Procurement Bill [HL]

Lord Aberdare Excerpts

Committee stage
Monday 24th October 2022 Grand Committee

Moved by

[Lord Aberdare]

245A: Clause 44, page 27, line 14, leave out subsection (2) and insert—
“(2) A “framework” is a contract between one or more contracting authorities and one or more suppliers that provides for the future award of contracts by a contracting authority to the supplier or suppliers, including through a multi-party framework alliance.”Member’s explanatory statement
This amendment clarifies that sections 44, 45, 46 and 47 governing ‘Award under Frameworks’ include the practices of leading public sector framework providers such as Crown Commercial Service whose framework contracts for goods, services and works include multi-party instruments known as ‘framework alliances’ that are entered into by multiple contracting authorities.

[Lord Aberdare (CB)]

My Lords, I start by joining the chorus of welcome to the noble Baroness, Lady Neville-Rolfe, in her new ministerial post. It brings back happy memories since it was almost exactly seven years ago in this Room that I proposed an amendment to the then Enterprise Bill concerning the pernicious practice of cash retentions, to which the noble Baroness gave a positive commitment in response. I am delighted to be trying my luck again today.

Amendment 245A would simply extend the scope of Clauses 44 to 47 to cater for framework alliances. These are multiparty framework contracts entered into by multiple contracting authorities, which are increasingly being used by leading framework providers such as the Crown Commercial Service. Framework alliances are recognised and supported by the Construction Playbook, as well as by Constructing the Gold Standard: An Independent Review of Public Sector Construction Frameworks by Professor David Mosey, published by the Cabinet Office last December, whose recommendations are strongly endorsed in the 2022 version of the Construction Playbook.

The use of UK public sector framework alliances has been shown to deliver greater value, reduce risks and other improved outcomes as well as enhanced opportunities for small businesses. They have been adopted for UK public sector procurements of goods, services and works worth a total of more than £90 billion. They include important joint systems of supply chain collaboration and joint risk management that are well in advance of those adopted in jurisdictions outside the UK.

Amendment 245A would merely adjust the wording of Clause 44(2) to ensure that the definition of frameworks includes such multiparty framework alliances. I hope that the Minister will be able to assure us that these alliances will be covered by the provisions of this chapter of the Bill, even if not in the exact form of my amendment. I beg to move.

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[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Lords, Lord Aberdare and Lord Scriven, and my noble friend Lord Lansley, for their kind words.

I will start with the government amendments, because even though this will not be in strict order, it will help to answer the other points that have been raised. Frameworks are a well-established commercial purchasing tool, used widely across the public sector. Having looked at some of the public responses, that percentage figure that was quoted is not worrying. Key is whether this is a sensible provision and whether we are reforming them in the correct way. The Bill makes a number of improvements to the effectiveness of frameworks, to increase flexibility, provide value for money, et cetera.

I am glad that the noble Lord referred to government Amendment 246 because it is quite a substantial and important amendment among the hundreds that I apologise for having tabled in Committee. It allows contracting authorities to set conditions of participation in a competitive selection process for the award of a contract under a framework. New subsections (3A) to (3F) impose restrictions on the use of such conditions to those which apply to conditions of participation in a competitive tendering procedure under Clause 21. These include limiting the conditions in various ways, for example, to those which are a proportionate means of ensuring that suppliers have the relevant qualifications, experience and technical ability to perform the contract, of ensuring that the conditions do not break the rules on technical specifications, and of requiring that equivalents must be allowed where particular qualifications are required. The question on proportionality is a good one. I do not have as good an answer for the noble Lord as I would like, so I will write to him on that point.

My noble friend Lord Lansley commended new subsection (3G). This restricts the basis on which proposals received as part of a competitive selection process under a framework can be assessed to all or some of the award criteria against which tenders the frameworks were assessed. This is to ensure that suppliers that have already been admitted to a framework do not have to meet entirely different criteria later. New subsection (3H) allows for the award criteria to be refined.

Government Amendments 251 to 255, and 258 to 260, relate to rules for frameworks for the future award of contracts. The remaining government amendments in this group deal variously with light-touch contracts, ensuring open frameworks work as intended, and with minor tidying-up changes.

Turning to the noble Lord, Lord Aberdare, the thing that we worked on together when I was last a Minister is still unresolved, so I feel a sense of guilt.

[Lord Aberdare (CB)]

The Minister did make some progress though.

[Baroness Neville-Rolfe (Con)]

I agree with the objective behind the noble Lord’s Amendment 245A. There is a need for this Bill to ensure that multiple contracting authorities may join to award a framework. Frameworks can result in significant savings, financially and in time, and they say that time is money. This is particularly the case where they are put in place for the benefit of more than one contracting authority, for example by centralised procurement authorities.

To that end, Clause 10 provides for contracting authorities to carry out procurements jointly and for centralised procurement authorities to put in place arrangements for the benefit of other contracting authorities. This enables them to delegate their obligations to run lawful procurements to centralised procurement authorities, in their capacity as specialists, or to jointly procure with them and remain responsible, together with their procurement partners, for the award of any resulting contract. The noble Lord will wish to look carefully at that, but I do not think that his amendment is necessary.

Amendments 247 and 248, tabled by my noble friend Lord Lansley, seek to add additional requirements for the award of contracts under frameworks, without a further competitive process. The first of these, a system based on the suppliers’ ranking in the competition for the award of the framework—the noble Lord talked of a cascade; we have talked of ranking—is certainly one mechanism by which contracts can be awarded under a framework without a competition. However, this is only one selection mechanism, and there are others. They might include a “taxi rank” system, where the next supplier on the list gets the work, or the supplier chosen could simply be the cheapest for that good or service, which contracting authorities might consider to be more appropriate for their requirements on that occasion. There is nothing in the Bill preventing contracting authorities from including rankings in a framework, but there is no need to require this for all frameworks.

The second requirement is to allow for the provision of additional information by suppliers in order to make an award without a competition. In this connection, I draw noble Lords’ attention to Clause 44(6), which allows contracting authorities to ask for additional information to ensure that call off competitions are effective. Sorry, that is a bit repetitive. This seems preferable to receiving large amounts of potentially unnecessary or irrelevant information and adding burdens to the award process, which we are all keen to avoid.

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I respectfully request that Amendments 245A and 247 to 249 are not pressed. I will move the government amendments in my name.

[Lord Aberdare (CB)]

My Lords, I thank the noble Baroness for her response. I am encouraged that she agrees with the objective that framework allowances will be covered by the Bill. I will look at what she said and how she says that they will be covered, but my main objective with this rather simple amendment was to ensure that allowances were covered.

The noble Lords, Lord Lansley, Lord Scriven and Lord Coaker, raised a number of much more substantive amendments. I do not really feel able to respond on their behalf, but I was glad that the Minister said she would come back on the issue of proportionality, which is particularly important. I am sure the other noble Lords will look carefully at the issues of fees, cascading and so forth. I am happy to withdraw my amendment.

Amendment 245A withdrawn.