Estimated reading time: 4 minutes
A new act of UK Parliament, the Procurement Act 2023, will change how the UK awards and manages public contracts. It aims to make the buying process faster, simpler and more open. It also aims to make it more responsive to the needs of the public, buyers and suppliers.
The reforms will shake up our outdated system and improve the way procurement is done, so that every pound goes further for our public services.
UK Government Commercial Function
How will this Act bring about changes and what impact can we expect?
The impending introduction of the Procurement Act 2023 aims to streamline processes, enhance transparency and stimulate innovation in the awarding of public sector contracts. This comprehensive legislation will establish a unified legal framework covering various sectors such as utilities, defence and concessions.
Central Digital Platform
A pivotal aspect of the Act is the creation of a central digital platform designed to serve as a hub for suppliers. This platform will enable suppliers to register, store their details and conveniently access all relevant opportunities in one centralised location. The overarching objective is to simplify the bidding process, diminish duplication and minimise errors, fostering a more efficient and accessible procurement environment.
Procedures
Procedures will be simplified and reduced to just two, the existing Open Procedure and the new Competitive Flexible Procedure. The new multi-stage approach empowers authorities to craft bespoke procurement processes that align with their needs and objectives. The Competitive Flexible Procedure fosters engagement with suppliers throughout the process, driving a culture of collaboration and innovation. Through tools such as negotiation and dialogue, contracting authorities can harness the expertise of suppliers, resulting in tailored solutions that deliver value for money.
Transparency and Accountability
Transparency and accountability are paramount in the proposed changes, with requirements for buyers to publish procurement plans, market activities, tender notices and contract details on the digital platform. This move is expected to facilitate data analysis, enhance feedback mechanisms and contribute to a more accountable and transparent procurement system. Contracting Authorities with significant annual spend are mandated to publish pipelines of future procurements at the onset of each financial year.
Value for Money and Social Value
The Act advocates for a comprehensive assessment of value for money, encompassing factors such as social impact, environmental sustainability and support for small and medium-sized enterprises (SMEs). By incorporating these considerations into procurement frameworks, contracting authorities can optimise outcomes and align with broader national and local priorities. This commitment to promoting value for money aligns with government policy goals, including achieving net-zero emissions, promoting innovation and advancing regional development. To reflect these changes, Most Economically Advantageous Tender (MEAT) will become Most Advantageous Tender (MAT)
Early Market Engagement
Early market engagement with suppliers is not just recommended – it’s actively encouraged by the Act. By initiating dialogue at the outset, contracting authorities can gain valuable insights into market dynamics, explore innovative solutions and refine procurement strategies. This collaborative approach not only enhances the effectiveness of the procurement process but also fosters a conducive environment for fair competition and value for money.
Smaller Suppliers
To promote inclusivity and competition, the Act places a strong focus on encouraging the participation of SMEs, start-ups and social enterprises. Barriers will be dismantled and requirements simplified, including financial and insurance thresholds. Certain contracts will also be reserved for specific types of suppliers, such as supported employment providers and public service mutuals.
Strengthening Penalties
In addressing breaches of procurement rules, the Act proposes strengthened penalties and introduces new enforcement mechanisms. A novel addition is the establishment of a Procurement Ombudsman to handle complaints and disputes, signalling a commitment to fair and efficient resolution processes. Additionally, the Act aims to expedite payments within public supply chains, ensuring swift compensation for businesses involved. The Act empowers contracting authorities to exclude suppliers, underscoring misconduct not only by the suppliers themselves but also by individuals associated with them.
Conclusion
Championing the development and upskilling of procurement and commercial colleagues is a proactive approach to embracing change. Early engagement with these teams ensures that requirements are accurately captured, paving the way for effective procurement process design.
This legislation heralds a comprehensive reform in public procurement practices, with the potential to foster innovation, enhance accountability and create a more inclusive and competitive environment for suppliers of all sizes. They expect these changes associated with the Procurement Act 2023 to take action in October 2024. Contracting authorities and suppliers will receive at least six months’ notice. The existing rules will continue to apply for contracts that are already in progress. Take a look at the roadmap below for more details.
