Change is inevitable and nowhere is this truer than with contracts. It is almost inevitable that the moment a contract is signed it is out of date and in need of revision; and this goes on throughout the contract’s life. However, in the world of public procurement change is regulated and this regulation is itself changing under the new Procurement Bill.
The direction of travel in the new Procurement Bill is clear. There will be far greater flexibility allowing Contracting Authorities to make modifications to public contracts, however this comes with greater transparency and disclosure of contract changes than under the existing PCR 2015 regime. So, whilst on the one hand the more accommodating regime may encourage Contracting Authorities to make more modifications to their contracts, the risk is that with added disclosure through the Bill’s new Contract Change Notice procedure we will see greater scrutiny and many more challenges to contract modifications put before the Courts.
Greater scope to change a contract
In the Bill, the key provisions on modifying public contracts are found in sections 74 to 77 and Schedule 8. An authority may modify a public contract or a convertible contract if the modification:
·is permitted under Schedule 8 of the Bill; These are broadly similar to the current “doorways” (i.e. permitted modifications) in the existing PCR 2015 Reg. 72, but with some important differences;
·is not substantial; again a concept familiar from Reg. 72, or
·is a below threshold modification; which again has echoes in Reg. 72(5) of the current regime; and
·a modification to a contract which is a “light touch” contract.
More transparency of changes
A major development is clause 75 of the Bill which requires Contracting Authorities to publish Contract Change notices in addition to publication of modifications. The current regime in Reg. 72 PCR 2015 requires a contracting authority to give notice that a contract has been modified (and therefore the notification is after the event) where the modification is necessary because of economic and technical reasons, and where the need for modification was unforeseen.
However, the Bill provides that before modifying a public contract, or a convertible contract, a Contracting Authority must publish a contract change notice. Significantly, the Bill provides that a Contracting Authority may not modify a public contract or a convertible contract before the end of any standstill period provided in the relevant contract change notice, which introduces a greater risk of challenge of the modification while it is still live. However, it is noted that this notice requirement is voluntary, so it is not at all clear how this will work in practice. The notice requirements in the Bill will not apply in all circumstances. The Bill also requires that where a qualifying modification is made the authority must publish a copy of the contract as modified within 90 days.
The Bill is not yet final and may alter but we will all need to be much more careful when making changes to existing contracts under this new regime. These provisions, and our related actions, will no doubt be tested in the Courts in due course.
In2 the bargain 