The Procurement Act 2023: how public procurement is changing
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We break down the key elements of the new Procurement Act 2023 and how they will impact your business, aiming to ease any concerns and equip you with the knowledge to prepare for the changes.
By Lisa Reece, Senior Bid Consultant at BWL Group
The Procurement Act 2023 marks a significant transformation in public procurement, emphasising transparency, fairness, and flexibility. This comprehensive overhaul aims to create a more efficient and inclusive system, particularly beneficial for SMEs, startups, and scale-ups.
On the back of the Act receiving Royal Ascent in October 2023, we’ve seen a lot of online chatter (and some scaremongering) regarding how the changes will impact businesses.
In this article, we break down the key elements of the act and how they will impact your business, aiming to ease any concerns and equip you with the knowledge to prepare for the changes.
Central Digital Platform for Public Tendering
At the heart of the transformation is the introduction of a central digital platform. The platform has been introduced to revolutionise and simplify public procurement bidding.
What does this mean for me? You’ll have to register your business on the platform and provide company information – similar to registering with an existing tender portal. The platform will allow you to store several bids and access all opportunities within a single interface. This will simplify sourcing tenders and streamline how you respond to tenders.
A Shift in Procurement Objectives
A fundamental pillar of the Act revolves around the redefinition of procurement objectives, shifting to an era where the procurement process is no longer solely focused on cost considerations but expands to encompass the broader ideals of delivering exceptional value for money, maximising public benefit, and upholding integrity and high standards.
What does this mean for me? Your business is more likely to receive equal and fair treatment in the tendering process due to the safeguards that prevent suppliers from gaining an unfair advantage or undue disadvantage. This change introduces greater flexibility in the procurement process, allowing for adjustments even after procurement starts, provided it’s before key deadlines.
Transparent and Flexible Procurement
The Act mandates increased transparency through the entire procurement lifecycle, introducing new requirements for publishing notices. It also introduces a ‘competitive flexible procedure,’ allowing authorities to design competitions tailored to their contract and market needs.
What does this mean for me? It gives you full transparency from buying organisations and ensures contracts are awarded based on the ‘most advantageous tender’ rather than just the ‘most economically advantageous tender’.
Clearer Exclusion and Debarment Procedures
Current regulations for exclusion are based on misconduct and performance. The acts will see the introduction of a public debarment list for serious cases of misconduct and more detailed grounds for exclusion, including poor performance and risks posed by suppliers.
What does this mean for me? Your business or your competitors can be excluded based on performance, or the performance of associated suppliers and subcontractors.
Mandatory Key Performance Indicators
While in 2024, most contracts now incorporate KPIs, some buyers still don’t set KPIs during the tender stage. Contracting authorities are now required to set and publish at least three KPIs to ensure supplier performance is transparent and accountable.
What does this mean for me? As with most tenders and contracts, your performance will be monitored against a set of metrics defined by the buyer. They’ll ensure your service and performance adhere to the required standards from the commencement of the contract. You will need to identify how you will monitor and report on these KPIs – either through manual data collection or a system.
Better Inclusiveness around the Opportunity Pipeline
The Act fosters an environment conducive to innovation, offering opportunities for suppliers to participate in the public sector procurement process more effectively. Contracting authorities will be required to consider barriers facing SMEs, divide larger contracts, and encourage preliminary market engagements to foster innovation.
What does this mean for me? If you are an SME, tenders will become more inclusive to prevent barriers to entry. A buyer might split a large contract into smaller ones so that smaller businesses can deliver a portion of the work.
Sector and Country Specific Guidance
The Act provides detailed guidance for specific sectors like utilities, defence, security, and below-threshold contracts. For example, defence and security contracts will have higher thresholds for light touch and concessions. There is also specific guidance for Ireland and Wales. For example, there will be differences for devolved Welsh authorities as per the Government of Wales Act 2006.
What does this mean for me? Your business must familiarise themselves with the sector-specific and country-specific rules to ensure compliance, and to leverage the opportunities presented by the new regime.
| Aspect | England | Wales | Northern Ireland |
| General Framework | Follows the Procurement Act 2023 | Follows the Procurement Act 2023 but may implement additional Welsh-specific requirements under the Government of Wales Act | Follows the Procurement Act 2023, with specific adaptations for cross-border procurements and regional needs |
| Devolved Competencies | N/A | Welsh authorities have powers to make regulations in certain areas, potentially leading to variations in procurement rules | Certain competencies are devolved, which could affect procurement, particularly in sectors like health and education |
| National Policy Statements | Adheres to UK-wide procurement policies | May issue Wales-specific procurement policy statements to guide procurement practices | Generally follows UK policy but can have specific guidelines reflecting regional priorities |
| Thresholds | Applies UK-wide thresholds as defined in the Act | While thresholds follow the Act, Wales can have additional criteria or considerations for Welsh authorities | Similar to England, but specific considerations may apply to accommodate local market conditions |
| Sector-Specific Rules | Uniform application across different sectors | Sectors like health and education in Wales might operate under slightly different rules due to devolved powers | Certain sectors may have tailored rules or exemptions, particularly in areas of devolved responsibility |
| Exclusions and Debarment | Uniform rules for supplier exclusion and debarment | Potential for Wales-specific criteria or procedures for excluding suppliers, reflecting Welsh policy objectives | Similar to England, but may include provisions that consider the unique legal and commercial landscape of Northern Ireland |
| Transparency and Reporting | Standard UK-wide requirements | Welsh authorities might have additional reporting requirements or transparency measures | May have unique transparency and reporting standards, especially in cross-border procurements |
How can you make sure your business is ready?
While nothing will formally change until October this year, this interim period is a great opportunity to brush up on the details of the act and get your team ready for the change. The government will also provide further guidance on navigating the new systems and processes later this year.
To help your organisation understand the impending changes, we suggest:
- Assigning a Procurement Act Champion and allow them to take responsibility for understanding the changes. This can include delivering a brief, collating and sharing key information and guidance materials, and being available to answer questions.
- Creating a detailed plan outlining the steps needed to align your business with the new Act. This should include updating procurement policies, revising contract templates, and implementing new procedures for transparency and reporting. Set clear deadlines and assign responsibilities to ensure accountability.
- Delivering training to your procurement, business development, and bid teams. Ensure they understand the new regulations and how to apply them in practice. This might involve workshops or webinars.
- Communicating with your suppliers about the changes and how they will impact your procurement processes. Encourage open dialogue to address any concerns or questions they may have. This will help maintain strong, compliant, and mutually beneficial relationships.
- Implementing new systems or tracking processes to ensure you have the data and records to demonstrate KPI compliance in your new contracts. While only a suggestion, a system could remove the administrative burden and provide a seamless collation of data from staff in the field, such as task completion, attendance times, and audit completion.
Summary of changes
| Current Regulations | Procurement Act 2023 | |
| Flexibility in Procedures | Prescriptive procurement procedures derived from European Directives | Introduction of a ‘competitive flexible procedure’ allowing authorities to design competitions to suit their contract and market needs, providing greater flexibility. |
| Award Criteria | Focus on the ‘most economically advantageous tender’ | Shift to the ‘most advantageous tender,’ encouraging authorities to consider factors beyond pricing, aligning with the UK’s broader sustainability goals. |
| Transparency & Reporting | Specific requirements for transparency but less comprehensive | Increased obligations for publishing notices throughout the procurement lifecycle to enhance transparency, which may increase the administrative burden. |
| Exclusions & Debarment | Grounds for exclusion primarily based on misconduct and performance | Introduction of a public debarment list for serious cases of misconduct and more detailed grounds for exclusion, including poor performance and risks posed by suppliers. |
| Innovation & Collaboration | Limited provisions | Duty on contracting authorities to consider barriers facing SMEs, option to divide larger contracts, and encouragement for preliminary market engagements to foster innovation. |
| Key Performance Indicators (KPIs) | Less emphasis on KPIs | New requirement for contracting authorities to set and publish at least three KPIs to ensure transparency and accountability in supplier performance. |
| Supplier Treatment | Equal treatment and non-discrimination as flown down from European Directives | A nuanced approach allowing different treatment of suppliers when justified, without placing any at an unfair advantage or disadvantage, reflecting a move towards greater procedural flexibility. |
| Procedure Adaptability | Limited scope for changing terms after the procurement process starts | Flexibility for contracting authorities to modify terms of procurement even after commencement, provided key deadlines are respected. |
We are here to support you and your business
If you’d like to discuss anything in this article, how the changes will impact you, or if you need further support in navigating these changes, please contact us.
Alternatively, you can email us at enquires@bwlgroup.co.uk.