The Act aims to improve the way public procurement is regulated in order to create a simpler and more flexible, commercial system, open up public procurement to new entrants and embed transparency throughout the commercial lifecycle.
The default is to secure suppliers following a competitive tendering procedure, along with using frameworks, concession contracts and applying the Light Touch process as appropriate.
There are certain circumstances where direct awards of above-threshold contracts are allowed and these are detailed below.
But what is a direct award? In summary an authority awards a contract without suppliers going through a bidding process - so issuing a contract direct to a supplier.
Publishing a Transparency Notice will inform the market of the intent to award a contract directly to a supplier - and that can be challenged. Therefore, you need to be watertight about why you are using a direct award - poorly planned and running out of time will not cut it!
What if I need to award a contract quickly to maintain really important services that residents rely on, but it doesn’t meet any the criteria in the Procurement Act? You will need to raise the risk with your procurement and legal teams as you will potentially be acting unlawfully and be challenged… which adds time and resources.
Below is the process in summary form. See our guidance for more detail.
See our fuller guidance on Direct Awards, but in summary here are the grounds:
Prototypes and development: novel goods or services requested by the council, at the early stages of development. This can support the viability of a product.
Single supplier: (1) this is about the uniqueness of the supplier – a unique work of art or artistic performance; or (2) the supplier holds intellectual property or other exclusive rights, including land; or (3) there is no competition for technical reasons e.g. health and safety.
Additional or repeat goods, services and works: (1) existing supplier based on extension or part replacements, avoiding disproportionate technical difficulties; (2) when it was already (formally) indicated an authority would make a direct award to an existing supplier for goods, services or works similar to what was procured in the original tender process.
Commodities: goods purchased on the commodity market when the price is driven by demand.
Advantageous terms on insolvency: when a supplier is undergoing insolvency, including purchases at a favourable price during wind-up or asset liquidation.
Urgency: a strictly necessary purchase for extreme and unavoidable urgency that could not have been foreseen by the council. To cope with the urgency of the time, not a longer solution.
User choice contracts: where others have the right to have a say in appointing the supplier, usually within services covering social care. The individual or their carer must have expressed a preference, or the nature of the services must mean only one supplier can provide them, and the council considers it in the best interest to directly award.
Defence and security: not considered relevant to local authorities, but grounds include (1) supply of services when on deployment outside the UK and (2) award of certain defence contracts to an existing supplier when a modification is not appropriate.
To protect life: to protect human, animal or plant life or health, public order or safety. It would require secondary legislation, so not able to use day-to-day and applied only in emergency circumstances.
Switching to direct award: having conducted a competitive tender but need to switch to direct award if there are no suitable tenders or requests to participate - the authority needs to be satisfied there isn’t a route to award following a competitive tender among other matters.
Hint: remember sub-contractors – authorities may require their supplier to sub-contract to a particular supplier if a direct award justification applies. Tender documents should be written with this in mind.
The transparency notice is published to indicate an intention to directly award to a supplier. The decision to directly award could then be challenged, although there is a 30-day time limit.
Publishing the separately required contract award notice sets out the intention to enter into the contract. This is what triggers the 8-day standstill (where there is one). If the period expires without event, then you can proceed to enter into the contract – but there might still be other challenges if not out of time.