The Procurement Act 2023 (formerly known as the Procurement Bill) has been a topic of discussion among SMEs (Small and Medium Enterprises) as it promises to bring significant benefits and opportunities for growth. In this article, we will explore the key advantages of the Procurement Act 2023 for SMEs like yours and how you can maximise these benefits to drive success.
Understanding the significance of the Procurement Act 2023 for SMEs
The Procurement Act 2023 marks a significant shift in the way SMEs can engage in government tenders and win contracts. It aims to level the playing field and provide equal opportunities for businesses of all sizes to compete for government projects. This Act replaces the previous Procurement Act and introduces several changes that directly impact SMEs like you. By understanding these changes, you can position your business strategically to take advantage of the new opportunities that lie ahead.
When will the Procurement Act 2023 go live?
The Procurement Act 2023 is set to go live in October 2024, with a 6-month notice posted before its release. The existing rules will continue to apply for contracts that are already in progress, so the changes won’t happen overnight.
What has changed from the previous Procurement Act?
While the Procurement Act doesn’t bind suppliers directly, it will improve how you do business with the public and utility sectors, so make sure you understand what it means for your organisation.
Compared to the previous Procurement Act, the Procurement Act 2023 has increased emphasis on fair competition in procurement processes. The updated Act mandates that all government procurement procedures be conducted in an open and transparent manner, reducing the risk of corruption and favouritism. This creates a level playing field for SMEs to showcase their capabilities and win contracts based on merit.
Another notable change is the introduction of a stronger exclusions framework. The Procurement Act 2023 provides clearer guidelines for excluding suppliers from tender opportunities. This framework ensures that only eligible and qualified businesses can participate, enhancing the overall fairness and transparency of the procurement process. By streamlining the exclusions process, SMEs can have more confidence in their bidding efforts, knowing that they are competing on a level playing field.
Key benefits of the Procurement Act 2023 for SMEs
Simplified bid writing process
Tender writing can be a complex and time-consuming task, requiring a good understanding of the tender requirements and the ability to articulate a standout proposal. The Procurement Act 2023 recognises these challenges and aims to simplify the bid writing process for SMEs. The Act provides clearer guidelines and standardised templates, making it easier for SMEs to navigate through the bidding process. For many SMEs bid writing and responding to tenders can be a challenging area. This is why we developed our Bid Writing service, which helps SMEs with processional tender management and support.
Additionally, this Act will create a central digital platform for suppliers to register and store their details so that they can be used for multiple bids, and see all opportunities in one place.
Increased transparency and fair competition in procurement processes
One of the most significant benefits of the Procurement Act 2023 for SMEs is the increased transparency and fair competition in procurement processes. This ensures that all bidders, regardless of their size or financial resources, have an equal opportunity to participate and win government contracts. By removing the barriers that previously hindered organisations like yours, the Act allows for a more competitive and efficient procurement system.
Access to government contracts and business opportunities
Another key benefit of the Procurement Act 2023 is the enhanced access to government contracts and business opportunities for SMEs. The Act requires government agencies to set aside 33% of spend specifically for SMEs which provides a fair chance to secure contracts that were previously dominated by larger corporations. By tapping into these opportunities, you have the opportunity to expand your customer base, boost revenue, and foster sustainable growth.
Commercial frameworks will also be more flexible, so prospective suppliers are not shut out for long periods of time.
Strengthening the local economy through SME participation
The Procurement Act 2023 plays a crucial role in strengthening the local economy by promoting SME participation. By encouraging government agencies to source goods and services from SMEs, the Act stimulates economic growth at the grassroots level. Often deeply connected to their local communities, the updated Act recognises that their success translates into job creation, increased tax revenue, and overall prosperity.
Enhanced credibility and trust
Under the Procurement Act 2023, SMEs can gain enhanced credibility and trust within the business community. By successfully participating in government procurement processes, SMEs can demonstrate their ability to meet stringent requirements and deliver quality products and services. This, in turn, boosts their reputation and makes them more attractive to potential customers through increased visibility.
Increased emphasis on prompt payment
The Procurement Act 2023 introduces a number of key changes that benefit SMEs. One of the key changes is the increased emphasis on prompt payment. Under the new act, government entities are required to make payments within 30 days, ensuring that SMEs receive their dues in a timely manner. This change tackles the issue of delayed payments, which often poses a financial burden on smaller businesses.
Increasing transparency and fairness, this Act also introduces a stronger exclusions framework that will take tougher action on underperforming suppliers.
Key strategies for SMEs to leverage the Procurement Act 2023
To leverage the benefits of the Procurement Act 2023 and drive success, you should:
Stay informed: You should stay up-to-date with the latest developments, regulations, and opportunities in government procurement. This can be achieved through active participation in industry associations, attending workshops and seminars, and networking with government officials and other SMEs
Build relationships: Cultivating relationships with key stakeholders, such as government agencies, prime contractors, and other SMEs, can open doors to valuable business opportunities. You should actively engage in networking events, conferences, and business forums to establish connections and foster collaborations
Public sector marketing: Often overlooked, a strong public sector sales and marketing strategy is imperative for serious bidders. The public sector, like private buyers, conducts research on potential suppliers during the market engagement period (and in some cases even earlier) to identify and understand the best suppliers for the job. Building relationships and a strong brand identity through your website design, marketing content and targeted marketing emails can ensure that your business is presented in the best possible light. Remain a step ahead of your competition with our recommendations
Focus on specialisation: You should identify your core strengths and specialise in a specific niche. By positioning yourself as an expert in a particular field, you can differentiate yourself from competitors and attract government contracts that require specialised knowledge or skills
Invest in tender writing services: Hiring professional Bid Writers can significantly improve the quality of bids and increase your chances of winning contracts through understanding public sector needs. As evidenced by our 77% win rate, Thornton & Lowe can boost your bid success rate and relieve this often stressful process, allowing you to focus on your day-to-day tasks
How Thornton & Lowe can help SMEs to make the most of the Procurement Act 2023
As a leading consultancy that specialises in assisting SMEs to navigate the complex world of government tenders and contracts, our expertise in tender bid writing, contract writing, and government frameworks affords us the knowledge to help you to maximise the benefits of the Procurement Act 2023.
Our dedicated team of experienced Bid Writers craft compelling proposals that highlight the unique value proposition of SMEs like yours, increasing organisations chances of winning contracts. Additionally, we can provide guidance on participating in government frameworks, ensuring SMEs gain access to a wider range of tender opportunities.
To learn more about how Thornton & Lowe can support your SME in leveraging the Procurement Act 2023, contact our team today!
