The new Procurement Act is set to bring about big changes. To begin with, we can no longer think of procurement and contract management as separate entities. The act will bring about more flexibility, transparency, and will cement current best practice in legislation. However, substantial challenges in its day-to-day delivery are likely to impact its success.
Of course, it’s great to see SMEs at the heart of the act and being granted more opportunities. Nevertheless, we could see them becoming overwhelmed with tenders and the burden of unsuccessful bid costs.
Embracing change
The Procurement Act 2023 has now come into force. The act heralds huge changes in the procurement process that are likely to shake up day-to-day activities and operations. This is particularly true when it comes to contract management.
The regulatory changes introduced by the act aim to improve public procurement processes, making the system more transparent and flexible. The changes are impactful, and in response, the industry needs to adapt quickly. Organisations must change how they manage projects and gather data to ensure they are compliant with the act’s new guidelines.
While this change is positive in principle and is rooted in the embedding of best practice in the industry, it’s important to consider that implementing the required changes will not be a straightforward process, and will require time, patience and skill-building.
First, the positives
The intention behind the new act is positive, and embedding best practice within the procurement process is undoubtedly a step forward. In addition to its benefits for planning, it is also intended to ensure equal treatment, assist proportionality, increase flexibility, and help suppliers achieve strategic objectives. The bidding process will be more flexible, while transparency will be improved through a new central digital platform. Adapting to new processes will also hopefully lead to upskilling across the sector. This would benefit both individuals and organisations in the long term.
In theory, suppliers will also be given visibility of stock much earlier in the process via the new central platform. This would have a positive impact and provide more transparency and opportunity for scrutiny. Having this early visibility means there is more scope to target opportunities and develop business according to supply levels. Doing so would result in a more streamlined and effective process.
SMEs have also been placed at the heart of the new act. Numerous barriers to bidding have been removed. This makes it easier for small businesses to participate and progress in a process that has previously been challenging when competing with larger organisations.
Despite these positive steps, the practicalities of implementing a new act are far from easy. Procurement professionals will need time to adapt.
Tackling the challenges
When implementing change there will undoubtedly be challenges. As it stands, preparation for the Procurement Act has felt somewhat rushed. We have experienced a flood of guidance, policy, regulations, and more recently, Procurement Policy Notes (PPNs). All this has meant busy procurement teams have been stretched further as they have attempted to get prepared. On the other side, many contracting authorities are also likely to overrun their implementation phases. As an industry, we are also nervous as we await full sight of the new central digital platform.
It’s also important to consider the capacity of industry professionals to dedicate the time needed to these changes. Bid teams across the sector are currently inundated with frameworks. There are alsoquestions over the market’s ability to respond. For example, the industry-wide skills shortage is a huge problem that will only be put under further strain.
At EN:Procure we have been working with our members to understand what they need in place to best prepare as well as any gaps in their solutions, and we have also offered training to help develop their skills. It’s important to consider that it will take time to adapt and for us to see the results of the act, and that the practicalities will take time to work out.
Another challenge to recognise is the effect removing barriers to SME participation will have. Making the process simpler for SMEs is positive but may also result in a long list of businesses competing in open tender and bidding for work. Short timescales and resources for bidding may also cause problems, and if too many businesses are bidding, processes may need to be adjusted.
Procurement Act 2023: Only time will tell
Delays in guidance being published, renewed focus on supplier KPIs, and skills shortages across the sector all mean that while it’s a positive step in principle, implementing the new Procurement Act will be a slow process.
With all change comes a period of adjustment, and while the essence of these changes is positive, the level of administration it will take to make them work may be an issue. Time will tell as to whether the Procurement Act will have the impact it has been designed to have, and as a sector it’s up to us to make the most of the opportunity for development it presents.To find out more about Efficiency North, please visit https://www.efficiencynorth.org
