Procurement Act 2023 guidance: oversight

1. Procurement oversight is intended to help ensure the requirements of the Procurement Act 2023 (the Act) are adhered to, through the provision of recommendations and guidance, following investigation of a contracting authority’s compliance. This will help to ensure the benefits of the legislation are achieved.

2. Part 10 of the Act (Procurement Oversight) comprises 3 provisions which enable the procurement oversight regime to support contracting authorities’ compliance with the requirements of the Act:

1. Section 108: Procurement investigations provides that an appropriate authority may investigate a relevant contracting authority’s compliance with requirements of the Act and require a relevant contracting authority to provide documents and give assistance in connection with the investigation, as is reasonable
2. Section 109: Recommendations following procurement investigations provides that, following a procurement investigation, an appropriate authority may issue a recommendation (a section 109 recommendation) to a relevant contracting authority, if it considers that the contracting authority is engaging in action which is causing, or that is likely to cause, a breach of any requirement of the Act. The contracting authority must have regard to the section 109 recommendation
3. Section 110: Guidance following procurement investigations provides that, following a procurement investigation, an appropriate authority may publish ‘lessons learned’ guidance, to support compliance with the requirements of the Act by contracting authorities generally. Contracting authorities must have regard to this guidance.

3. The oversight powers in Part 10 of the Act may be exercised by an appropriate authority (which is defined in section 123 of the Act as 'a Minister of the Crown, the Welsh Ministers, or a Northern Ireland department') within its own jurisdiction.

4. To strengthen the ability to tackle any non-compliance, Part 10 of the Act introduces new powers for Welsh Ministers to issue recommendations to a devolved Welsh authority following an investigation to improve compliance (and to require progress reports on the implementation of recommendations) and to issue lessons learnt guidance to all contracting authorities following an investigation.

5. The Supplier Feedback Service (SFS), which sits within the Welsh Government, currently carries out informal investigations into complaints from suppliers about a Welsh contracting authority’s procurement activities.

6. The SFS has been renamed the ‘Procurement Feedback Service’ (PFS) and will continue to operate on the same basis, but utilising the power provided by section 108 of the Act. The PFS will sit within the new Wales Procurement Review Unit (WPRU), which has been established to operate the procurement oversight regime, as well as debarment.

The role of Wales Procurement Review Unit (WPRU)

7. The WPRU will manage the procurement oversight regime on behalf of Welsh Ministers.

8. The WPRU will monitor compliance across contracting authorities and will focus on investigations into contracting authorities who demonstrate patterns of repeated non-compliance across its procurements (referred to as institutional non-compliance). A pattern of non-compliance could also be across a number of different contracting authorities (referred to as systemic non-compliance) and this could mean that a number of contracting authorities are investigated in parallel. It is anticipated that an investigation into an individual procurement will only be in response to a supplier’s complaint, in line with SFS current practices.

9. Welsh Ministers will ultimately decide whether a section 109 recommendation is issued to a devolved Welsh authority following a procurement investigation.

10. The WPRU will manage the publication of any investigation reports, including any recommendations issued, and progress reports submitted by contracting authorities (or notice of a contracting authority’s failure to submit a progress report). They will be published on a dedicated gov.wales page. The mechanism for suppliers and other stakeholders to raise a concern regarding a contracting authority’s compliance will be through a dedicated mailbox: WalesPRU@gov.wales.

11. The WPRU will also work with other central commercial teams, as appropriate, to manage the release of any guidance resulting from a procurement investigation.

12. Further information regarding the operation of the oversight regime will be published on the gov.wales page from February 2025.

13. The oversight regime applies to all contracting authorities that are subject to the Act, except private utilities (as independent regulators already provide oversight of these organisations).

14. Government departments are excluded from the scope of the investigatory powers in the Act since Welsh Ministers already have non-statutory powers to oversee the contracting activities of government departments. However, government departments must have regard to any guidance issued under section 110 of the Act.

Procurement investigations

15. The WPRU (acting on behalf of Welsh Ministers) may investigate a devolved Welsh authority’s compliance with the Act at any time; there does not need to be evidence of a contracting authority’s non-compliance in order for an investigation to be triggered.

16. If an investigation is being conducted, Welsh Ministers may by notice require a contracting authority to provide relevant documentation as is reasonably required for the purposes of the investigation and/or request other assistance as is reasonable in the circumstances. This could include requiring the contracting authority to make personnel available to be interviewed. The notice issued by the Welsh Ministers will provide details of the documentation or assistance required, including the form of documentation.

17. Depending on the nature of the investigation, a notice may be sent directly to the named point of contact on the tender notice. Other notices may be addressed to the relevant commercial director, or equivalent.

18. A contracting authority that receives a notice as part of a procurement investigation must comply within the timeframe specified in the notice. Welsh Ministers will provide a minimum of 30 days to comply, from the day on which the notice is given. A contracting authority may request additional time to comply with the notice, but the Welsh Ministers (or an oversight unit acting on their behalf) is not obliged to agree. However, where a longer time frame is agreed, it will supersede the date given in the original notice.

19. The results of the investigation, including any recommendations issued, may be published.

Recommendations following procurement investigations

20. Where Welsh Ministers have conducted a procurement investigation and, as a result, considers that the contracting authority is acting in a way that either breaches, or is likely to breach, the requirements of the Act, the Welsh Ministers may issue a section 109 recommendation to that contracting authority.

21. Section 109(4) of the Act imposes a legal obligation on a contracting authority to 'have regard' to any section 109 recommendation that has been issued to it when carrying out covered procurements. To fulfil the duty to have regard to the section 109 recommendation, a contracting authority is not obliged to follow the recommendation, but it must properly consider and engage with it and, if a contracting authority decides not to follow it, it must have clear reasons for doing so and should record these in writing.

22. Section 109 of the Act recommendations are intended to bring contracting authorities back into compliance with the requirements of the Act and will specify the action(s) that the relevant contracting authority or authorities should take to achieve this, as well as the timing of these steps.

23. Section 109(3) of the Act sets out some limitations on the scope of section 109 recommendations; these are intended to maintain the contracting authority’s autonomy regarding how it, for example, implements procurement objectives and to protect the probity of the procurement procedure. Section 109 of the Act recommendations must not, therefore, relate to how the contracting authority:

1. complies with section 12 of the Act (procurement objectives) and section 86 of the Act (regulated below threshold contracts: duty to consider SMEs)
2. has regard to the Wales Procurement Policy Statement (WPPS) under section 14 of the Act
3. exercises its discretion in relation to a particular procurement, i.e. a section 109 recommendation must not relate to an individual procurement procedure.

24. However, section 109 does not prevent other, non-statutory recommendations being made with a view to addressing non-compliance relating to an individual procurement or to address other areas of procurement practice that fall outside of the boundaries of section 109 recommendations. It is therefore possible for non-statutory recommendations to be made as a result of a complaint raised by a supplier about a specific procurement. And it is possible that an investigation into repeated non-compliance could lead to both statutory and non-statutory recommendations being issued to a contracting authority. Welsh Ministers will need to be clear about the status of the recommendations issued.

25. Sections 109(5) to 109(8) of the Act make provision for a contracting authority to submit progress reports, where this is required by the section 109 recommendation. Where required to do so, a contracting authority must submit a progress report setting out the action it has taken as a result of the recommendation. If no or different action (to that specified in the recommendation) has been taken, the progress report must include the contracting authority’s reasons for this.

26. Welsh Ministers may publish these progress reports or, if the contracting authority has failed to submit one, a notice of that failure.

Guidance following procurement investigations

27. Section 110 of the Act allows Welsh Ministers to issue guidance following a procurement investigation, which contracting authorities are required to have regard to when considering how to comply with the requirements of the Act.

28. This guidance will adopt a 'lessons learned' approach and will allow Welsh Ministers to tackle compliance concerns identified by a procurement investigation which may affect a broader range of contracting authorities. All contracting authorities are subject to section 110, but Welsh Ministers can target guidance to the types of contracting authorities that would benefit from the particular lessons.

29. A Minister of the Crown may, with express consent from devolved administrations, be able to issue guidance to devolved authorities. Consent is not required unless if the guidance relates to, procurement under— (a) a reserved procurement arrangement, or (b) a transferred Northern Ireland procurement arrangement.

The Wales PRU gov.wales page (from February 2025).