Contract award notification under the Procurement Act 2023: greater transparency but at what price?

A key moment in any competitive procurement is the point at which the contracting authority or utility has decided which is the preferred bidder and notifies all bidders of the outcome. 

For the buyer and the successful bidder, it is hopefully the start (or continuation) of a mutually-beneficial working relationship, albeit one that cannot be consummated until after standstill has finished and any challenges have been dealt with.  But for unsuccessful bidders it can be a time of high stress as they look to understand the reasons why they were unsuccessful and possibly consider options for challenging the decision.

Under the present procurement rules, in procurements other than an award under a framework or a dynamic purchasing system, notification of the award decision to bidders triggers a 10-day standstill period, giving unsuccessful bidders a chance to bring a legal challenge to the decision before the contract is entered into.  The notification will usually also trigger a 30-day limitation period for the bringing of any claim in relation to the procurement.  In the case of awards under a framework or DPS, an award decision notification and standstill are not mandatory but are often applied voluntarily by public or utility sector buyers, especially for higher value awards.

The Procurement Act (PA 2023) and associated regulations – the Procurement Regulations 2024 (Procurement Regulations)[1] – preserve the essential fabric of this regime but make some significant changes as outlined below.

Pre-standstill publication of the procurement outcome

Under the present public and utility procurement rules, award decision notifications are sent only to bidders in the procurement.  The public at large is notified of the outcome of a procurement only on publication of a contract award notice which is (or is supposed to be) published within 30 days after the entry into a public contract or a framework.[2]  In the case of award under a framework or a dynamic purchasing system, there is no obligation to publicise the outcome of a procurement at all.

By contrast, under the PA 2023, a new-style contract award notice (NCAN) will have to be published after the award decision has been taken but before the application of any standstill period and, by extension, before entry into the contract.  Where a standstill is applicable, publication of the NCAN will trigger commencement of the standstill. 

The content of the NCAN is specified in the Procurement Regulations.  Of particular note:

• For contracts over £5m awarded by public sector authorities and public utilities, the NCAN will have to identify both the successful and the unsuccessful bidders for the contract;
• For other contracts awarded by public sector authorities and public utilities, the NCAN will have to identify the successful bidder and set out the total number of tenders received and assessed, and the total number submitted by SMEs;
• For private utilities, the NCAN must identify the successful bidder but there is no requirement to identify the unsuccessful bidder(s) or provide any information about the number of tenders received.

An NCAN must be published pre-standstill in the case of all above-threshold contracts awarded by contracting authorities including contracts awarded under a framework or a dynamic market and contracts awarded by way of direct award without competitive tendering.

In line with the Government's transparency "ambition" (see our blog Transparency of procurement under the Procurement Act 2023 – more information but less openness?) pre-standstill publication of NCANs will substantially increase visibility of procurement outcomes.  However, it is unclear what purpose is served by publication at such an early – and sensitive – stage of the award process and, in particular, by publication of the names of unsuccessful bidders for larger contracts at that stage (or at all). 

For unsuccessful bidders, publication of the NCAN at best is likely to be an unwelcome piece of negative publicity, and at worst could lead to active harm to their business.  Incumbent suppliers who are unsuccessful are likely to be particularly concerned that the loss of a potentially important contract will be publicised at such an early stage, potentially cutting across their communications with staff and investors.  

It is possible that unsuccessful suppliers will get some advance notice of the award decision: as outlined further below, an "assessment summary" must be provided to bidders before publication of the NCAN which will inform bidders (privately) of whether or not they have been successful along with the reasons for the decision.  However, the PA 2023 does not prescribe a minimum period of time between provision of assessment summaries and publication of the NCAN.  Since the standstill does not commence until publication of the NCAN (rather than provision of the assessment summary), it can be expected that authorities will publish the NCAN very shortly after the provision of assessment summaries to bidders.

Notifying the reasons for the decision to unsuccessful bidders - requirement to provide an "assessment summary"

Assessment summary is the term used in the PA 2023 for the information that must be provided to bidders in a competitive procurement (both successful and unsuccessful) informing them of the outcome of the procurement and the authority's assessment of tenders.  For unsuccessful bidders who may be looking to challenge the result, this will be a key document. 

The assessment summary will replace what is termed in the present rules the "award decision notification" (and sometimes still referred to as the "Alcatel letter", harking back to the original European case that enshrined the obligation of contracting authorities to inform bidders of the reasons for their procurement decisions and provide an opportunity to challenge before the contract was entered into). 

The current procurement rules require that the award decision notification contains, among other things, information about the scores awarded to both the successful tenderer and the recipient of the notification together with the reasons for the decision, including the characteristics and relative advantages of the successful tenderer, familiarly known as the "CRAST". 

The requirements of the present rules as to the content of award decision notifications have long proved controversial and a wide variety of different interpretations have been applied, from lengthy breakdowns of the scores awarded and the reasons for those scores to much more minimalist approaches.  The extent and quality of information required to be provided in an award decision notification is often a matter of hot debate between unsuccessful bidders and the contracting authority during the standstill period. 

Moreover, even a well-drafted award decision notification, including a detailed account of the CRAST, does not necessarily amount to a complete set of the reasons for the authority's decision. The full reasons can only ultimately be discerned from the authority's evaluation documents. Unsuccessful bidders who are looking to challenge will therefore typically seek early disclosure of the authority's underlying evaluation documents. The Court typically, though not always, looks favourably on such early disclosure as a way to address the inevitable information asymmetry between authorities and bidders.

The PA 2023 presented an opportunity to resolve these controversies and eliminate a great deal of cost and contention in the aftermath of the award decision, for example by requiring disclosure of the authority's evaluation documents to unsuccessful bidders.  This is an opportunity that has not been taken.  Instead, the PA 2023 retains something like the present regime, in that authorities are required to create and disclose a specific document, called an "assessment summary", explaining how tenders have been assessed.

The PA 2023 says next to nothing about what an assessment summary is supposed to contain.  In itself, this is not a bad thing, as it avoids setting in stone particular and possibly difficult formulations (like the CRAST itself).  The detail is left to secondary legislation in the form of the Procurement Regulations

In specifying the content of the assessment summary, the Procurement Regulations abandon (helpfully) the concept of the CRAST.  Instead, the Procurement Regulations provide that the summary must set out how the tenders of both the successful bidder and the recipient of the summary were assessed against the award criteria for the procurement, including:

• The score determined for each award criterion; and
  • An explanation for that score by reference to relevant information in the tender; and
  • Where an award criterion includes sub-criteria for assessment, an explanation of how the tender was assessed by reference to each sub-criterion; and
• The total score and any sub-total scores.

This appears to be a sensible formulation that aligns with how a well-drafted award decision notification should be prepared under the present procurement rules.  It will hopefully avoid some of the more arcane problems that exist with the CRAST (such as whether authorities have to provide reasons in the case of criteria where the unsuccessful bidder scored higher than the preferred bidder, the argument being that there is no "relative advantage" of the preferred bidder in such cases).  It may also be noted that this formulation is a marked improvement on the version that was included in draft regulations published by the Government for consultation in summer 2023, which would have baked in some of the problems of the CRAST and reduced the quantity and quality of information to be provided to bidders on notification of the award decision. 

However, for an unsuccessful bidder looking to challenge the outcome, the assessment summary, like the present award decision notification, is likely to be only the start of a long process of requests for disclosure of internal documents containing the underlying reasons for the authority's decision.