The Procurement Act 2023, effective from 24 February 2025, marks a significant change of the UK's public procurement landscape. This legislation introduces a unified set of regulations governing how public sector bodies acquire goods, works, and services, aiming to create a more efficient and transparent procurement process.

If your business supplies goods, works or services to organisations in the public or utility sectors, or you are planning on, these changes will impact your business.

Key Changes to be aware off

Centralised Digital Platform:

• The 'Find a Tender' service has been integrated into a new Central Digital Platform (CDP). This platform serves as a centralised hub where suppliers register their details and access tender opportunities. All businesses seeking to engage in public sector contracts must register with the CDP to participate in procurement activities.

Simplified Procurement Procedures:

The Act consolidates multiple procurement procedures into two primary methods:

• Open Procedure: A straightforward process allowing all interested suppliers to submit tenders without pre-qualification stages.
• Competitive Flexible Procedure: Provides contracting authorities with the flexibility to design procurement processes tailored to specific needs, potentially including multiple stages and negotiations.

Enhanced Opportunities for SMEs:

To foster greater participation from small and medium-sized enterprises (SMEs), the Act:

• Reduces Barriers to Entry: Encourages procurement designs that minimise unnecessary obstacles for SMEs.
• Promotes Contract Lotting: Advocates dividing larger contracts into smaller, more manageable lots, enabling SMEs to bid for portions of contracts aligned with their capabilities.

Prompt Payment Provisions:

• The legislation enforces stricter payment terms to support supplier cash flow:
  • 30-Day Payment Terms: Mandates that contracting authorities settle invoices within 30 days, a requirement that extends to all tiers of subcontractors.

Increased Transparency and Compliance:

The Act introduces measures to enhance transparency and accountability:

• Procurement Review Unit (PRU): Established to oversee compliance with the new regulations, the PRU investigates contracting authorities and suppliers to ensure adherence to the Act.
• Expanded Notice Requirements: Contracting authorities are now obligated to publish a broader range of notices throughout the procurement lifecycle, providing suppliers with greater visibility into upcoming opportunities and decisions.

Most Advantageous Tenders (MAT):

The overall basis of award is now referred to as the Most Advantageous Tender (MAT), replacing the previous Most Economically Advantageous Tender (MEAT) terminology. However, this is simply a name change not a policy change. It clarifies and reinforces that contracting authorities are not obligated to award tenders based solely on the lowest price or cost, allowing for the consideration of broader factors such as social value and sustainability. This change aims to ensure a more balanced approach in procurement decisions.

Focus on Performance:

The UK government has implemented measures to hold suppliers accountable for their performance, enhancing overall marketplace integrity. Key elements include:

• Central Debarment List: A new list identifies suppliers that should be excluded from public contracts. Depending on the reason there is both Mandatory Exclusions and Discretionary Exclusions.
• Extended Due-Diligence: Suppliers must ensure they are not connected to any entities on the debarment list, as businesses within the supply chain on the list cannot be used for public sector contracts.
• Key Performance Indicators (KPIs): Contracting authorities are required to establish at least three supplier KPIs for contracts worth over £5 million. Supplier performance will be monitored, with a Contract Performance Notice published at least once a year.

For businesses aiming to engage with the public sector, understanding and adapting to these changes is crucial. The Procurement Act 2023 not only streamlines processes but also opens new avenues for suppliers, particularly SMEs, to participate in public contracts. Staying informed and prepared will be key to leveraging the opportunities presented by this legislative transformation.

You can find more information on The Procurement Act 2023 here.

How can SustainIQ help?

At SustainIQ, we are committed to helping our customers get full visibility of their sustainability performance by providing them with access to accurate and reliable ESG data in real time.

At SustainIQ, we understand the complexities of navigating procurement. We offer tailored questionnaire forms that can be emailed to supplier and subcontractors that you work with. Completed online, these questionnaires will gather essential information from suppliers, such as their policies and certifications, ensuring that all your suppliers meet the necessary standards required for public sector procurement. Once completed, the form is automatically uploaded to your SustainIQ account for your records. By using SustainIQ, you can streamline your supplier evaluation process, enhance compliance, and position your business for public procurement.

To learn more or book a demo of SustainIQ, click here, or email us at [email protected].