Home / Insights / Blog / What is Public Sector Procurement in Construction? Definition and key insights What is Public Sector Procurement in Construction? Definition and key insights Public sector procurement in the UK construction industry offers one of the biggest potentials for Construction subcontractors to acquire contracts and tenders, with nearly £407 billion being spent on public sector procurement from 2023/24. There will be even further opportunities arising in the future, with this spending figure expected to rise by 10% between 2024 and 2025. Despite the huge opportunities that public sector construction projects have to offer, subcontractors can often find it challenging to navigate the public sector procurement process, particularly when engaging with multiple contracting authorities and varying construction compliance requirements and Procurement legislation. In this article we will walk you through some key insights that you need to know as a Construction Subcontractor working to win tenders and contracts through the public sector procurement process. We’ll cover what the tender process is, as well as some crucial procurement legislation, such as the Procurement Act, to ensure that you can get ahead of the changes and win more public sector contracts. Public Sector Procurement Definition and Key Components Public sector procurement in construction can be defined as the tender process that government bodies and contracting authorities use to request and purchase construction works, services, and materials from Construction subcontractors to work on public sector construction projects such as housing, schools, hospitals or education buildings. The regulated framework of laws and policies used in the public sector procurement process provides greater transparency, fairness, and accountability when contracting authorities are publishing tenders and allocating public funds. Key Components of Public Sector Procurement There are several significant components which make up the foundations of the public sector procurement process: • Regulatory Framework: Public sector procurement follows strict regulations like the Public Contracts Regulations (PCR) and the Procurement Act in order to ensure contracting authorities follow the legal requirements to publish tenders • Transparency Requirements: Public officials and contracting authorities submitting public sector construction tenders must document and publish all tender documents and contracts with a value of over £12,000 on the Government’s Contracts Finder. Constructionline’s platform Marketplace indexes opportunities from Contracts Finder and Find-a-Tender (as well as OJEU (TED) and a range of public sector planning portals) and provides you with highly specific search filters so you can find jobs in the locations and work areas that you’re interested in within minutes. • Social Value Considerations: The Social Value Act 2012 mandates public bodies to evaluate economic, social, and environmental well-being of the area that the contract is applied to, and consider how to improve the wellbeing of these social value factors • Performance Monitoring: The Procurement Act mandates that before entering into a public sector contract with a value of more that £5 million, the contracting authority needs at least three KPIs which will track subcontractors’ and suppliers’ performance Importance of Public Sector Procurement in the Construction Industry Public sector procurement plays a crucial role in the construction industry by providing tender and work contract opportunities for both main contractors and subcontractors across a wide variety of public sector construction projects. Procurement frameworks help encourage further construction projects by supporting smart spending and building lasting relationships between public sector contracting authorities and construction subcontractors and suppliers. Benefit Impact Local Economic Growth Makes shared participation possible for local construction suppliers and SMEs Innovation Drive Promotes new solutions through competitive bidding Cost Efficiency Will give a better value through organised buying Quality Assurance Delivers high standards through compliance The success of public sector procurement in construction is dependent on the frameworks and procurement legislation put in place by the government to ensure contracting authorities can find the right supplier and best tender for each project. These regulations help get materials and services at the best price, and improve contracting authorities’ access to more suppliers, including local businesses. This approach leads to more ethical construction procurement practices. Government agencies now prefer suppliers who show environmental responsibility and support local communities. This choice benefits both current projects and helps develop the industry’s future. Public sector procurement has become a powerful tool that shapes construction’s social and environmental impact. Find out how Constructionline’s Public Sector Procurement Solutions can help you align with the key components of the public sector procurement process and ultimately win more public sector procurement contracts. Find out more → The Public Sector Procurement Process It’s important that as Construction subcontractors you are able to understand the public sector procurement process in order to secure public sector opportunities. At Constructionline, we aim to help you understand this process in order to help you meet contracting authorities’ procurement compliance requirements and further procurement legislation in order to win more contracts and work opportunities. Stage One: Identifying needs and planning A clear definition of project requirements launches the procurement process. Public sector contracting authorities define their specific requirements and create detailed specifications for each contract. The introduction of pre-qualification questionnaires such as PAS 91 in 2010, and the Common Assessment Standard transformed the construction procurement process for identifying needs. In March 2024, the Government issued the Procurement Policy Notice (PPN) 03/24, which recommended using the Common Assessment Standard pre-qualification questionnaire procurement compliance standard instead of PAS 91 for public sector construction projects exceeding £5.337 million. The Common Assessment Standard questions (V.4) are segmented into 10 sections and cover the following areas: Company identity & contact detail information Financial details Corporate and Professional standing Health & Safety Environmental Quality Building Safety Fairness, Inclusion and respect Information Security Information Management Find out more about the Common Assessment Standard V.4 question set here. Sign up for Constructionline Gold Membership to align with the Common Assessment Standard requirements → Stage Two: Tendering and bidding The tender notice gets published to Contracts Finder after the contracting authorities have established the requirements needed for the contract. These are then indexed on the Constructionline platform Marketplace where you can filter and find public sector projects near you which meet your expertise in minutes. Construction subcontractors are then able to submit bids to work on the contract. Competiton for these public sector contracts is high so it’s important that your tender bids demonstrate your compliance, showcase your capabilities, and highlight the social value you can provide along with outlining your proposed solutions for working on the project. Stage Three: Evaluation and selection Public sector contracting authorities then review subcontractors’ submissions based on key criteria such as: A supplier’s technical and professional abilities Economic and financial standing Whether any exclusion grounds apply Winning public sector tender bids come from Construction Subcontractors who have streamlined the way they source their public sector contracts, address every aspect of the specification, and emphasises the social value which can be provided and also apply learnings from lost bids. Stage Four: Contract award and management The successful subcontractor or supplier will receive the public sector contract after evaluation. Public sector organisations must notify all suppliers about their decision, and they should also provide feedback that explains why they selected the winning bid. This information is often published on Contracts Finder. It’s important that you take these learnings from each bid (whether you were either successful or unsuccessful) and apply them to your next bid to further your chances of winning the next contract. For more information on how to win more public sector contracts read our post on the topic. Key Public Sector Procurement Regulations and Policies New Public Sector Procurement legislation has altered how public sector contracts are awarded and the values that contracting authorities are looking for in tender bids. These Public sector regulations and policies will affect how you participate in public sector construction projects. Social Value Act 2012 Public sector buyers were able to review construction projects differently thanks to the introduction of the Social Value Act 2012. This Act encouraged public sector contracting authorities to think about how they can secure wider social, economic and environmental benefits. This was designed to ensure that public sector contracting authorities were able to get better value for money out of procurement. Public Contracts Regulations 2015 The Public Contracts Regulations (PCR) 2015, implemented in February 2015, serves as the foundation of modern public sector procurement process. These regulations standardised public sector procurement procedures in the UK and set financial thresholds. The Procurement Act 2023 The Procurement Act 2023, will reshape the public procurement sector even further. This legislation brings exciting opportunities to both construction main contractors and subcontractors through: Key Changes Benefits Simplified Processes Faster procurement cycles Enhanced Flexibility Better suited to specific project needs SME Support Improved access for smaller contractors Performance Tracking Clear KPI measurements Enhanced transparency and accountability over the public procurement sector process will improve as the Act mandates contracting authorities to publish at least three KPIs for public contracts valued over £5 million. The Procurement Act 2023 takes both the Social Value Act and the Public Contracts Regulation further by introducing the “Most Advantageous Tender” (MAT) approach instead of just picking the lowest price. Public authorities now need to consider other factors like quicker completion times and lower carbon emissions. These regulations help to create a fair playing field for construction subcontractors and SMEs. Construction subcontractors aiming to work on public sector projects should show clear social value contributions and maintain strong performance tracking systems. This strategy will help win public sector contracts and build lasting relationships with public sector contracting authorities. For more information on how to make the most out of the Procurement Act, check out our Procurement Act Hub → Key Public Sector Procurement Regulations and Policies Understanding public sector requirements Public sector procurement success depends on knowing what requirements contracting authorities are looking for. Examples of contracting authorities’ requirements might include: On-time delivery ensuring you are able to complete work according to the project schedule Meeting health and safety regulations on-site Ensuring the quality of workmanship. Public sector main contractors are also looking for subcontractors who can demonstrate that they can provide both social value and further added value to each of their projects. When you are applying for public sector contracts, it’s important that you only commit to realistic goals that align the value of the contract with the values you can bring. Building Relationships with Public Sector Buyers It’s equally important to build strong relationships between you and the public sector buyers publishing the contracts. Here are some effective practices that can create lasting business connections: • Proven Track Record: Start small contracts and build references and reputation • Regular Involvement: Join supplier events (such as Constructionline’s Marketplace Live events) and procurement workshops • Transparent Communication: Keep an open dialog about capabilities and challenges • Value added solutions: Show innovation and process improvements Public sector contracting authorities often cooperate between organisations which creates opportunities for referrals and expanded business connections. These natural relationships help build your network effectively. Construction networking events like Marketplace Live bring together leading main contractors and public sector authorities to meet with Construction Subcontractors from across the UK. Meeting public sector authorities face-to-face is a great way of establishing and building business relationships and encouraging further collaboration moving forwards. Register to attend a Marketplace Live event and meet public sector buyers near you: Register to attend Marketplace Live today → Demonstrating Social Value Proving value now goes further than just being able to provide the lowest cost. Demonstrating your social value with Constructionline will helps you showcase your capabilities to potential public sector main contractors in several key areas: Environmental Impact: Clear strategies to reduce carbon footprint Economic Benefits: Measurable cost savings and operational improvements Social Contributions: Community employment and skills development programs Innovation: Advanced technology solutions and enhanced processes and compliance with the latest construction regulations such as the Building Safety Act Compliance with regulations and policies Public sector procurement also demands strict adherence to compliance requirements. Here are some of the regulations and Construction legislation that you may need to be able to demonstrate compliance with: PAS 91: Developed by the British Standards Institute (BSI), PAS 91 was introduced in 2010 to reduce the burden of completing multiple, unique pre-qualification questionnaires for different clients. Common Assessment Standard: The Common Assessment Standard Questions are grounded in UK construction legislation, ensuring that the requirements align with national laws and industry standards, and they cover advanced criteria which goes beyond PAS 91. Financial Standing: Public sector authorities are able to review the financial risk of many construction subcontractors, so it’s crucial you can show resilience to economic influences. With Risk Radar from Constructionline you can review the financial data on suppliers, even for companies below the £15m turnover threshold to ensure the financial standing of your public sector procurement supply chain. Health and Safety SSIP Certification: Keep SSIP certifications and accreditations up to date Building Safety Act: With tools such as the Building Safety Act Assessments you can showcase your compliance with the latest Building Safety Act regulations Sign up for Constructionline Gold Membership to showcase your compliance with the above regulations today → Conclusion Public sector procurement provides great opportunities for subcontractors across the entire UK Construction Industry. Subcontractors now need more than just competitive pricing to succeed in winning public sector contracts – you now need to be able to show dedication to transparency, social value, and regulatory compliance while delivering high-quality service. These elements combined with proper documentation and relationship building will stimulate growth in public sector construction projects. As a construction subcontractor, you will see the greatest level of success working in the public procurement sector when you are able to prepare and position yourself strategically against your competitors. You can gain an advantage over other subcontractors by building strong track records, maintaining proper accreditations, and delivering measurable social value. Gold Membership with Constructionline will help you gain more work opportunities with public sector construction buyers. This practical approach with strong systems and clear communication helps build lasting partnerships with public sector contracting authorities. Sign up to Constructionline to boost your Public Sector Procurement processes today! Key Contents Definition and key components Importance of Public Sector Procurement in Construction The Public Sector Procurement Process Regulations and Policies Conclusion Procurement Act 2023 Find out more about the Procurement Act 2023 and its impact on main and subcontractors in public sector procurement Learn More Blog Procurement Act, Public Sector, Supplier
