In 2020, when the UK left the European Union, the government charted a new course for trade. The goal – a system that’s simpler, more flexible and empowers the nation’s commercial ambitions, all 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? What are the implications, and how will this affect procurement moving forward. In this blog, we’ll be answering these questions along with outlining everything you need to know about The Procurement Act 2023.
What is the Procurement Act 2023
The Procurement Act 2023 is essentially a new law that will create a new and improved set of regulations in procurement.
The goals of the Procurement Act 2023 is to enhance efficiency and allow buyers to meet urgent needs more quickly, ensure fairness and competition, promote transparency and improve it by granting access to public procurement data and integrate social and environmental considerations into procurement decisions.
When will the regulations change?
The new procurement regulations, set in March 2024, are expected to take full effect on October 28th, 2024.
What This Means for You
- These regulations will apply to all procurement agreements created after the go-live date. Any activity under these new agreements must comply with the new regulations.
- Procure Partnerships Framework is Public Contractor Regulation 2015 (PCR15) compliant, existing agreements created before the go-live date under the previous PCR15 framework will continue to be governed by PCR15.
- However, both suppliers and buyers must still ensure compliance with PCR15, even after the new regulations take effect.
In conclusion, contracts awarded before the new regulations come into play (expected October 28th) will continue to follow PCR15 compliance until the contract expires or is replaced.
Key Changes in the Procurement Act 2023
Award Criteria
The new Procurement Act empowers contracting authorities to choose the “Most Advantageous Tender”, not just the cheapest. This means they can consider a wider range of factors beyond price, similar to the weighted point system used under the old PCR15 rules.
However, unlike PCR15, price doesn’t have to be the deciding factor anymore. In some cases, contracts can be awarded based on non-financial criteria like quality, innovation, or environmental impact.
The Act also gives authorities more freedom for direct awards in specific situations. This could be used to protect public health (like during the COVID-19 pandemic), maintain safety, or address urgent needs.
Supporting Local Businesses
The Act encourages promoting UK businesses, particularly small and medium-sized enterprises (SMEs) and social enterprises. Authorities can reserve certain contracts for these groups and are obligated to consider them more throughout the procurement process.
Sustainability and Social Value
A significant focus of the Procurement Act 2023 is that Contracting authorities must also consider how their procurement can promote ‘national priority outcomes’, as defined under PPN 05/21. To name a few, this includes creating new jobs, new skills and tackling tackling climate change and reducing waste which all falls under social value.
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).
The MAT approach encourages consideration of broader community benefits, such as local job creation, reduced carbon emissions and utilising local suppliers – all aspects that contribute to social value.
New rules for transparency and KPIs
The Procurement Act brings a significant change to ensure better value for taxpayer money. Public authorities must now publish at least 3 key performance indicators (KPIs) for contracts exceeding £5 million. These KPIs will be used to track supplier performance throughout the contract. Stronger Monitoring and Improved Effectiveness.
However, this excludes certain contracts such as those awarded through framework agreements.
The new procurement landscape can be uncertain, especially with existing tight deadlines and competing priorities. That’s where we come in. Procure Partnerships Framework offer support throughout the entire procurement process – from pre-procurement to tender support to assisting with project delivery.
Even though KPIs are not required for frameworks under the new Procurement Act we manage our contractor partners against KPIs during the pre-construction, live construction and post construction phases to assist you in your project outcomes. You can see examples of these KPIs here.
Who will the Procurement Act 2023 will impact?
Government Agencies
Government agencies will need to adapt their procurement practices to comply with the new regulations. This may involve updating internal procedures, training staff, and adopting new technologies to meet the requirements of the Act.
Private Sector Suppliers
Businesses supplying goods and services to the public sector will experience changes in how they engage with procurement opportunities. The new Act presents both challenges, such as adapting to new procedures, and opportunities, such as increased access to procurement markets.
Procurement Professionals
The roles and responsibilities of procurement officers will evolve under the new Act. There will be a greater emphasis on strategic procurement, sustainability, and the use of digital tools, necessitating ongoing professional development and training.
Additional Resources and learning materials.
To learn more about the Procurement Bill the Government has released training product to support on the new Procurement Act: which can be located here. Furthermore, e-learning modules have also been created for staff who run tenders and or let procurement & commercial professionals whose main role is to manage suppliers or contracts.
The public procurement landscape is undergoing significant changes with the implementation of the Procurement Act 2023. At Procure Partnerships, we understand the importance of staying informed during this transition.
We offer public sector organisations the assurance and support they need for their construction procurement activities. Our framework is reputable, flexible and fully compliant, with specialised frameworks for Construction, Infrastructure, Demolition and Decarbonisation and Retrofit.
Reach out to one of our regional expert Key Account Managers today to discuss your procurement needs and how we can help support the delivery of your projects.
