Overview & implications
The Procurement Act 2023 marks a significant shift in UK public procurement practices. This groundbreaking legislation, set to take effect on 24 February 2025, aims to modernise and streamline how the public sector purchases goods and services. It represents a departure from previous EU-derived regulations, ushering in a new era for procurement in England, Wales and Northern Ireland.
The Act will replace several existing regulations, including those governing public contracts, utilities contracts, concession contracts, and defence and security public contracts. This comprehensive overhaul seeks to establish a more efficient and transparent procurement regime. As the implementation date approaches, the government is providing guidance and training to help organisations prepare for these substantial changes.
For charities and third sector organisations who are classed as a contracting authority (the majority of their funding is from the public purse), it is critical that they understand these rules.
Will the Procurement Act affect you?
If you're a contracting authority that purchases services from external suppliers, the Procurement Act will indeed apply to you. Even if you don't fall under this category, you might still be subject to the Act if you receive significant public funding or carry out public functions.
For providers of goods or services to public sector organisations, you'll find yourselves directly impacted by the new legislation. This includes charities, small businesses, social enterprises, and public service mutuals that work with government bodies.
It's crucial to understand your position in relation to the Act to ensure compliance and take advantage of any new opportunities it may present.
Major Changes to Public Procurement
The Procurement Act 2023 introduces significant alterations to the public procurement landscape. You'll notice a shift towards increased flexibility in tendering procedures. Contracting authorities can now choose from direct awards, competitive tendering, or existing framework agreements. The new competitive flexible procedure allows for tailored processes, provided they meet the Act's objectives and time limits.
The scope for assessing tenders has broadened. 'Most advantageous tender' replaces 'most economically advantageous tender', enabling a wider range of factors to be considered. This change benefits charities by allowing better alignment with their objectives.
Transparency is a key focus of the new Act. You'll see more notices published throughout the procurement lifecycle, from pre-market engagement to contract termination. A central digital platform will host additional information, promoting accountability.
The standstill period has been reduced from 10 to 8 days, potentially speeding up the process.
Procurement principles have been subtly adjusted. While non-discrimination and proportionality are still present within specific obligations, they're no longer explicit overarching principles. Equal treatment remains, albeit with modified wording.
You'll need to familiarise yourself with new terminology in the Act. This change may impact the application of previous case law.
Contracting authorities must now consider procurement objectives and barriers for SME participation in above-threshold procurements. They're required to explore ways to reduce or remove these obstacles.
The National Procurement Policy Statement will set strategic priorities for public procurement. Contracting authorities must take this into account.
Exclusion grounds have been expanded. Poor contract performance or relationships with associated suppliers and subcontractors may lead to exclusion. A new debarment system has been introduced. Contracting authorities must notify ministers when excluding a supplier, who may then investigate and potentially add the supplier to a central debarment list.
Here's a quick summary of key changes:
- Fewer, less prescriptive procedures
- 'Most advantageous tender' replaces 'most economically advantageous tender'
- More notices throughout procurement lifecycle
- Standstill Period - Reduced from 10 to 8 days
- Wider grounds and new debarment system for Exclusions
These changes aim to modernise and streamline the procurement process, but they also require you to adapt your approach when bidding for public contracts.
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Contact us todayHow can charities get ready for the upcoming procurement changes?
To prepare for the Procurement Act coming into effect on 25 February 2025, you should take several steps:
• Review and update your bidding processes and procurement procedures
• Train your team on the new regulations
• Highlight your charitable purposes in tenders
• Focus on non-financial value you can offer
• Develop strong key performance indicators
• Establish clear conflict of interest policies
• Improve your contract management systems
Consider how you can use your unique strengths as a charity when bidding. The new Act allows for more flexibility, so think creatively about how to showcase your organisation's impact. You may want to seek legal advice to ensure you fully understand the changes and can adapt your approach accordingly.
What to Do Next
Take proactive steps to prepare for the upcoming changes in procurement law. Review your current bidding processes and identify areas that may need adjustment. Consider seeking legal advice to ensure full compliance with the new regulations. Familiarise yourself with the central digital platform that will be used for future tenders. Stay informed about updates from the procurement review unit. Be ready to adapt your strategies to align with the new procurement oversight measures.
Charities, the Procurement Act & Framework Agreements
The Procurement Act 2023 introduces important changes to how charities in the UK can procure goods and services through framework agreements while ensuring compliance with the new legislation.
Under the Act, charities can access open or closed frameworks. Open frameworks offer flexibility by allowing new suppliers to join at predefined points, ensuring a diverse and competitive supplier base. Closed frameworks, limited to 4 years, provide stability but may not be suitable for evolving requirements.
Charities can make direct awards under frameworks if the terms are sufficiently precise, reducing administrative burdens. Where direct awards are not possible, mini-competitions among framework suppliers must be conducted, following a process similar to open procedures.
The Act's introduction of dynamic markets, replacing Dynamic Purchasing Systems (DPS), presents new opportunities for charities. Dynamic markets are open to new suppliers throughout their term, promoting innovation and access to a constantly evolving supplier base. Charities can participate in multiple categories or lots, tailoring their procurement to specific needs.
To ensure compliance, charities must publish notices for dynamic markets on the Find a Tender service and observe standstill periods for admissions and contract awards. Existing framework and DPS agreements will continue under the old rules until expiration, and charities should be mindful of transitional arrangements.
Charities should closely examine the rules and timelines for each framework or dynamic market opportunity, as variations may exist despite the Act's aim to simplify and standardise processes. By understanding the implications of the Procurement Act 2023, charities can effectively navigate frameworks and dynamic markets to achieve compliant, value-driven procurement that supports their missions.
Frequently Asked Questions
How will the Procurement Act 2023 affect compliance for charities?
The Procurement Act 2023 introduces new compliance requirements for charities. You'll need to familiarise yourself with revised terminology and procurement objectives. Charities must now consider small and medium-sized enterprise (SME) participation in above-threshold procurements. It's crucial to review your internal processes to ensure alignment with the Act's provisions.
What new obligations should charities be aware of under the Act?
Under the new Act, you'll have additional responsibilities. These include:
- Engaging with contracting authorities during pre-procurement market stages
- Considering social value in your tender submissions
- Adhering to updated transparency requirements
- Adapting to new procurement procedures and timelines
Staying informed about these changes will be key to your organisation's success in public sector tendering.
How does the Act change the tender process for charities?
The Act aims to streamline the tender process. You can expect:
- More flexible procurement procedures
- Increased emphasis on social value and sustainability
- Greater opportunities for early engagement with buyers
- Simplified processes for lower-value contracts
These changes may require you to adjust your tendering strategies and documentation.
Are there exemptions for charities in the Procurement Act 2023?
While the Act doesn't provide blanket exemptions for charities, it does offer some flexibility:
- Light-touch regime for certain social and other specific services
- Simplified processes for contracts below specified thresholds
- Potential for reserved contracts in specific circumstances
You should review the Act's provisions carefully to identify any applicable exemptions for your charity's activities.
How does the Act impact partnerships and funding for charities?
The Act may influence your partnership and funding opportunities by:
- Encouraging collaboration between public bodies and charities
- Promoting consideration of social value in procurement decisions
- Potentially increasing access to public sector contracts for smaller charities
You may find new avenues for engagement with public sector partners under the revised framework.
What are the consequences of non-compliance with the Act?
Failing to comply with the Procurement Act 2023 could result in serious consequences:
- Disqualification from tender processes
- Legal challenges to contract awards
- Reputational damage affecting future opportunities
- Potential financial penalties in severe cases
It's essential to invest in training and resources to ensure your charity remains compliant with the new regulations.
