What is the Procurement Act 2023?

What is the Procurement Act?

In essence, the Procurement Act 2023 aims to make every pound go further for public services.

Its objective is to transform public sector procurement, driving innovation, delivering better outcomes and embedding transparency throughout the commercial lifecycle. Crucially, it will let everyone access procurement data and understand how money has been spent.

It’s important to highlight the Procurement Act only impacts contracting authorities in England, Wales and Northern Ireland. For Scotland, it states: ‘The legislation does not make provision for all public procurement in Scotland, but does apply to contracting authorities in Scotland which are either cross-border bodies or exercise wholly reserved functions.’

Procurement objectives

Rather than follow European Directives, the Procurement Act sets out a series of new objectives. These state that public procurement should now place emphasis on delivering value for money, maximising public benefit and acting with integrity. Sharing information is also a top priority.

The Procurement Act also makes clear that contracting authorities and public sector buyers must support the National Procurement Policy Statement’s priorities. This encompasses commercial and procurement delivery, skills and capability for procurement, and social value.

The Procurement Act was originally planned to launch in September 2024, but has been delayed until February 2025 because the National Procurement Policy Statement is being re-drafted to reflect the new government’s priorities. So, some details may change by the time the Procurement Act officially launches.

Social value is especially important, given the spotlight social value has been under in recent years following the introduction of the Social Value Act. This legislation demands that public sector buyers take into account the social, economic and environmental impact when using a supplier’s services.

Public bodies must consider how contracts will:

• Create resilient businesses, employment opportunities and skills development
• Improve innovation, supply chain resilience and security of supply
• Tackle climate change and reduce waste

Here, Alice discusses what these changes to procurement objectives mean.

Notices

As part of the public procurement process, a number of new notice types will be published. These include preliminary market engagement notices, planned procurement notices and transparency notices.

Some of the new notices are mandatory and some are optional, but buyers will need to clearly understand when any of these new notices should be published.

Kieran makes clear everything you need to know about the new notices under the Procurement Act.

Award mechanisms

When awarding new work to suppliers, contracting authorities have access to a number of new mechanisms under the Procurement Act. These include:

Dynamic Market – Replacing Dynamic Purchasing Systems, a Dynamic Market is a list of qualified suppliers who are eligible to participate in future procurements. Throughout its lifetime, this must be open to new construction suppliers.

Framework – A contract between the contracting authority and one or more suppliers, a Framework sets out the provisions under which future contracts for the supply of goods, services and works are to be awarded.

Open Framework – Unlike more traditional Frameworks, with an Open Framework contracting authorities can appoint new suppliers throughout its lifetime. And with its lifetime increasing to 8 years, Open Frameworks aim to provide more flexibility and a greater chance for a more competitive market.

Fatima details what you can expect from these new award mechanisms.

To determine supplier performance for contracts with an estimated value above £5 million, contract KPIs have been introduced. These let public bodies assess how their suppliers are faring on projects at least once a year – and the findings have to be made public.

These contract KPIs intend to promote greater transparency, and give honest insights into the effectiveness of public procurement contracts.

Claire and Paul discuss all the key information you need to be aware of for contract KPIs.

The new Procurement Act signals a move away from decisions being made based on cost. Previously, public sector buyers were required to award public sector contracts to the ‘Most Economically Advantageous Tender’. The focus on economics has now shifted. Instead, contracts should be guided by which bid offers simply the ‘Most Advantageous Tender’.

Greater weight can be placed on criteria like social value, to encourage more contract decisions being made on what will benefit the wider community and help better meet the country’s holistic needs.

Here, Heidi explains how suppliers should now bid for a contract in light of these changes.

The UK Procurement Act now gives public sector buyers legal certainty they can make modifications throughout a contract’s lifetime. There are 10 grounds on which modifications can arise, in order to make sure the contract is successfully fulfilled, four of which are new. These are urgency and the protection of life, materialisation of a known risk, and then there are two new grounds specific to defence authority contracts Standstill periods – which provide an opportunity for suppliers to raise any reservations or formally challenge the contract award decision – have also been shortened, from 10 to 8 working days. There are some exceptional circumstances where this may not apply, such as unavoidable urgency for direct awards, but this measure intends to speed up the procurement process while honouring fairness and transparency.

Claire and Lawrence give further insight into contract modifications.

For disappointed suppliers, the time limit to bring a challenge remains unchanged, at 30 days from the date of knowledge of the breach.

Set aside conditions have been introduced to expand upon declarations of ineffectiveness. These now cover circumstances such as failing to publish a required contract award notice, entering into or modifying a contract before the end of a standstill period, and more.

Meanwhile, the remedies available in the event of a challenge stay largely unchanged.Jon provides a 101 on understanding the challenge process.

Under the new Procurement Act, public sector buyers have the ability to exclude certain suppliers from tenders if they believe they pose a risk to public procurement. Contracting authorities have to consider a supplier’s recent past behaviour and circumstances to decide whether it should be permitted to compete for or be awarded a public contract.

The new Procurement Act then introduces a new centralised supplier Debarment List, based on either mandatory or discretionary grounds. This prevents included suppliers from bidding for public contracts, with the option to be removed from this Debarment List if there’s a significant change in circumstances.

Here, Alisha answers common questions on the grounds on which suppliers can be excluded, what happens if a supplier is excluded during a live contract, and the next steps to take if a supplier disagrees with being added to the Debarment List.