The Procurement Act 2023 was set to go live in October 2024, but instead, will now commence on the 24th of February, 2025.
When the UK left the European Union in 2020, the Government charted a new course for trade. The goal – a system that’s much simpler, more flexible, and empowers the nation’s commercial ambitions while upholding global commitments and compliance.
The Procurement Act 2023 represents a significant change in procurement practices, aimed at modernising and improving how procurement is conducted.
However, what are the key changes and implications, and how will this affect procurement moving forward? Continue reading to learn everything you need to know about the Procurement Act 2023.
What is the Procurement Act 2023?
The Procurement Act 2023 is a new law that will create a new and improved set of regulations in procurement. The Act will be in place as an improvement of the Public Contracts Regulations 2015. The Act is set to offer more benefits, and better the regulations that we have currently.
The overall goals of the Procurement Act 2023 are to:
- Enhance efficiency
- Ensure fairness
- Deliver better value for money
- Ensure competition
- Allow buyers to meet urgent demands quickly
- Promote and improve transparency by granting access to public procurement data
From 2023 to 2024, gross spending on public sector procurement was £407 billion in the UK – which was an increase from the year before. The new Procurement Act 2023 will reform how this is spent, making it a lot simpler and quicker. Overall, the Act will bring in a few much-needed improvements.
Procurement Act 2023 Timeline
The new Procurement Act was set to go live in October, but as mentioned, it’s been held off. But what happened in the months before the implementation of the Act was postponed?
- May 2022 – a draft of the Procurement Bill was published by the Government
- June 2022 – a draft of the Procurement Bill was released, and commenced its journey through the House of Lords
- December 2022 – the Procurement Bill was passed by the House of Lords to the House of Commons
- February 2023 – the Act was reviewed at the committee stage in the House of Commons
The final few stages before the Act was meant to commence looked like this. Instead of going live on its set date of the 28th of October, 2024, it will now go live at the beginning of next year.
Why Has the Procurement Act 2023 Been Delayed?
So, why has there been a delay? As we know, the new Procurement Act 2023 was meant to go live later this month, but it has now been delayed to February next year.
The Government stated that they want the new regime to ‘go live with a bold and ambitious statement that drives the delivery of the Government’s missions’. However, they need additional time to deliver this, with plans to prepare for a smoother transition and effective implementation for both contractors and suppliers across the UK.
Although we don’t know too much about the delay, we know that the Government’s new statement will still hold the principles of their original plan while pushing for social value, value for money, and creating more opportunities for social enterprises and smaller businesses.
Key Changes in the Procurement Act 2023
Now we know that the Procurement Act 2023 is set to go live at the beginning of 2025, what key changes can we expect to see? Let’s find out.
1 – Contracts Can be Awarded on Non-Financial Criteria
One of the main changes within the new Procurement Act is that contracting authorities are to choose the Most Advantageous Tender (MAT) – not just the cheapest.
This means they can now consider a much wider range of factors beyond price (which is similar to the weighted point system used under PCR15 rules). So, in some cases, contracts can be rewarded based on non-financial criteria, such as:
- Quality
- Innovation
- Environmental impact
The new Procurement Act will also allow contracting authorities more freedom for direct awards in certain situations. This could potentially be used to protect public health, like during COVID-19, and to address urgent needs.
2 – Support for SMEs and Local Businesses
The Act will introduce measures to support and encourage the promotion of both small and medium-sized enterprises (SMEs), and local businesses.
Contracting authorities will be able to reserve contracts for these types of businesses and will be obligated to consider them more often throughout procurement processes. Essentially, the Act will streamline the procurement process for these business types and make it easier for them to participate in the process.
By enhancing transparency, SMEs and local businesses can better understand why certain decisions are made during the bidding process, allowing them to bid more successfully in the future.
3 – Promotion of National Priority Outcomes
A significant focus of the Procurement Act 2023 is that contracting authorities must consider how their procurement can promote national priority outcomes, as defined under PPN 05/21. This could include the following, which all fall under social value:
- Creating new jobs
- Creating new skills
- Tackling climate change
- Reducing waste
Under the new Act, we know that public sector buyers will now be legally required to award contracts based on the Most Advantageous Tender (MAT), rather than the Most Economically Advantageous Tender (MEAT).
By making public sector buyers award contracts based on MAT, broader community benefits can be considered, such as creating jobs for the local community, reducing carbon emissions, and utilising local suppliers – again, all aspects that contribute to social value.
4 – New Rules for Transparency and KPIs
The Procurement Act 2023 will also bring a significant change regarding transparency and key performance indicators (KPIs). It will aim to ensure better value for taxpayer money.
The new Act will make public authorities set up and publish at least 3 KPIs for any contracts that exceed £5 million. The KPIs will help track supplier performance throughout the contract, which will mean stronger monitoring and improved effectiveness.
However, this excludes certain contracts, such as those awarded through framework agreements. At Procure Partnerships Framework, we understand that the new procurement landscape can be uncertain, especially with existing tight deadlines and competing priorities.
We offer support and guidance throughout the entire procurement process – from pre-procurement, to tender support and assisting with project delivery. Although KPIs aren’t actually required for frameworks under the new Procurement Act, we choose to manage our contractor partners against KPIs during these three key phases to assist you in your project outcomes:
- Pre-construction
- Live construction
- Post-construction
Who Will the Procurement Act 2023 Impact?
The Procurement Act 2023 will have an impact across the UK once it comes into effect at the start of 2025 – but who exactly will be impacted the most?
Government Agencies
When the new Act comes into play, Government agencies across the country will need to implement new procurement rules in compliance with the set regulations.
This could include having to update internal procedures, train more staff, and adopt newer technologies to meet the requirements of the Procurement Act 2023.
Private Sector Suppliers
Those who supply goods and services to the public sector will probably experience changes in how they’ll engage with procurement opportunities in the future.
The Act will likely increase competition while keeping the bidding process as simplified as possible to make it easier for everyone involved. It’ll also present new challenges, like having to adapt to new procedures and opportunities, such as increased access to procurement markets.
Procurement Professionals
The roles and responsibilities of procurement officers in the UK will likely evolve under the new Act. There’ll be a greater focus on both strategic procurement and sustainability, as well as the use of digital tools and training being put in place to help adapt to the Act’s new requirements.
What the Procurement Act 2023 Means for You
Now that we have a clearer understanding of the Procurement Act 2023 and its effects, what does it mean for you? The new regulations under the Act will apply to all procurement agreements created after the go-live date on the 24th of February, 2025.
Any existing agreements created before the go-live date under the previous Public Contractor Regulation 2015 (PCR15), will continue to be governed by PCR15. At Procure Partnerships Framework, we are Public Contractor Regulation 2015 (PCR15) compliant – this means we will continue to be governed by PCR15.
It’s important to note that both suppliers and contractors must still ensure their compliance with PCR15, even when the new regulations take effect.
To put simply, contracts awarded before the new regulations come into play in February next year must continue to follow PCR15 compliance until the contract expires or is replaced.
Streamline Your Procurement Process With Procure Partnerships Framework
We understand that public procurement is facing changes in the near future due to the implementation of the Procurement Act 2023. Here at Procure Partnerships Framework, we know how important it is to stay updated and informed as we enter this transition.
Public sector organisations can rest assured knowing that we offer the assurance, support, and guidance they need for their construction procurement activities. You can rely on our framework knowing that it’s reputable, flexible, and fully compliant. We have 5 specialised frameworks, which are available for several sectors:
- Construction
- Infrastructure
- Demolition
- Decarbonisation
- Retrofit
To further discuss your procurement needs, we encourage you to contact one of our regional Key Account Managers today. We look forward to supporting you and the delivery of your upcoming projects.
Procurement Act FAQs
We hope to answer any questions you have regarding the new Procurement Act 2023. For additional information, we encourage you to visit our industry Q&A to learn more.
Where can I find more guidance?
We aim to update any information regarding the Procurement Act 2023, allowing our readers to find out everything they need to know regarding the Act and any changes that occur.
To learn more, the Government has released training products to support the new Procurement Act, which you can find more information about here. You can also find out about e-learning modules that will be put in place for the likes of staff who run tenders.
How should contracting authorities prepare?
Contracting authorities can prepare for the new Act by reviewing existing procurement processes, notifying suppliers, informing staff of the new regulations, and ensuring that all procurement information is up to date. It could also be beneficial for contracting authorities to appoint a procurement expert to assist them.
Will the new Procurement Act 2023 differ from the old EU rules?
The main difference is that the new Act is UK-centric. There’ll be more links to previous EU-derived public contract regulations. Additionally, the new Act will introduce newer approaches, bringing in more flexibility.
