The Procurement Act 2023 (expected to go-live in February 2025) replaces dynamic purchasing and qualification systems with a single new commercial purchasing tool called a Dynamic Market (DM).
DMs can be used and established by contracting authorities, including public and private utilities. They can also establish and use a Utilities Dynamic Market (UDM) for the purpose of the award of utility contracts. DMs and UDMs are generally very similar with slight differences such as the basis of charging fees.
What is a Dynamic Market Notice and When is it Not Required?
A dynamic market notice is required to be published at various times relating to the establishment of a DM or UDM, its operation and when it ceases to operate (the exception in the case of a UDM established by a private utility is that a notice is not required when a UDM ceases to operate). This notice does not outline the requirements for public contracts awarded by reference to a DM or UDM.
The Procurement Act policies intention is for DMs and UDMs to be more flexible than frameworks, with no restrictions on their duration, and with new suppliers able to be admitted throughout their life.
Qualifying Utilities Dynamic Market Notice
A UDM is established for the purpose of the awarding of utility contracts by utilities. A UDM can be established either by reference to a DM notice or a Qualifying Utilities Dynamic Market (QUDM) notice. The purpose of a QUDM notice, like the DM notice, is to notify suppliers of the intention to establish a UDM. It also will provide details in regard to its establishment, modification and termination.
A QUDM notice differs from a DM notice in that it must provide as much of the information which would be required in a tender notice for the award of a contract. This includes reference to the relevant UDM that is available at the time the QUDM notice is published.
Additionally, the QUDM notice (rather than a DM notice) indicates that when a procurement is commenced by reference to the resultant UDM in future, only members of the UDM will be notified of any future opportunities to bid for a public contract. In this case a tender will not be published in the central digital platform (FTS). Instead, the information that is ordinarily provided in a tender notice is required to be provided directly to the members of the UDM. Regarding tender notices to suppliers that have applied for membership of the market, or part of the market, but have yet to be accepted or rejected, it is down to contracting authorities to make the decision. It is also at their discretion on how to mandate completion of the registration process before contract is awarded. In this circumstance, the tender notice which is to be provided is required to include further details relevant to the specific procurement in question. It must also include any details that are ordinarily required for a tender notice that have not already been provided in the QUDM notice.
What the Government Proposes
The Procurement Act released by Government proposes that the new regime will maintain the effect of Qualification systems (such as UVDB Powered by Achilles) as a separate tool for utilities under similar terms to the Utilities Contracts Regulations 2016. This is to maintain how utilities currently operate. The disapplication of the requirement to publish a tender notice in FTS for contracts awarded by reference to a UDM established using a QUDM notice is how this will be implemented in the new regime.
The Procurement Act: What Changes and What Stays the Same?
The Procurement Act: What Changes and What Stays the Same?
Existing qualification systems like UVDB Powered by Achilles and Link-Up that were set up prior to the Procurement Act 2023 coming into force will be unaffected. Procurements that have been started under the old regime will continue to the end of the contracting lifecycle for that process. In other words, the procurement and resulting contracts continue to operate under the old regime until:
- The termination of the contract that is awarded as the result of a process under
- the old regime, or,
- the decision is reached that no award is to be made; or
- for Dynamic Purchasing Systems (DPS), the termination of the last contract awarded by reference to the DPS within its lifetime, or
- the Qualification System (QS), the end of the last contract awarded by reference to the QS within its lifetime or where it has an unlimited duration, the end of the last contract by reference to the QS before its termination.
Therefore, DPS and QS set up under the relevant old Procurement regimes will remain compliant routes to market. In other words, it will be permissible to award contracts through these commercial tools set up under the old regime until they expire, are replaced, or cease to exist.
Achilles customers and their supply chains can be assured that the service provided complies with the Procurement Act 2023. All regulated organisations would be able to assess and prioritise their approach through either the existing QSN or a newly established QUDM. Please contact us to discuss further.
