Procurement Reform: Procurement Act 2023 SME update

14th March 2024

Following on from our Blog Post in July 2023, we can now provide a more detailed update on the Procurement Act 2023 and the changes it will bring about for SMEs that tender into the public sector.

To help guide both buyers and suppliers through the changes and the impacts of the new regime, the Cabinet Office and Government Commercial Function are currently rolling out their Transforming Public Procurement programme, to ensure the aims of the new Act deliver on the objectives to improve the way public procurement is regulated, by:

  • creating a simpler and more flexible, commercial system that better meets our country’s needs while remaining compliant with our international obligations.
  • opening up public procurement to new entrants such as small businesses and social enterprises so that they can compete for and win more public contracts.
  • embedding transparency throughout the commercial lifecycle so that the spending of taxpayers’ money can be properly scrutinised.

The Procurement Bill received Royal Assent in October 2023. At the time of writing, we are awaiting the commencement of the 6 months’ notice period that applies, before ‘go-live’ of the new Act. Go-live is currently scheduled for October 2024. The existing legislation (Procurement Regulations 2015) will apply until the new regime goes live and will also continue to apply to procurements started under the old rules.

Headline changes:

  • The 7 existing procurement procedures are being replaced by 3 procedures.
  • There will be a central register (Single Supplier database) which will capture all core information – the intention of which is that suppliers do not have to repeat the submission of standard information more than once across bids.
  • Buyers will be required to publish additional notices that support the new transparency requirements of the Act. Enabling wider access to data on procurement and also contract management.
  • There will be a centrally managed list of banned suppliers that have been excluded under certain grounds, this will also include sub-contractors that may be disbarred.
  • Utilities Regulations and Defence Regulations (which are currently operate separate to, but alongside the Public Contract Regulations) will also be incorporated into the Act.
  • For the procurement of healthcare services (relevant to patient treatment) the new Provider Selection Regime applies, this came into force on 1st January 2024. Specific in scope CPV codes apply to the use of this regime, other support services to the NHS shall be covered by the Procurement Act. More detailed information here.

Getting your business ready

Once the new regulations commence, you will see them take effect through the contract notices and procurement procedures that are published after the go-live date.

To manage the impact of the changes on your tendering activities, we recommend you undertake the following preparations, during this interim period:

  1. Understand the new “Flexible Competitive Procedure” (FCP). The FCP will enable buyers to design a procurement process which gets the best from the marketplace. Transparent communication of the design of this process will be communicated to potential bidders. This will enable buyers and suppliers to work together through procurement processes, enabling the buyer to use relevant stages and negotiations which support innovation and get the best from the market. This is great news for businesses, particularly at market engagement stage, as it facilitates insight into the building of the requirement on a level playing field. Supplier contributions and market knowledge will be considered in defining the procurement process.
    Prepare: Consider how you can bring what’s developing in your industry to the buyer’s attention so that the procurement and contract scope take this this into account. For straight forward procurements and contracts, the Open Procedure will be applied (and will remain largely the same).
  2. Understand the new transparency requirements and data that will be published by buyers relating to the high value contracts that they have awarded. We understand that this will apply to high value contracts (likely to be upwards of £5,000,000), where buyers will be required to publish KPIs on the performance of their contracts.
    Prepare: The transparency requirements may have an impact upon the publishing of data relating to your organisation, by understanding them, you can work with buyers to prepare for the KPI and contract data publishing that is required. Also prepare for the market intelligence that this data may provide, on the tenders and contracts that you are seeking to win. This transparency gives the opportunity for a far improved understanding of current contracts and the incumbent supplier’s performance under the contract against key KPIs.
  3. Understand the increased requirement for buyers to more fully debrief against scoring criteria.
    Prepare to learn in greater detail, how for unsuccessful bids, you will benefit from a more detailed understanding of what was absent from your bid and also what worked well. How will you embed this feedback in your bidding processes? More detailed debriefs will help you to prepare strong content in your bid library and may better inform your bidding practices.
  4. Understand that the current basis of award known as MEAT (Most Economically Advantageous Tender) is moving to MAT (Most Advantageous Tender) under the new Act.
    Prepare for tenders that may have less emphasis on the commercial factors and more balance across other areas such as technical, quality and social value criteria, for example. Commercial pricing and value for money will remain important, but this change places less emphasis directly upon them. Prepare for how in the market engagement stages of future procurements, you and your industry can work with and inform buyers of key areas for consideration in their evaluation criteria, beyond pricing.
  5. Understand the Single Supplier database and how it will help you create bidding efficiencies. We anticipate that this “tell us once” central record will reduce duplication of information and reduce procurement documentation – as it is intended to capture key information currently requested at the SQ stage of a procurement process.
    Prepare It is likely that an enhanced Contracts Finder platform will facilitate this but we will continue to monitor this. You will need an understanding of how this will integrate/interact with the procurement portals to which you are currently registered and subscribed. We advise making sure you are receiving their updates and that you have current registrations with Contracts Finder/Find a Tender with up to date email and log in information.

 

The Government Commercial Function has provided helpful supplier guidance, which can be accessed here:

 

You can also follow the Cabinet Office for updates from source. You may find the following links useful:

 

We recently updated subscribers to our quarterly newsletter on the changes the Procurement Act is introducing. If you would like to receive updates such as this straight to your inbox, please click the link below to sign up to our newsletter.

 

Please continue to “watch this space” through the links we are sharing on social media and the future updates that we publish through our blogs and newsletters, to ensure you benefit from the latest information on the roll out of these important changes.

 

Note: this content was written prior to Procurement Act guidance being issued by the Cabinet Office.

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