Procurement Act 2023: Overview and Supplier Guidance

The Procurement Act 2023 – 2025 Update

The Procurement Act 2023 is scheduled to go live on 24^th February 2025, after initially being planned to go live on 28^th October 2024.

The Goals of the Procurement Act

Over £300billion is spent each year on public sector procurement. Since Brexit and leaving the EU, the government have had the opportunity to review and reform existing procurement legislation. The Procurement Act 2023 (PA23) was developed to consolidate the current rules in to a single piece of legislation, with simpler rules and a more flexible approach.

The PA23 will focus on:

• Value for money
• Public benefit
• Transparency
• Integrity

One of the key goals of the PA23 is there being a duty on Contracting Authorities (the buyers) to consider barriers that prevent small businesses (SMEs) from bidding. Not only to consider them but also to look at how they can help remove the barriers, making contracts and frameworks more accessible.

Key Changes

Whilst bringing together the various existing procurement rules in to one place, there are a number of key and beneficial updates that will be introduced, including:

• The Central Digital Platform
• Assessment Summaries
• Pipeline Notices
• Planned Procurement Notices
• Preliminary Market Engagement Notices
• Mandatory Key Performance Indicators of contracts over £5million
• Longer Framework terms

Something to be aware of it that if a Planned Procurement Notice has been published, then the time period to respond to the Tender can be reduced to 10 days. The other way of considering this is that the Planned Procurement Notice can be issued between 40 days and 12 months ahead of the Tender Notice – so, there is plenty of time for getting organised and to plan the bid.

Tender Pipeline, our free software is being updated based on the requirements.

Impact of a Labour Government

The Labour Government has said that the National Procurement Policy Statement (NPSS), issued by the previous government, didn’t do enough to address the focus on value for money, economic growth and social value. The NPSS is a statutory statement that drives the wider objectives of public procurement. As a result, the decision was made to redraft the NPSS.

The redrafting of the NPSS has been cited as the reason for the delay in the PA23 going live. Whatever the reason, it does give Contracting Authorities more time to plan and prepare for the change in legislation.

Procurement Specific Questionnaire - How it Makes Bidding Easier

One of the key goals of the PA23 is to make bidding less of an administrative burden. Particularly for SMEs, the administrative side of bidding can be enough to stop them wanting to submit a bid. The PA23 is looking to reduce that challenge and by doing so, encouraging small companies to bid for contracts and frameworks.

One way the PA23 is looking to achieve this is with the Procurement Specific Questionnaire.

Standard Supplier Questionnaire (SSQ) that we are familiar with is being replaced with the Procurement Specific Questionnaire (PSQ). The content of what is being asked for is all pretty familiar ground. However, the exciting part of the PSQ is that that it will be shorter than the current SSQ. If it’s shorter, then it’s less work, which can only be helpful.

Something just be aware of, the questions can be added to, adapted or omitted. So, once the PA23 goes live we will see how it will look in practice.

One key area that stands out is about the Associated Persons and Disbarment. It seems there will be slightly more emphasis on the bidder to make sure that none of their subcontractors and possible partners in the bid are on the Disbarment list. This just seems to be a very sensible approach to the process.

Remember, when the Central Digital Platform goes live, the Disbarment list will be accessible on there. So, as part of your own planning, it may be worth just having a look at the Disbarment List, just in case!

The PSQ is not mandatory. Basically, if the contracting authority have another way of ensuring a supplier has the legal and financial capacity or technical ability to deliver, then they may be able to do something different to using the PSQ. If there is a different method, it has to be set out in the relevant notice how the buyer will assess.

What Does this Mean for Suppliers? More Engagement

Quite a number of bidders do, in fact, not like writing bids. Two reasons why companies don’t engage with the bidding process are:

1 – the amount of reading that needs to be done

2 - the amount of writing that needs to be done

The introduction of the PSQ can only be a benefit to potential suppliers. With the PSQ being a reduced size in comparison to the SSQ, there will be less to navigate and less to write. The result, ideally being, that suppliers will be more encouraged to bid! Which is excellent!

Of course, this also means something else. If more suppliers are encouraged to bid for contracts and Frameworks, the level of competition will increase.

More Competition for Contracts and Frameworks

When it comes to bidding, most suppliers will consider basing the outcome of the bid on how it was written. However, where the writing will play a key part, there is a lot more to bidding than just writing.

An area that often gets overlooked is the work that can be done prior to the bid documents being released. In the world of bid management, this is referred to as pre-bid work or capture planning. In simple terms, it is about research. When it comes to bidding, it is crucial to understand the competition. Anything you can find out about who you may be competing against will only be helpful. Knowledge of your competitors, or what some will refer to as “Competitor Analysis”, will impact a few areas of your whole bid process:

• Your bid/no bid decision
• What you offer as part of the solution
• Your win theme(s)

Procurement Routes

With the current legislation, there a number of procedures that buyers can use to procure goods and services. These are:

• Open Procedure - single stage (tender)
• Restricted procedure - 2 stage process (SQ & ITT)
• Competitive dialogue
• Negotiated procedure

The first 2 will be ones that most people bidding in the public sector will be already familiar with. The latter 2 are usually used for very complex bids.

With the PA23, there will only be 2 procedures buyers can use. These are the:

• Open procedure
• Competitive Flexible procedure

The first one remains as it already does under the current procurement rules.

The second one is new and could be a combination of stages, allowing the buyer to shape how best to buy what they need.

Both procedures can be used Contracts and Frameworks.

The Tender Notice

You will know which procedure is being used when the Contracting Authority issues the Tender Notice on the Central Digital Platform. The Tender Notice, which replaces the current Contract Notice, will indicate the procedure being used and how the supplier can access the tender documents. The Tender Notice could also include further information, such as:

• The specification
• Award criteria
• Assessment methodology

With regards to the award criteria, the Contracting Authority needs to make a decision that is the Most Advantageous Tender (MAT). This is another key change, by moving away from the Most Economically Advantageous Tender (MEAT), allowing the Contracting Authority to look at the wider award criteria beyond just the price!

Stages of the Procedure

Below are the various stages the buyer could use:

• Supplier engagement event
• Down-selection of suppliers by reference to conditions of participation
• Enhanced supplier due diligence           
• Contracting authority due diligence       
• Invite initial/outline and/or draft tenders           
• Tests and/or demonstrations         
• Supplier presentations/ interviews        
• The building of prototypes/ proof of concept          
• Supplier funding        
• Dialogue          
• Pre-tender negotiation        
• Staged assessment (or intermediate assessment)        
• eAuctions         
• Post-tender clarification           
• Best and final offers         
• Post-tender negotiation       

The buyer can use any of these stages - they don't have to use them all. Of course, the SQ will be replaced by the PSQ.

For example, if the contract was to provide safety work wear, the buyer could opt to include the requirement for samples to be provided as part of the assessment process. Another example could be around software or technology. Time will tell how this all pans out.

In terms of what procedure will be used, it is up to the Contracting Authority. One thing that they needs to be aware and consider is the administrative pressure on bidders, as well as themselves. At the same time, they also need to consider what would be the best procedure to suit the purpose of the contract/framework. They will also need to consider the nature and complexity of the actual contract/framework. Whichever procedure is used must be set out in the Tender Notice.

So, Why the Change?

The new procedure offers a more flexible approach allowing the contracting authority to meet organisational objectives, local needs and to work with the market, rather than having to be so regimented. The idea should be that they get the right solution with very little risk.

Whatever procedure is used, suppliers must always be mindful of:

• Their legal and financial capacity to deliver
• Technical ability to deliver

Reducing Barriers

Although it sounds complicated, the benefit is that this flexibility could further help to reduce barriers to SMEs to accessing contracts and frameworks. With Contracting Authority having a little more freedom with the procedure, it may mean that the process is much simpler, with less administration for suppliers. Therefore, making it more accessible for suppliers to engage with the formal public sector procurement process.

Impact on Suppliers When Bidding for Contracts

Overall, the Procurement Act 2023 should be making bidding less cumbersome and more accessible. My reducing the amount of administrative work and by offering flexibility with the process, suppliers should be encouraged to be bidding. This is all very positive and exciting news for suppliers. In real terms, the PA23 doesn’t really change anything for suppliers. The need for Contracting Authorities to purchase goods and services in a fully compliant way will remain, so bidding won’t go away. However, with the additional transparency, access to information, the Central Digital Platform and the PSQ, the process will be more accessibly and simpler to navigate.

Being ready for the Procurement Act 2023

As a supplier and until we get closer to the go live date, there is not too much that suppliers can do, other than to be ready for the Central Digital Platform. It is thought it will be accessible (when the PA23 goes live).

If you want to participate in the bidding process, you will need to be registered on the Central Digital Platform so you can store what will be known as your “core supplier information”.

With that in mind, the advice would be to:

• Keep an eye on any official announcement of the Central Digital Platform
• Ensure you have access to your company details, such as VAT and Company House numbers
• Make sure you have the details of any qualifications or trade associations
• Knowledge of anything that could exclude you
• Have access to financial accounts and insurances

Of course, when submitting this information, make sure you double check it for accuracy and also makes sure it is kept up to date.

Thinking about the PSQ, the advice would be to:

• Know your subcontractors
• Make sure you know your Health & Safety arrangements
• Have a suite of case studies ready
• Make sure all your policies are up to date

How Frameworks are Changing to Help Suppliers

Another key update from the PA23 is the amendment to how Frameworks will operate. Currently, a Framework will be open for around 4 years with only one opportunity to bid to be on the Framework. With the PA23, Frameworks will now last for up to 8 years and will open up at least twice during that term. The Framework will open up once in the first 3 years and again in the next 2 years.

All Frameworks will be published on the Central Digital Platform, along with the suppliers on those Frameworks.

What Does this Mean for Suppliers

This is a welcome change to suppliers as it provides further opportunity to apply to be on the Framework. Currently, if a supplier misses the opportunity to bid for a place on a Framework, they will have to wait until the Framework comes to an end and the procurement starts again. With the change, it means that suppliers will get additional opportunities to get on to a Framework.

It could be that the supplier simply missed knowing about the opportunity or that they were to new a company to bid for a place. It could have been that they did bid last time but were unsuccessful for whatever reason. As the Framework will open back up, the supplier will have had chance to improve on what stopped them being successful last time or simply there are in a stronger position to bid. Whatever the reason is, this change under the PA23 is excellent news.

Of course, the Framework can open up more often. However, the Contracting Authority needs to always be mindful of the administrative burden on both the bidder and themselves.

Having visibility of the suppliers on Frameworks will provide bidders the opportunity to assess their competitors for each Framework opportunity. This is a critical step in the bid process as it will impact the Bid/No Bid decision, what is being offered and each supplier’s win themes.

Procurement Act 2023: Overview and Next Steps (update number 7, May 2024)

This article will simply describe what the Procurement Act 2023 is, providing an overview of the key changes from a supplier's or bidder's perspective.

In preparation, for the updated regulations and rules, in how UK public sector buyers need to procure, we have also produced the following supporting guidance:

• Tendering: entitlement to feedback (update number 6)
• How to win tenders with the right pricing strategy (update number 5, focused on the changes from procurement evaluation going from MEAT to MAT)
• The Procurement Act 2023: What are the main benefits for SMEs? (update number 4)
• Open Frameworks in UK Procurement: Key Differences and Opportunities for Bidders (update number 3, focused specifically on framework changes)
• Navigating the Changes: The Impact of the Procurement Act 2023 on Industry Practices (update number 2)
• The Upcoming Procurement Bill 2023 & what it means for you (first Procurement Act 2023 article).

The Procurement Act 2023 will come in to effect on 28^th October 2024. As some context, the new Act consolidates 4 existing sets of legislation - Public Contacts Regulations 2015, Utilities Contracts 2016, Concession Contracts Regulations 2016, Defence & Security Public Contracts Regulations 2011.

From Public Contract Regulations to Procurement Act 2023 - Key Changes

The new Act solidifies some existing practices as well as incorporating new concepts, all of which are both exciting and beneficial to you as a supplier. We’ve listed some of the key elements below:

Value for money. Each procurement exercise needs to deliver to both the buying organisation and the community it serves. When we talk about value for money, this is far from meaning “cheapest bid wins”. With the move away from the Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT), buyers will be looking at more than just the price!

Maximise public benefit. This means economic, environmental and social value. In reality, this isn’t new but amplifies the focus and importance of sustainability and social value in public sector procurement. The Social Value Act 2012 – something which we’ve written about before - meant that social value had to become, initially, considered in public sector procurement. Then it became an evaluated part of public sector procurement. It makes sense for it to be formally incorporated in to the Procurement Act

Increased transparency. There will be more transparency from buyers needing to, under the Procurement Act, to share more information with suppliers about future opportunities and performance. We’ll look at this in a bit more detail shortly

Acting with integrity. Putting more accountability on buyers, there is a focus on preventing fraud and corruption, as well as improved control of their own procurement processes. If you are concerned with how buyers are operating, you will be able to notify the Procurement Review Unit (which replaces the Public Procurement Service)

Fairness and equal treatment. The Procurement Act states that no supplier to be at an unfair advantage or disadvantage and that suppliers to be treated the same.

More SME involvement. Bidding has always been a pain for small businesses due to the work needed to produce a strong bid. The Procurement Act states that there needs to be a focus on increasing SME participation. So, through the Central Digital Platform (more on this shortly), as well as buyers needing to be mindful of barriers to SMEs, we should see much more engagement. For example, the buyers need to consider deadlines and the complexity of the procurement, purely to allow the flexibility of allowing SMEs to participate.

Only two procedures. Under the Procurement Act, there will be only 2 possible procedures buyers can use, as follows:

1. The open procedure. This is a single stage procedure and will remain largely as it does under the Public Contracts Regulations 2015
2. The Competitive Flexible Procedure is new. This gives options to the buyer to create a multi-stage procedure. For example, the 2-stage procedure - SQ & ITT. Or it could the restricted procedure plus extras. For example, product demonstration. It could be good for suppliers to showcase solutions. It provides greater opportunity for dialogue and negotiation.

Transparency Under the Procurement Act

Earlier we mentioned that there would be uncreased transparency under the Procurement Act. So what does this look like and how does it help you, as a supplier? So, in practice, there will be a few different ways this will happen, which we have listed below:

Pipeline notice. If a buyer will be spending over £100million each financial year, they must publish a Pipeline Notice. So, that means they will, in essence, be telling you (and everyone else) what services and products they will be seeking through the formal procurement process. The Pipeline Notice will contain opportunities over £2million that will be going out to tender in the next 12 months By having that foresight, you will know when to expect bids to be issued, giving yourself time to plan.

Preliminary Market Engagement Notices. These are issued before the publication of a tender notice, providing both the buyer and you, the supplier, to prepare for the procurement. The purpose is to allow buyers to speak with you (and other suppliers) to help them understand more which will help shape their requirements. If you get the opportunity to be involved, not only will you know about a future procurement, you will also potentially be able to shape that specification.

Planned Procurement Notices (PPNs). These are similar to the Pipeline Notices and provides you with advanced notice of an upcoming bid and are similar to Prior Information Notices (PINs) under the Public Contracts Regulations 2015. The idea being that they buyer gives as much information as possible, giving you more time to decided if you want to go for that bid and to also prepare for the bid. A PPN can be issued between 40 days and 1 year before the bid is formally advertised.

Spend data. The Procurement Act states that buyers have to publish information about any payment of £30,000 or more on a contract. This is great for you as a supplier as you will see who the incumbent is and you will also get an understanding of how much the value of the contract is really worth, based on how much is being spent. That will help your bid/no bid decision, as well as what you offer the buyer.

Frameworks Under the New Procurement Act

Under the Act, there will be some changes, again, for the better. Just as a note to remember, If a Contract Notice is issued on 25^th October, the Pubic Contracts Regulations 2015 will apply throughout the whole process - even if there are a number of extensions to the Framework (and contract). So the rules to be followed are based on the Contract Notice, not the Contract Award Notice.

A Framework under the Procurement Act can last up to 8 years. However, the Framework must open up again at least once in the first 3 years and then within 5 years after first 3 years. The buyers need to consider what they are buying, their requirements and the pace of the market - meaning that the Framework may open up annually! Being mindful of removing barriers to participation, they have to balance up the amount of administration involved. In the contract notice for Frameworks, the buyer will need to state if there will be a maximum number of suppliers or if it is unlimited. The buyer should also be indicating if, a supplier has to apply each time the Framework opens up. So, thinking about the point above, if you get on the Framework at the beginning, you may need to reapply when it opens up again in the first 3 years.

Are the Use of Frameworks Going to Increase Even further?

As a result of any changes in procurement, public sector buyers have increased risks with regards to compliance. One way to manage this risk, learn and understand the new requirements, is to use a framework!

If your business does not use frameworks as a route to win public sector contracts, this is a decision, certainly in the short-term, may be one to reconsider.

For tendering support, bid writing services or training courses do not hesitate to contact us.

Dynamic Markets Under the Procurement Act

Dynamic Markets will replace the current Dynamic Purchasing Systems and suppliers will be allowed to join at anytime. Buyers will have to publish a Dynamic Market Notice, giving as much information as possible to help a supplier decide if they want to choose to be on it. Again, there is the focus on helping suppliers. Supporting this, buyers must make it clear if the Dynamic Market is open ended or when the end date is.

Tender Feedback

The Public Contracts regulations 2015 required buyer to provide feedback on bids, in terms of the relative advantages of the successful bidder over the unsuccessful bidder. With the Procurement Act 2023, bidders will continue to be entitled to feedback, explaining why, for example, a bidder scored 6 out of 10 for a question. Now, this is where it gets interesting, the buyer is then expected to also provide guidance on how the bidder could have scored 7 out of 10! So, helping the bidder improve next time! This should improve how buyers are scoring/evaluating bids (that's just our opinion) and for continuous improvement for the bidder, it means they should only improve.

The Central Digital Platform

The Central Digital Platform will contain all the procurement notices. It will allow everyone to search, view and understand what buyers are buying, who they are buying from and how much they are spending. It will provide more visibility and access to opportunities - which will help you plan, identify pre-market engagement opportunities, Pipeline Notices, PPNs and Tender Notices. As a supplier, you will need to register and store your details so that they can be used for multiple bids – ideally simplifying the process and making your life easier.

What is the name and where do I find the new Central Digital Procurement Platform?

These will sit within the existing Find a Tender service (FTS). This system is being updated to include the new requirements, which of course makes quite a bit of sense for all involved.

Our free public sector tender alert system, Tender Pipeline, will continue to collate this data, as well as from 9 other sources of procurement data. Preparing it in a way which is useful for public sector focused bid and sales teams.

Contract Management

One final point for you to be aware of, on individual contracts of over £5million, at least 3 Key Performance Indicators (KPIs) must be agreed between you and the buyer. As mentioned earlier, there is a drive on accountability of the buyer and part of this is through improved contract management. As an additional note, the buyer must publish performance data at least once a year throughout the contract. So, make sure you can deliver and to the standards the buyer expects!

Summary of Procurement Act Changes to Key Terminology

To avoid you getting caught out with the new definitions and terms here's a list of the key changes:

• Procurement Review Unit (PRU): A new body overseeing procurement practices, replacing the Public Procurement Review Service (PPRS). It includes:
  • Procurement Compliance Service (PCS): Ensures compliance with procurement rules.
  • Debarment Review Service (DRS): Manages the exclusion of risky suppliers.
• Central Digital Platform: An enhanced version of the Find a Tender service, where suppliers can:
  • Store and manage business details.
  • Access procurement opportunities.
  • Set up tender alerts.
• Tender Notice: The new term replacing "Contract Notice" for announcing procurement opportunities.
• Competitive Flexible Procedure: A new, adaptable process for procurement that allows easier bidding and negotiation.
• New National Procurement Policy Statement: A policy outlining government priorities for public procurement, focusing on value for money, economic growth, and social value.
• Open Frameworks: Flexible agreements that allow new suppliers to join at any time, ensuring ongoing competition and innovation.
• Dynamic Markets: An approach where suppliers can continually qualify to provide goods and services, promoting flexibility and competition.

Or Prefer to Read it Direct from the UK Government?

See Procurement Act 2023 Guidance Documents.