The clock is ticking for the public and private sectors to prepare themselves for the Procurement Act 2023 to come into effect.
When and what to prepare for
The UK government developed the Procurement Act 2023 following Brexit, which consolidates four sets of existing regulations into one.
There are four core objectives, which include creating a simple and more flexible purchasing system, opening up public procurement to new entrants such as small businesses and social enterprises, taking tougher action on underperforming suppliers, and embedding greater transparency through the commercial lifecycle. The objectives work together with the aim of making the new procurement regime better than the former system – maximising the huge opportunity to embrace flexibility and innovation.
The changes will come into effect from the revised date of 24 February 2025, instead of the original date in late October 2024, as announced by the Cabinet Office in September. The new Labour government recently opted to delay the commencement of the act. This is ostensibly to allow time for the government to produce a new National Procurement Policy Statement (NPPS), which is a statutory statement that allows the government to set and communicate wider policy objectives to which public procurements should consider.
The proevious government laid out the current NPPS in parliament in May 2024. It therefore does not align with the new government’s strategic priorities for public procurement. And, as a result, the government has withdrawn it. The delay provides time for the government to produce a new NPPS, ensuring full alignment with the government’s strategy once the Procurement Act begins. Pagabo contributed to the survey for feedback that closed on 4 November.
The new NPPS
The Cabinet Office has stated the new NPPS will create a “mission-led procurement regime which builds on the transformative powers within the Act, and which meets the challenge of applying the full potential of public procurement to deliver value for money, economic growth, and social value.” This aligns with the objectives of the act: increased transparency, simplicity, and the move from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT). This will ensure that procurement functions will prioritise best value over lowest cost.
The government will draft the new NPPS before putting it out for consultation. This will allow adequate time for contracting authorities to review the updated strategic priorities. Then it will undergo a 40-day passage in parliament – consistent with the process followed for the existing NPPS.
In the meantime, work on the central digital procurement platform will continue – designed to host all the information required to support the transparency agenda and the Procurement Act’s new reporting obligations – with the Cabinet Office currently reviewing how to use the additional time for testing and deployment.
We can expect changing processes because of the act and new terminology to understand and use, but it is unrealistic to expect everyone to be procuring perfectly straight away. However, contracting authorities and suppliers should be ready to embrace the new procurement regime and its objectives – establishing lasting behavioural change.
Contracting authorities should examine their procurement pipeline between now and March. A key thing for them to consider is whether to adjust their timings or continue as planned using a compliant framework.
The Act will, hopefully, improve the way suppliers engage with contracting authorities. Though the new processes will become clearer as they are implemented, there are several key changes to become familiar with.
1. Notices
Under the current regime, notices focus on the procurement process – including tender notice and contract award. From 24 February, there will be a noticeable shift meaning that notices are required throughout the full procurement and contract lifecycle – changing the number required from four to 14. This starts as early as the new mandatory pipeline notice, which sets out information about a contracting authority’s public procurement pipeline where the anticipated spend is more than £100m within a defined reporting period. The notice will set out information on each public contract with an estimated value of more than £2 million.
The new notices will drive transparency throughout the procurement lifecycle, increasing inclusion and enabling greater scrutiny of procurement decisions and contract performance to maintain high standards.
For suppliers and especially SMEs, it will mean greater opportunity to engage in upcoming procurements, while tracking progress and performance. It will also increase transparency of underperformance, which should be considered given that it could impact the ability to bid for future work.
Contracting authorities will need to invest time into their procurement resources or engage with managing agents like Pagabo to deliver their frameworks, but increased administrative burden may be offset by the simpler system aiming to reduce duplication.
2. Procedures
The act streamlines the procedures under the current regime from seven down to two competitive procedures – open, and the new competitive flexible procedure. The new mechanisms aim to create maximum flexibility for procurement solutions and reduce barriers to entry.
Suppliers will need to undertake appropriate training to ensure bid teams are aware of the changes and where to access information. Suppliers are encouraged to engage with contracting authorities to contribute to pre-procurement planning stages to support the design of procurement solutions. Therefore, suppliers should allocate the appropriate resource and time to review published opportunities and raise clarifications with contracting authorities if the documents contain any ambiguities.
Contracting authorities are encouraged to utilise preliminary market engagement to determine the most appropriate route to market and ensure their internal policies and procedures align with the new mechanisms.
3. Exclusion and debarment
The discretionary and mandatory exclusion grounds will remain very similar, targeting non-compliance and poor performance but the scope widens under the act. The act drives the transparency agenda with plans to launch a debarment register housed on a central digital platform and the mandatory issue of a new notice detailing any unsatisfactory performance or contract breaches. Contracting authorities will need to review and verify applications against the live debarment register and any notices detailing unsatisfactory performance for each procurement opportunity.
There is some nervousness around this. However, there are several robust steps that precede a contractor finding themselves on the debarment register. This includes the contracting authority issuing notice to the government on the recommendation to place a contractor on the register, a thorough impartial investigation, and an eight-working day standstill period also applies to any debarment decision.
Suppliers should review their supply chains to ensure no organisation poses unacceptable risk. Policies and procedures should also be subject to a levelling up exercise to ensure the correct governance is in place.
Ultimately, the debarment list is there to prompt accountability, ensure compliance and protect the investments of those procuring works, providing ample incentive for suppliers to get things right and keep bidding for work into the future.
4. Performance
Procurement performance is a core focus of the Procurement Act and therefore it formalises and strengthens some of the existing requirements. This includes the issuing of at least three mandated performance measures prior to entering into contracts with an estimate value above £5m, the publishing of payment compliance information and the social value tender commitments which will form a contractual commitment and KPI.
There will be increasing analysis of the entire procurement lifecycle, from performance of frameworks through to individual contracts via the publishing of new notices, and suppliers will be assessed on whether things are performing as intended within bids.
Greater access to information may increase scrutiny and the volume of challenges. It could potentially increase opportunity or damage chances depending on what performance data shows. Reputational damage is a risk if performance is below the expected standard, but the act aims to encourage collaboration in pre-procurement stages to ensure performance measures are suitable and support everyone involved in procurement to improve processes and benefit from attention to detail.
5. Challenges
The provisions remain broadly the same, but there are some changes to the challenge process, including changing the standstill period to eight working days. Contracting authorities must provide all bidding organisations that have been assessed with feedback in the new assessment summary format. This drives transparency and will aid industry betterment by enabling suppliers to improve future bids.
Contracting authorities must now provide all bidding organisations that they have assessed with feedback in the new assessment summary format. This also drives transparency and will aid industry betterment by enabling suppliers to improve bids.
There are two pieces of advice for suppliers. The first – and most obvious – is to thoroughly digest all feedback using the assessment summaries provided. The second is to flag confidential information within bids. This ensures no one shares the information with other bidding parties, reducing competitive edge.
Where to go for further guidance
These are just some of the changes to be aware of ahead of February, and there are various free government resources available online to help prepare for a more successful and transparent future in procurement.
Despite the recently announced delay, there is no impact on the availability of content or any of the official materials, which will continue to be available up to and after the new commencement date. The official line from the Cabinet Office is that if you plan onstarting any training in the new regime, or have booked a ‘Deep Dive’ session, you should continue as planned.
If all goes to plan, prolonged time to learn and become familiar with the upcoming changes will lead to greater levels of practical understanding and confidence within procurement teams once the act comes into force.
For more information, please visit www.pagabo.co.uk or www.pagabo.co.uk/procurement-reform
Shamayne Harris is head of procurement at Pagabo.
