The New UK Government: A Guide to Engaging with Public Bodies

“1) Kickstart economic growth
2) Make Britain a clean energy superpower
3) Take back our streets
4) Break down barriers to opportunity
5) Build an NHS fit for the future”

In many cases, procurement is where policy meets reality, and this will be no different for the Labour Government. For the Labour Government to achieve its five missions it will require a significant amount of procurement and support from the private sector. This article discusses some of the main points organisations should consider when engaging with the public sector, including:

1. Conduct during a procurement
2. Consultant lobbying
3. Recruitment considerations

Conduct During a Procurement

The UK Government (and other public bodies) must, in most cases, procure in accordance with the ‘Principles of Procurement’ (regulation 18 of the Public Contracts Regulations 2015 (“PCR”)). These principles oblige public bodies to treat suppliers equally, without discrimination, and to act in a transparent and proportionate manner. 

Whilst we have focussed on the current procurement regime for this article, it should be noted that the UK’s new procurement regime goes live on 28 October 2024. Section 16 (Preliminary market engagement) of the Procurement Act 2023 appears to be very similar to the current position under the PCR, with a few specific exceptions. For example, the obligation to publish a preliminary market engagement notice or explain, in the tender notice, why it did not publish such a notice (see Section 17 of the Procurement Act 2023). For a high-level summary of the key changes to the UK’s procurement regime, please see our previous article, The Procurement Act 2023: Key changes to be aware of.

Market engagement

The ability to undertake pre-market engagement is expressly stated in regulation 40 of the PCR, and pre-market engagement appears to be encouraged, as evidenced in the Sourcing Playbook. The Principles of Procurement do not prohibit public bodies from undertaking preliminary market consultations and then using any advice or feedback it receives in planning and conducting a procurement (including understanding the barriers to suppliers submitting a bid), provided it does not distort competition nor breach the Principles of Procurement. 

When we advise public bodies, we strongly advocate for a comprehensive and meaningful engagement as effective market engagement can, amongst other things:

• raise awareness;
• provide an opportunity to test assumptions and approaches;
• support the achievement of value for money;
• remove barriers to participation; and
• ultimately supports the success of the procurement.

When on supply-side and when engaged sufficiently early to provide bid support, we generally advise engaging with public bodies and their market engagement exercises as much as possible, including asking strategic clarifications. This is because it provides an opportunity to:

• better prepare and plan for the procurement, including supporting a decision on whether to invest in bidding;
• better understand the public body’s requirements/what the public body is looking for; and
• influence the public body’s requirements/approach to procuring.

Risks

However, for many reasons organisations should still approach engaging with public bodies with caution, including:

• Increased risk of challenge: Organisations should be mindful of public bodies’ procurement obligations, as an organisation’s conduct could result in a particular procurement being more likely to be challenged. For example, if an organisation is highly vocal about a particular aspect of the specification which may be perceived as favouring that organisation, other organisations/bidders may perceive this as unfavourable to them and allege that the public body has been unduly influenced in its preparation of the procurement. 
  
  
• Exclusion: Public bodies are under an obligation to ensure equal treatment of suppliers during a procurement. Organisations should be mindful that where there are no other means to ensure equal treatment, a public body may, as a last resort, have to exclude an organisation in order to ‘level the playing field’. To mitigate against the risk of exclusion, organisations should consider putting in place safeguards such as:
  
  
  • Separating personnel who have been involved in assisting the public body with preparation of the procurement from those involved in preparing bids for the procurement.
  • Not seeking to unfairly influence the public body. 
  • Communicating with the public body via the agreed channels for that procurement. 
    
    
  Public bodies will need to ensure that they have adequate safeguards in place. For example, ensuring that they provide all potential bidders with all the relevant information exchanged or arising from prior involvement by a particular organisation. Organisations should also be aware that there are exclusion grounds in the Standard Selection Questionnaire (PPN 03/24) that concern conflicts of interest and prior involvement in the procurement.

• Conflict of Interest: Engagement with a public body may, over time, create a conflict of interest. For example, a professional relationship may develop, creating a situation that has the potential to unduly influence the award of future work. An organisation may be excluded from the procurement when a conflict cannot be effectively remedied by other, less intrusive means.
  
  
• Disclosure of Communications: Communications that are perceived to be inappropriate could result in reputational harm to an organisation. Many public bodies are within the scope of the Freedom of Information Act 2000 and the Environmental Information Regulations 2004, subject to the specific facts. This means anyone has the right to ask for any recorded information a public body holds, and the public body must provide it where possible, subject to exemptions. As a result, an organisation’s correspondence may be required to be provided. If there is a procurement challenge (or any other type of claim), communications or documents that are relevant to the claim may be required to be disclosed.

Consultant Lobbying

In the UK, “lobbying” is when individuals, groups or organisations seek to influence Government policy or decision-making. The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 (“Lobbying Act”) regulates ‘consultant lobbying’. A person is carrying out ‘consultant lobbying’ if:

1. in the course of a business and in return for payment, the person makes communications on behalf of another person or persons;
2. the person is registered under the Value Added Tax Act 1994; and
3. none of the exceptions in the Lobbying Act apply.

Communications are:

1. oral and written communications; 
2. made personally to a UK Minister of the Crown or permanent secretary; and
3. relating in any way to:
   
   • Government policy;
   • legislation;
   • the award of contracts, grants, licences or similar benefits; or 
   • the exercise of any other Government function.

Where lobbying does not fall within the definition of ‘consultant lobbying’, it is not regulated by the Lobbying Act. 

Any consultant lobbying activity that takes place without the necessary registration is an offence, even if committed unintentionally. Under the Lobbying Act, consultant lobbyists must disclose clients’ names irrespective of expectations of client confidentiality. Consultant lobbyists must update their disclosure every quarter.

Although an offence may be caused by a consultant lobbyist, there could be significant reputational harm to an organisation if it is associated with that consultant lobbyist. Accordingly, organisations should ensure that they act with caution when engaging third parties to conduct communications on their behalf to ensure they do not fall foul of the Lobbying Act.

Recruitment Considerations

Given the likely change in government personnel following the change in Government, it may be the case that public sector employees are looking to move into private sector roles. Organisations should be aware that conditions may apply to former public sector employees when leaving their posts, including wider “lobbying” restrictions. These conditions may be imposed by the individual’s former employer or The Advisory Committee on Business Appointments (ACOBA) and could be made publicly available. Therefore, organisations should take care when such conditions apply to an employee as a public breach of those conditions could result in negative publicity for the organisation. 

We have been increasingly advising on the topics discussed in this article, as is expected due to the change in Government. If you have any queries or concerns about engaging with public bodies (including lobbying and recruitment considerations) please contact us.