Following the issues that arose as a result of IR35, the procurement contracting market has taken another unforeseen hit due to Theresa May’s announcement of a snap election.  During every election comes an informal pre-election period known as ‘purdah’, during which time civil servants and ministers are subject to certain restrictions where their roles and conduct are concerned. This lasts for the duration of the election campaign.

The upshot of this is that many new procurements still in their early phases are now being put on hold. Organisations are being forced to sit tight and wait it out, causing surplus interim resources to be switched off.

We’re already seeing the effect of purdah on certain programmes involving large projects that have been placed on hold until the election is over. Many interim workers are unable to simply hold fire for two or three months as they await the start of work, and are instead returning to the market.

2017 has already been a time of uncertainty for interim workers due to IR35, but what exactly does purdah mean for the procurement contracting market?.

What Is Purdah?

Whenever there is a general election, the country experiences a pre-election phase which is informally referred to as ‘purdah’. This involves restrictions for civil servants, as well as government ministers, which act as a means of temporarily rolling back the activities of individuals working in government roles, in the run up to any election.

It may seem like a peculiar step, but it’s designed to minimise the possibility that government resources might be used in an inappropriate manner, in order to sway the results of the election. The idea is to ensure a fair election, and avoid government officials being criticised for their behaviour during this vital period. Purdah is usually invoked at the same time parliament dissolves, and comes to an end once the final results of the election have been announced.

Why Does Purdah Happen?

Purdah is a special measure intended to ensure the political administrative landscape remains stable, and that the civil service is fully under control, remaining in a neutral state. Purdah affects all MPs, civil servants, and cabinet ministers, however the order is also applicable to the Crown Commercial Service, as well as any additional executive agencies, like Companies House.

What are the effects of purdah?

With purdah in effect, the government remains responsible for ministerial duties, and numerous structures of state, which are expected to continue as normal, however, the civil service as a whole is expected to remain moderate, prudent and, in particular, discrete. Government officials are required to abstain from decision making and the proposal of any new policies, which might easily be overturned at the start of the new administration.

There is an additional, secondary function to purdah, as it also ensures that any political vessels with the potential to leak are protected, and the government’s carefully considered policies (not to mention public image) are not compromised. Purdah ensures a controlled environment that retains the state of the government, and ensures nothing undermines the campaigning process. Since purdah came into effect on the 3rd of May, activities have noticeably slowed in public administration forums.

Avoiding Claims That Decisions Have Been Politically Motivated…

There is a grey area occupied by local authorities during purdah, as there are no legal restrictions when it comes to activities in the run up to the election, but it’s still vital for civil servants to avoid the appearance of partisanship. If you are in such a position and feeling the weight of the responsibility to avoid such claims, there are several things you can do…

  1. If you have any forthcoming Key Decisions ensure they are reviewed, and anything that is particularly sensitive is re-scheduled, to ensure it does not fall within this year’s purdah period (3rd May – 7th June).
  2. Ensure that you neither start nor finish any major consultations during the purdah period.
  3. Make certain that your officers and members are fully aware of these guidelines and what they are able to publicise during purdah.

What Does Purdah Mean For The Procurement Contracting Market?

While purdah leaves a somewhat artificial taste in your mouth where administrative order is concerned, the purdah period has a marked effect on some areas of government, and public procurement is one of them.

Purdah guidelines are very clear on certain issues, however, when it comes to the position of local authorities who are in the procurement phase of a project, the rules are decidedly less clear.

While there are no legal restrictions curtailing  the activities of local authorities during purdah, they are advised to proceed with caution, in order to mitigate the risks of being challenged over decision making. Specifically, the risk that they may be accused of having political motivations for procurement decisions, rather than basing their decisions purely on the merits of respective prospects.

Signs Purdah Is Affecting Local Authorities’ Decisions…

As we are now in the purdah period for 2017’s unexpected election, there are certain ways in which local authorities are likely manifesting the desire to adhere to purdah and play it safe…

  1. Cancelling or rescheduling ITTs and SQs, which are in the early stages of procurement cycles.
  2. A reluctance to release any tender award notices.
  3. Withdrawing and then quickly re-issuing tender documents might indicate that purdah is being taken into consideration, and attempts are being made to avoid accusations of partiality.
  4. Seeming eagerness to issue ratifiable documents and contracts that might have occurred before the deadline on the 22nd April.
  5. The flipside to the last point, if you’re waiting on an exchange of contract documents, which are overdue, don’t be surprised if they don’t appear until June 9th at the earliest.

These commonly seen reactions to purdah are an indication of the uncertainty concerning the extent to which restrictions in the pre-election period apply to public procurements. Legally speaking, the Crown Commercial Service and additional executive agencies haven’t been banned from signing contracts during purdah, however, there is a prohibition preventing them from signing ‘large or contentious contracts’.

Given that there is no clear definition of what constitutes ‘large or contentious’, purdah usually results in extended periods where procurement comes to a standstill, ITTs are withdrawn, and there are repeated amendments made to any tender submission deadlines.

In previous purdah periods, some local authorities have taken the lead from executive agencies and complied in full with purdah, by hesitating to conclude or mobilise processes for larger contracts.

How Is 2017’s Purdah Period Characterised?

The big question for the procurement market at this time is whether executive agencies will be stalling procurement for the duration of purdah, and whether local authorities will be following their lead.

Theoretically, any tenders in progress during purdah shouldn’t feel the effects of the election. That being said, it’s very likely that the number of contracts issued during purdah will fall sharply, while any tenders that have yet to be released will be sidelined and delayed until things have settled down after the election.

The problem this time around is less the restrictions and consequences of purdah, and more the unexpected nature of the election. Theresa May’s announcement of a general election has thrown a spanner in the works for many independent contractors who were expecting new work to start in May and June, and have now been forced to seek other work to tide them over, while they wait for the unexpected election to be over, and the work they had lined up to kick in.

Purdah is a known complication in the procurement market, and its effects can usually be managed, as they are an anticipated complication. That was not the case this year, with the announcement coming as a shock, and leaving very little time for preparations.

If you’re waiting on a contract that doesn’t seem to be forthcoming (despite being overdue), and clarification responses have crawled to a snail’s pace, the unfortunate reality is that this situation will continue until the dust settles and the results of the election are official.

Any uncertainties concerning submission status should be queried with the awarding authority, but if you’ve noticed a marked decrease in activity since purdah kicked in, they are most likely assessing their options in light of the uncertainties where guidelines for local authorities are concerned.

Need Help?

Do you have any question about purdah that haven’t been answered? Or, are you an interim consultant who has been affected by purdah and need to find a new assignment?  Please do get in touch with us at procurement@insightexecutive.co.uk

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Richard Collins, Managing Director at IEG. Originally a design engineer, Richard has clocked up 10 years’ experience as an executive level recruiter within public sector procurement, finance and commercial management. Career highlights include generating circa £1.2m gross profit from two start-up businesses in five-years, but he also thrives on delivering and building teams. Post 5pm accomplishments include extreme sports and being Daddy to two beautiful daughters.
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