a contract in accordance with a framework.

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79 Regulated below-threshold contracts: notices

(1)A contracting authority may not advertise for the purpose of inviting tenders
in relation to the award of a notifiable below-threshold contract without first
publishing a below-threshold tender notice.

(2)5Subsection (1) does not apply where a contracting authority advertises only for
the purpose of inviting tenders from particular or pre-selected suppliers.

(3)As soon as reasonably practicable after entering into a notifiable below-
threshold contract, a contracting authority must publish a contract details
notice.

(4)10A “notifiable below-threshold contract” is a regulated below-threshold
contract with an estimated value of—

(a)in the case of a contract to be awarded by a central government
authority, not less than £12,000, or

(b)otherwise, not less than £30,000.

(5)15A “below-threshold tender notice” is a notice setting out—

(a)that the contracting authority intends to award a contract, and

(b)any other information specified in regulations under section 86.

(6)Any time limits provided for in a below-threshold tender notice must be—

(a)reasonable, and

(b)20the same for each supplier.

(7)An appropriate authority may by regulations amend this section for the
purpose of amending the financial thresholds.

80 Regulated below-threshold contracts: implied payment terms

(1)The terms in subsections (2) to (5) are implied into every regulated below-
25threshold contract entered into by a contracting authority.

(2)Any sum due to be paid under the contract by the contracting authority must
be paid before the end of the period of 30 days beginning with—

(a)the day on which an invoice is received by the contracting authority in
respect of the sum, or

(b)30if later, the day on which the sum first became due in accordance with
the invoice.

The term in subsection (2) does not apply if the contracting authority—

(a)considers the invoice invalid, or

(b)disputes the invoice.

(4)35On receiving an invoice from a payee, the contracting authority must notify the
payee without undue delay if—

(a)it considers the invoice invalid, or

(b)it disputes the invoice.

(5)A contracting authority may rely on a payment made by a third party to satisfy
40the term in subsection (2) only with the agreement of the payee.

(6)For the purposes of the terms in subsections (2) to (5), an invoice is valid if it
sets out the minimum required information and meets any other requirement
set out in the contract.

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(7)The minimum required information is—

(a)the name of the invoicing party,

(b)a description of the goods, services or works supplied,

(c)the sum requested, and

(d)5a unique identification number.

(8)The terms in subsections (2) to (5) are also implied into any contract that is
wholly or substantially for the purpose of performing (or contributing to the
performance of) the whole or any part of the contract referred to in subsection
(1).

(9)10But for the purpose of subsection (8), references in those terms to the
contracting authority are to be read as references to the person to whom goods,
services or works are supplied for the purpose of performing (or contributing
to the performance of) the whole or any part of the contract referred to in
subsection (1).

(10)15Any term purporting to restrict or override the terms implied by this section is
without effect.

(11)But nothing in this section prohibits the parties to a contract from agreeing that
a sum due under the contract must be paid earlier than would be required by
the term in subsection (2).

(12)20An appropriate authority may by regulations amend this section for the
purpose of changing the number of days referred to in subsection (2), but the
number of days may not be more than 30 days.

(13)In this section, “payee” means the person due to be paid under the invoice
concerned.

25Part 7 Implementation of international obligations

81 Treaty state suppliers

(1)In this Act, a “treaty state supplier” means a supplier that is entitled to the
benefits of an international agreement specified in Schedule 9.

(2)30But a supplier is a treaty state supplier only to the extent that it is entitled to the
benefits of an international agreement specified in Schedule 9 in relation to the
procurement, below-threshold procurement or international organisation
procurement being—

(a)carried out, or

(b)35challenged.

(3)An appropriate authority may by regulations amend Schedule 9 for the
purpose of—

(a)specifying an international agreement to which the United Kingdom is
a signatory, or

(b)40removing, or amending a reference to, an international agreement.

(4)In subsection (3)(a), the reference to being a signatory to an international
agreement includes a reference to having—

(a)exchanged instruments, where the exchange constitutes the agreement;

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(b)acceded to the agreement.

(5)In this Part—

(a)a “below-threshold procurement” means the award or management of
a below-threshold contract, including any steps taken for the purpose
5of awarding or managing a below-threshold contract;

(b)an “international organisation procurement” means the award or
management of, and any steps taken for the purpose of awarding or
managing, a contract that—

(i)is not a public contract only by virtue of an exemption in
10paragraph 20 or 26 of Schedule 2 (contracts subject to the
procurement rules of international organisations), and

(ii)is to be, or was, awarded following a competitive tendering
procedure without restriction on who can, or could, submit an
initial tender;

(c)15a reference to a supplier being entitled to the benefits of a treaty
includes a reference to a supplier being entitled by virtue of the place of
origin of goods or services supplied.

(6)In this Act—

(a)a reference to a treaty state supplier does not include a reference to a
20supplier that is entitled to the benefits of an international agreement
only by reference to the United Kingdom being party to that agreement;

(b)a reference to a state or territory being party to an agreement include a
reference to a state or territory being part of an organisation of states or
territories that is party to an agreement.

82 25Treaty state suppliers: non-discrimination

(1)A contracting authority may not, in carrying out a procurement, below-
threshold procurement or international organisation procurement,
discriminate against a treaty state supplier.

(2)A contracting authority discriminates against a treaty state supplier if it treats
30the supplier less favourably than it treats, or would treat, a United Kingdom
supplier or other treaty state supplier because of—

(a)the supplier’s association with the supplier’s treaty state, or

(b)the supplier’s lack of association with—

(i)the United Kingdom, or

(ii)35another treaty state.

(3)On a comparison of cases for the purposes of subsection (2), there must be no
material difference between the circumstances relating to each case.

(4)In this section, a “treaty state” means a state, territory or organisation of states
or territories that is party to an international agreement specified in Schedule
409, other than the United Kingdom.

(5)And, in subsection (2)(a), a treaty state is a supplier’s treaty state if the supplier
is entitled to the benefits of such an international agreement by virtue of that
treaty state being party to the agreement.

(6)In this Act, “United Kingdom supplier” means a supplier that is—

(a)45established in, or controlled or mainly funded from, the United
Kingdom, a British Overseas Territory or a Crown Dependency, and

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(b)is not a treaty state supplier.

83 Treaty state suppliers: non-discrimination in Scotland

(1)A Minister of the Crown or the Scottish Ministers may by regulations make
provision for the purpose of ensuring that treaty state suppliers are not
5discriminated against in the carrying out of devolved procurements.
In this section “devolved procurement” means the award or management of
contracts, including any steps taken for the purpose of the award or
management of contracts, by a devolved Scottish authority.

(3)Regulations under subsection (1) may modify primary legislation (whenever
10passed).

Part 8 Information and notices: general provision

84 Pipeline notices

(1)This section applies in relation to any contracting authority that considers that,
15in the coming financial year, it will pay more than £100 million under relevant
contracts.

(2)A contracting authority must publish a pipeline notice before the end of the
period of 56 days beginning with the first day of the financial year referred to
in subsection (1).

(3)20A “pipeline notice” means a notice setting out specified information about any
public contract with an estimated value of more than £2 million in respect of
which the contracting authority intends to publish a tender notice or
transparency notice during the reporting period.

(4)In this section—

  • 25“financial year” means—

    (a)

    the period of twelve months beginning with the 1 April
    following the day on which this section comes into force, and

    (b)

    each successive period of 12 months;

  • “relevant contracts” means any contracts for the supply of goods, services
    30or works to the contracting authority other than exempted contracts;

  • “reporting period” means the period of 18 months beginning with the first
    day of the financial year referred to in subsection (1);

  • “specified information” means information specified in regulations under
    section 86.

(5)35An appropriate authority may by regulations amend this section for the
purpose of changing the financial thresholds.

(6)This section does not apply to private utilities.

85 General exemptions from duties to publish or disclose information

(1)A contracting authority is not required to publish or otherwise disclose
40information under this Act if the authority is satisfied that—

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(a)withholding the information from publication or other disclosure is
necessary for the purpose of safeguarding national security, or

(b)the information is sensitive commercial information and there is an
overriding public interest in its being withheld from publication or
5other disclosure.

(2)“Sensitive commercial information” is information which—

(a)constitutes a trade secret, or

(b)would be likely to prejudice the commercial interests of any person if it
were published or otherwise disclosed.

(3)10If a contracting authority withholds information under this section, the
authority must publish or notify anyone to whom the information would
otherwise be provided of—

(a)the fact that information is being withheld, and

(b)whether it is being withheld under subsection (1)(a) or (1)(b).

(4)15A contracting authority is not required to publish or notify someone under
subsection (3) if the authority is satisfied that it would be contrary to the
interests of national security to do so.

86 Notices, documents and information: regulations

(1)An appropriate authority may by regulations make provision about—

(a)20the form and content of notices, documents or other information to be
published or provided under this Act;

(b)how such notices or documents are, or information is, to be published,
provided or revised.

(2)Regulations under subsection (1) may for example—

(a)25require a notice or document to contain specified information;

(b)require publication on a specified online system.

(3)Regulations under subsection (1) may—

(a)make different provision for different kinds of notice, document or
information;

(b)30make different provision for the same kind of notice, document or
information for different purposes.

See also section 110(3).

87 Electronic communications

(1)In carrying out a procurement, a contracting authority must so far as
35practicable—

(a)communicate with suppliers electronically, and

(b)take steps to ensure that suppliers participating in a procurement
communicate electronically.

(2)In carrying out a procurement, a contracting authority may only use, or require
40the use of, electronic communication systems that are—

(a)free of charge and readily accessible to suppliers,

(b)generally available, or interoperable with other generally available
systems, and

(c)accessible to people with disabilities.

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(3)Subsection (1) does not apply if the contracting authority is satisfied that
electronic communication poses a particular security risk in the circumstances.

(4)In this section, “electronic communication system” includes any electronic
system used for the purpose of communication with suppliers.

88 5Information relating to a procurement

(1)An appropriate authority may by regulations make provision requiring certain
information to be shared in a particular way, including through a specified
online system.

(2)An appropriate authority may make arrangements to establish and operate an
10online system for the purposes of sharing information.

(3)Regulations under subsection (1) may require a contracting authority to—

(a)share information in a particular way, or

(b)take steps to ensure that suppliers participating in a procurement share
information in a particular way.

(4)15A contracting authority must keep records of any communication between the
authority and a supplier that is made for the purposes of, or in connection with,
a procurement under this Act.

(5)In this section, “information” means information shared under, or for a
purpose relating to, this Act.

20Part 9 Remedies for breach of statutory duty

89 Duties under this Act enforceable in civil proceedings

(1)A contracting authority’s duty to comply with Parts 1 to 5, 7 and 8 is
enforceable in civil proceedings under this Part.

(2)25For the purposes of this Part, the duty is owed to any supplier that is—

(a)a United Kingdom supplier, or

(b)a treaty state supplier.

(3)Proceedings under this Part may be brought in the court by a supplier that—

(a)is a United Kingdom or treaty state supplier, and

(b)30has suffered, or is at risk of suffering, loss or damage in consequence of
a breach of the duty.

(4)See section 95 for time limits applicable in respect of claims under this Part.

(5)A contracting authority’s duty to comply with section 82 (treaty state
suppliers: non-discrimination) in relation to a below-threshold procurement or
35international organisation procurement is not enforceable in civil proceedings
under this Part.

(6)This Part applies irrespective of section 2(2) and 21 of the Crown Proceedings
Act 1947.

(7)In this Part—

  • 40“claimant”—

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  • (a)

    in relation to a claim in Northern Ireland, means plaintiff;

    (b)

    in relation to a claim in Scotland, means pursuer;

  • “the court” means—

    (a)

    in England and Wales, the High Court,

    (b)

    5in Northern Ireland, the High Court, and

    (c)

    in Scotland, the Court of Session.

(8)In this section “below-threshold procurement” and “international organisation
procurement” have the meanings given in section 81.

90 Automatic suspension of the entry into or modification of contracts

(1)10A contracting authority may not enter into a public contract, or modify a public
contract or a convertible contract, if—

(a)proceedings under this Part have been commenced in relation to the
contract, and

(b)the contracting authority has been notified of that fact.

(2)15The court may lift or modify the restriction in subsection (1) by order under
section 91.

(3)The restriction in subsection (1) does not apply if the contracting authority was
notified of the commencement of proceedings after the end of any applicable
standstill period (see sections 49 and 71).

(4)20The restriction in subsection (1) does not apply if—

(a)the proceedings at first instance have been determined, discontinued or
otherwise disposed of, and

(b)the court has not made an order to extend the restriction.

(5)In this section “convertible contract” has the meaning given in section 69.

91 25Interim remedies

(1)In proceedings under this Part, the court may make one or more of the
following orders—

(a)an order lifting or modifying the restriction in section 90(1);

(b)an order extending the restriction or imposing a similar restriction;

(c)30an order suspending the effect of any decision made or action taken by
the contracting authority in carrying out the procurement;

(d)an order suspending the procurement or any part of it;

(e)an order suspending the entering into or performance of a contract;

(f)an order suspending the making of a modification of a contract or
35performance of a contract as modified.

(2)In considering whether to make an order under subsection (1), the court must
have regard to—

(a)the public interest in, among other things—

(i)upholding the principle that public contracts should be
40awarded, and contracts should be modified, in accordance with
the law;

(ii)avoiding delay in the supply of the goods, services or works
provided for in the contract or modification (for example, in

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respect of defence or security interests or the continuing
provision of public services);

(b)the interests of suppliers, including whether damages are an adequate
remedy for the claimant;

(c)5any other matters that the court considers appropriate.

(3)An order under subsection (1) may not permit a contract to be entered into or
modified before the end of any applicable standstill period (see sections 49 and
71).

(4)An order under subsection (1) may provide for undertakings or conditions.

92 10Pre-contractual remedies

(1)This section applies if the court is satisfied that a decision made, or action
taken, by a contracting authority breached the duty referred to in section 89(1)
and—

(a)the contract in relation to which the breach occurred has not been
15entered into, or

(b)where the breach occurred in relation to a modification of a contract,
the modification has not yet been made.

(2)The court may make one or more of the following orders—

(a)an order setting aside the decision or action;

(b)20an order requiring the contracting authority to take any action;

(c)an order for the award of damages;

(d)any other order that the court considers appropriate.

93 Post-contractual remedies

(1)This section applies if the court is satisfied that a decision made, or action
25taken, by a contracting authority breached the duty referred to in section 89(1)
and—

(a)the contract in relation to which the breach occurred has already been
entered into, or

(b)where the breach occurred in relation to a modification of a contract,
30the modification has already been made.

(2)The court—

(a)must, if a set aside condition in section 94 is met, make an order setting
aside the contract or modification, and

(b)may, in any case, make an order for the award of damages.

(3)35The duty in subsection (2)(a) does not apply if the court is satisfied that there
is an overriding public interest in not setting aside the contract or modification
(for example, in respect of defence or security interests or the continuing
provision of public services).

(4)In which case, the court may make an order reducing—

(a)40the term of the contract;

(b)the goods, services or works to be supplied under the contract.

(5)In considering whether there is an overriding public interest in not setting
aside a contract or modification, the court—

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(a)may have regard to the financial consequences of setting aside the
contract or modification only in exceptional circumstances, and

(b)must in any event disregard costs that are directly associated with—

(i)the contracting authority having to award another contract or
5enter into a contract to a different supplier,

(ii)a delay in the performance of the contract or the contract as
modified, or

(iii)any legal obligations arising from setting aside the contract or
modification.

(6)10If a contract or modification is set aside, it is to be treated as without effect from
the date of the order.

(7)An order setting aside a framework or modification of a framework may not
operate to set aside contracts already awarded under the framework.

(8)An order setting aside or reducing the term of, or supplies under, a contract
15may make provision for restitution and other consequential or supplementary
matters.

94 Post-contractual remedies: set aside conditions

(1)A set aside condition is met if the court is satisfied that the claimant was denied
a proper opportunity to seek a remedy under section 92 (pre-contractual
20remedies) because—

(a)a required contract award notice was not published;

(b)the contract was entered into or modified before the end of any
applicable standstill period (see sections 49 and 71);

(c)the contract was entered into or modified during a period of automatic
25suspension under section 90 or in breach of a court order;

(d)in the case of a contract of a kind described in section 49(3) (exceptions
to mandatory standstill), the breach became apparent only on
publication of a contract award notice;

(e)in the case of a modification under section 69, the breach became
30apparent only on publication of a contract change notice;

(f)the breach became apparent only after the contract was entered into or
modified.

(2)Subsection (1)(d) does not apply if—

(a)the contract award notice provided for a standstill period, and

(b)35the contract was not entered into before the end of that standstill
period.

(3)Subsection (1)(e) does not apply if—

(a)the contract change notice provided for a standstill period, and

(b)the modification was not made before the end of that standstill period.

(4)40References in this section to a notice not being published include references to
a notice that, though published, did not provide accurate information in
respect of the contract as entered into.