The Procurement Act 2023 – What Is It & What Impact Will It Have on Tendering?
The Procurement Act 2023 is a significant piece of legislation that overhauls the UK’s procurement regime. It introduces a new set of rules for public bodies when procuring goods, services, and works. The Act is designed to simplify and modernize the procurement process, promote competition, and ensure that taxpayers’ money is spent wisely.
The implementation of the Procurement Act 2023 is being overseen by the Cabinet Office, who are working with a range of stakeholders including industry bodies, trade unions, and consumer groups to ensure the new procurement and tendering process addresses the flaws of the previous process and openly encourages fair competency between, small, medium, and large enterprises.
The Procurement Act 2023 – Key Objectives
The Procurement Act 2023 aims to achieve several key objectives, including:
- Creating a simpler and more flexible procurement system aiming to reduce bureaucracy and make it easier for businesses to bid for public contracts.
- Opening public procurement to new entrants, levelling the playing field for small and medium-sized enterprises (SMEs) and social enterprises to give them greater chances of success against larger national, international, and global enterprises.
- Taking tougher action on underperforming suppliers through the introduction of tougher sanctions for suppliers who fail to meet national standards (as outlined by governing industry bodies) and their obligations and commitments (as outlined within their contracts).
- Embedding transparency throughout the procurement process, increasing accountability from both the providers and the commissioners.
Impact on Tendering and Procurement
The Procurement Act 2023 is expected to have a significant impact on tendering and procurement. Some of the key changes that businesses can expect include:
- A new digital platform and simplified bidding process that is designed to make finding and bidding for tenders easier for suppliers.
- Changes to the use of frameworks, with three clearly defined framework types, each with their own qualities, being introduced:
- Open frameworks: permissible for a period of up to eight years, provided they are reopened for competition periodically (at three and five years). This will make it easier for new suppliers to enter the market and will increase competition for public contracts.
- Closed frameworks: may exceed the current four-year duration if a longer term is required given the nature of the works, services or supplies to be procured. This will provide greater flexibility for public bodies to procure complex goods, services, or works.
- Dynamic purchasing systems (DPS): electronic systems that allow public bodies to procure goods and services from a pool of pre-qualified suppliers, saving commissioners time and money. It will also serve as a great entry point for new businesses or small and medium-sized enterprises (SMEs) to gain experience and work.
- A new exclusions regime that is designed to prevent suppliers who pose unacceptable risks from bidding for public contracts.
Changes to the Current System
The Procurement Act 2023 introduces several changes to the current system. Some of the key changes include:
- A new set of procurement principles, ensuring procurement of work is conducted in a way that is transparent, with public bodies being legally compelled to provide all key information regarding the procurement process, evaluation criteria, and award decision, including feedback and scoring; fair, with public bodies scoring each supplier impartially and without bias, with specific focus on removing individuals from panels who may have conflicts of interest; provides value for money, with public bodies assessing the quality of services against the price provided; promotes accountability, public bodies having to offer justified decisions, especially in regards to spending; provides value to the local community (Social Value), addressing issues such as unemployment, carbon reduction/NetZero, economic disadvantages, etc.; and encourages innovation, utilising new approaches and technologies in delivery of services.
- A new approach to risk management that is designed to ensure public bodies procure goods, services, and works in a way that minimizes risk.
- A new framework for measuring social value: the National TOMS Social Value Portal (https://socialvalueportal.com/solutions/national-toms/)
Implementation of the Procurement Act 2023
The Procurement Act 2023 is being implemented in stages with phase 1 beginning in October 2023 and lasting until March 2024. This included the introduction of the new procurement principles and social value framework; the launch of the new digital procurement and tendering platform which will now serve as a single point of access and application for public contract information; and the opening of a training and support programme for public bodies and businesses regarding new procurement rules.
Phase 2 is set to launch in April 2024 and will last until October 2024. It will mark the introduction of the new exclusion regime, with specific focus on financial stability, criminal history, and environmental performance; the implementation of the new framework classifications (open, closed, DPS); and the installation of the new risk management approach, with more robust checks and due diligence being conducted earlier in the procurement and tendering process to identify and mitigate risks.
What Does this Mean for Businesses Moving Forward?
With the implementation of a single portal through which all public contracts will be accessible, tendering should become a much more accessible tool for businesses, especially SMEs looking to enter an industry or expand and grow their services. An account will have to be made, and businesses tendering for their own work will have to access the available toolkits and webinars provided by the Cabinet Office to develop a good understanding of the new rules and regulations of procurement and tendering.
Working with Your Tender Team Following the Procurement Act 2023
Your Tender Team will work with all clients to support them through these new changes, ensuring you and your business are tender ready. We are constantly monitoring for new information regarding the Procurement Act 2023 to ensure we can provide the most up-to-date, accurate information and guidance when taking you through the procurement process. See our Full Tender Write and Review & Evaluation service pages for information on how we can support you with tenders moving forward.