Part 3: PUBLIC SECTOR PROCUREMENT
Section 39: Regulations about procurement
250.This section provides the Minister for the Cabinet Office and the Secretary of State with an enabling power to make regulations that impose duties on “contracting authorities” in respect of functions relating to procurement. It also provides Ministers with a power to issue guidance relating to those regulations, to which contracting authorities must have regard.
251.Subsection (2) provides that the exercise of functions relating to procurement includes preparing for entering into contracts and the management of contracts. So, for example, the regulations could make provision about the acceptance of electronic invoices.
252.For these purposes, “contracting authority” has the same meaning as it does under the Public Contracts Regulations 2015 (see subsection (3)), except that authorities whose functions are wholly or mainly devolved functions are excluded (subsection (4)).
253.Subsection (5) provides that the power may in particular be used to make regulations which impose:
duties to exercise functions relating to procurement in an efficient and timely manner;
duties relating to the process by which contracts are entered into;
duties to make available without charge information or documents, and processes (for example, accreditation) which are required to be completed in order to bid for a contract;
duties relating to accepting electronic invoices (including any systems that must be used to accept these); and
duties to publish reports about compliance with the regulations.
254.An EU Directive on e-invoicing (2014/55/EU) will enable a harmonised e-invoicing standard to be adopted at EU level. Contracting authorities will be obliged to accept e-invoices conforming to that standard that are issued in relation to a contract that was subject to the EU Directives’ procurement processes. However, the Commission has up to three years (from April 2014) to create and adopt the standard and the transposition deadline is November 2018. The Government may use the power in the Act to mandate the acceptance of e-invoices by UK contracting authorities before the EU common standard is adopted.
Section 40: Investigation of procurement functions
255.This section provides the Minister for the Cabinet Office and the Secretary of State with a power to investigate the exercise by a contracting authority of relevant functions relating to procurement. This puts on a statutory footing the Cabinet Office’s existing “Mystery Shopper” service.
256.“Contracting authority” has the same meaning as it has under section 39, except that Ministers and other Government departments are excluded. Ministers and Government departments will continue to comply with the current Mystery Shopper service as a matter of interdepartmental co-operation.
257.Subsection (3) gives the Minister the power to request from contracting authorities information or documents relating to the matters being investigated, which must be provided within 30 days of a notice being given. It also requires a contracting authority to give the Minister reasonable assistance with the investigation.
258.For the purposes of this section, “relevant functions relating to procurement” are functions to which the Public Contracts Regulations 2006 (S.I. 2006/5), the Defence and Security Public Contracts Regulations 2011 (S.I. 2011/1848), the Public Contracts (Scotland) Regulations 2012 (S.S.I. 2012/88) or the Public Contracts Regulations 2015 (S.I. 2015/102) apply, or would have applied but for the fact that a financial threshold was not met. The power will not be available in relation to a procurement that is excluded from the application of the regulations because, for example, the proposed contract is for the acquisition of land, or the application of the regulations would have obliged the UK to disclose information contrary to its essential security interests.
259.Subsection (6) provides that an investigation may also cover preparatory steps and contract management. So, for example, the investigation could cover the timeliness of payments to suppliers.
260.Subsection (7) excludes from the scope of the section functions of school governing bodies and Academy proprietors, and functions already regulated by the NHS (Procurement, Patient Choice and Competition (No.2) Regulations 2013 (S.I. 2013/500).
261.Subsection (8) allows the Minister to publish the results of an investigation.