The Procurement Act 2023 (the Act) is set to transform how public bodies in Britain procure goods and services. Scheduled to take effect on 24th February 2025, this landmark legislation introduces significant updates to the rules that govern public procurement. The Act aims to simplify processes, increase transparency, and align Britain’s procurement framework with global standards.
If your organisation procures goods and services through public sector contracts, understanding the Procurement Act 2023 is crucial. This blog outlines the key areas that the sector must consider and how you can leverage the new regulation to its full potential. You can access the full Procurement Act 2023 government guidance here.
What is the Procurement Act 2023?
The Procurement Act 2023 refines and updates the existing Public Contracts Regulations 2015, retaining many of its core principles whilst introducing several major changes. Here’s an overview of the key updates:
- Simplified bidding processes: A new competitive flexible procedure will allow bespoke, multi-stage procurement methods.
- Greater transparency: A central digital platform will consolidate procurement notices, supplier registrations, and bid opportunities. This central platform will be free to use and will go live here on 24th February.
- Improved access for Small and Medium Enterprises (SMEs) and Voluntary, Community, and Social Enterprises (VCSEs): Barriers for small and voluntary organisations will be reduced, with strengthened provisions for 30-day payment terms.
- Enhanced oversight: A new Procurement Review Unit (PRU) will replace the existing Public Procurement Review Service, ensuring compliance and addressing issues such as late payments and supplier misconduct.
- Stronger supplier accountability: New grounds for excluding suppliers, including environmental misconduct, competition law infringement, and poor past performance.
Who does the Procurement Act apply to?
The Act applies to public procurements commenced on or after 24th February 2025. Public sector organisations, suppliers, and contractors will all need to adapt their processes to align with the new regulations.
Key changes to be aware of
Methods of award
The Act introduces three procurement methods:
- Open procedure: A single-stage process, largely unchanged from the current regime.
- Competitive flexible procedure: A new, adaptable multi-stage process allowing limits on bidder numbers or lots.
- Direct award: Restricted to extreme urgency (e.g., pandemics) or framework agreements.
Increased notices
Public bodies must now publish 13 types of procurement notices, a significant increase from the existing three. Here’s a summary of each of the notices:
- Pipeline Notice: For contracts exceeding £2 million.
- Planned Procurement Notice: Informs the market of an upcoming tender.
- Preliminary Market Engagement: When preliminary market engagement takes place.
- Tender Notice: Previously known as the Contract Notice.
- Transparency Notice: Used when a contract is awarded without a competitive tendering procedure.
- Below-Threshold Tender Notice: For contracts below the Act’s financial threshold.
- Procurement Termination Notice: Replaces the Voluntary Ex Ante Transparency (VEAT) Notice but no longer provides immunity from claims of ‘ineffectiveness’.
- Contract Award Notice: When a public body awards a contract.
- Contract Details Notice: Published at the end of the award process.
- Below-Threshold Contract Details Notice: As per the above, but for notifiable below-threshold awards.
- Contract Change Notice: Required before modifying a contract that exceeds set thresholds.
- Payments Compliance Notice: Confirms adherence to 30-day payment terms.
- Contract Performance Notice: Annual updates on Key Performance Indicators (KPIs) for contracts over £5 million.
- Contract Termination Notice: Details the grounds for contract termination according to the client.
Excluding suppliers
Public bodies will have new grounds to exclude suppliers to ensure higher standards of compliance and accountability. Suppliers can now be excluded based on the following:
- Environmental misconduct or breaches of competition law.
- Poor performance on previous public contracts.
- Inclusion on a central debarment list, barring non-compliant suppliers for specified periods.
- The behaviour of their subcontractors or associated companies.
Framework agreements
The Act introduces open frameworks, which can last up to eight years. These frameworks must open to new suppliers at least once in the first three years and subsequently every five years.
From Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT)
Under previous regulations, Contracting Authorities were required to award contracts based on the Most Economically Advantageous Tender (MEAT). The Act revises this to Most Advantageous Tender (MAT), allowing authorities to consider a broader range of criteria beyond price, such as social value and sustainability.
How to prepare for the Procurement Act 2023
The Procurement Act 2023 marks a significant shift in the UK’s procurement landscape. Whilst its primary goal is to simplify and modernise procurement processes, the new rules demand preparation and adaptation from both public bodies and suppliers.
By familiarising yourself with the changes, leveraging available resources, and aligning your processes early, you can position your organisation for success under the new regime. To prepare, ensure the following steps are completed:
- Review and update your procurement policies: Ensure procurement processes align with the new transparency and accountability requirements.
- Familiarise your procurement teams with the Act: Access government guidance and training resources to stay informed.
- Engage with framework providers: Work with pre-approved frameworks to streamline procurement under the new rules.
- Assess and update contract monitoring procedures: Ensure compliance with new reporting and contract notice requirements.