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 28th 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:
- The open procedure. This is a single stage procedure and will remain largely as it does under the Public Contracts Regulations 2015
- 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.
Are you a public sector supplier and need support?
Contact usTransparency 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 25th 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.
Prefer to discuss?
Contact us todayDynamic 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!
