Part 1: Key Changes & Supplier Benefits
The 24th of February 2025 marks a major milestone for UK public procurement. The introduction of UK Procurement Act 2023 brings significant changes to the tendering process. Reshaping how public, utilities, and defence contracts are awarded.
Whether you’re a seasoned supplier or new to public sector bidding, it’s time to adapt to these new rules.
In this article, the first in a series, we delve into the upcoming changes. And discuss how they impact and benefit suppliers bidding for Public, Utilities and Defence contracts. At the end we include further resources to help you navigate and prepare for the changes.
Why a New Procurement Act
After leaving the European Union in 2020, UK procurement for all Public, Utilities and Defence sectors, has remained tied to EU directives. With new legislation required, this was an ideal opportunity to review and improve regulations and processes for public procurement.
The new Procurement Act consolidates 4 sets of regulations into one set of simple rules. This includes the:
- Contracts Regulations 2015
- Utilities Contracts Regulations 2016
- Defence and Security Public Contacts Regulations 2011
- Concession Contracts Regulations 2016
New Procurement Act: Aims
Some £385 billion is spent per year by public bodies (about 1 third of all public expenditure). The new legislation sets out to simplify and improve the procurement process for both contracting authorities and suppliers.
The key aims include:
- Simplifying the existing complex bidding process for suppliers and especially new entrants unfamiliar with the procedures.
- Ensuring commercial frameworks are more open to allow prospective suppliers better opportunities to become involved and bid for work
- Making it easier for smaller business, start-ups and social enterprises to bid for contracts
- Supplying consistent feedback to prospective suppliers and bid assessments for final tender submissions.
As part of the launch, the existing UK Find a Tender Service is also to be upgraded to make it easier for suppliers to find and bid for contracts. Although the new service will be on the existing URL (www.gov.uk/find-tender) – you will need to register or re-register for the upgraded Portal on 25th February to access the new upgraded version.
There will also be a new Procurement Review Unit (PRU) established in February which will be responsible for three areas of compliance:
- Concerns raised on specific procurement procedures and late payment matters
- Assuring public procurement compliance
- Debarment of suppliers deemed to pose a risk.
New Procurement Act: Objectives
The Procurement Act includes a set of procurement objectives, which all Contracting Authorities will need to give appropriate consideration, throughout the whole procurement process, from initial market engagement to contract award. These include:
- Value for Money: with the aim to achieve the best mix of quality and price across the lifetime of the contract.
- Maximising Public Benefit: consideration to be given to how contracts can provide greater benefit e.g. improve economic, environment and social value.
- Sharing Information: to share information on contracting authorities policies and decisions. Giving improved and greater transparency and supplier understanding.
- Acting and Being Seen to Act with Integrity: contracting authorities to prevent fraud, corruption and misinterpretation over their processes, to ensure contracts are properly managed.
- Treating Suppliers the Same: contracting authorities to ensure all suppliers are competing under equal terms (unless a difference between suppliers justifies different treatment). For example, accepting a late submission from an individual supplier but not accepting from others would be an infringement of the rules.
- Not Putting Suppliers at Unfair Advantage or Disadvantage: contracting authorities to assess and address concerns of unfair advantage or disadvantage. For example, dealing with a conflict of interest identified for one supplier but not other suppliers.
- Having Better Regard to SMEs: contracting authorities to consider and reduce the barriers that small and medium enterprises may face in competing for large contracts. For example, are tender response times realistic for SMEs with no dedicated bid team.
New Procurement Act: Details & Supplier Benefits
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Approach to Conflicts of Interest
The new Procurement Act strengthens the steps contracting authorities need to take. Firstly, to establish potential and actual conflict of interests, through a conflicts of interest assessment, and secondly how to deal with them. Where the supplier cannot mitigate identified areas of conflict of interest they must be excluded from the tendering process.
Supplier Benefits: Gives suppliers extra confidence that the procurement process is being undertaken fairly. Plus assurance that contracting authorities provide clear guidelines for addressing any conflicts of interest.
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Better Value for Money
The new Procurement Act sets out guidelines for contracting authorities to establish and secure better value for money contracts.
Under EU legislation the MEAT guidelines were adopted which considers the Most Economically Advantageous Tender. The new Act requires Contracting Authorities to award contracts under MAT, the Most Advantageous Tender.
Contracting authorities must aim to achieve the best mix of quality and price throughout the lifetime of the contract using a wider range of broader procurement evaluation criteria. This will include assessing the economic, environmental and social value for both the contracting authorities and local communities.
Supplier Benefits: Suppliers will have the opportunity to gain further competitive advantage. By showcasing how their offering will provide wider value and impact above just price. Examples include demonstrating social value through the creation of jobs, skills and apprenticeships and Net Zero for environmental impacts.
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Procurement Pipeline Publication
The new act requires larger Contracting Authorities that spend over £100 million per annum to publish their 18-month pipelines of future procurements at the start of their financial year. This will need to cover all opportunities worth over £2 million.
Supplier Benefits: This provides suppliers with early warning of upcoming opportunities, giving them improved insight into upcoming market opportunities.
This will allow Sales Teams to better plan and prepare for contract authority relationship building and engagement activities.
This will help Bid Teams and Subject Matter Experts take proactive and earlier action to prepare for bid submissions and develop stronger competitive and compelling responses. Contract Delivery teams will also be able to better plan and schedule activities and resources for potential contracts, including internal and contractor requirements.
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Preliminary Market Engagement Notices
This new tool can be used by contract authorities to alert suppliers of their intentions to explore the marketplace. This will help them ascertain supplier capabilities and opportunities for new innovations.
These Preliminary Market Engagement Notices will advertise and invite suppliers to participate in research or events. They will also be used to advise of the subsequent outcomes of the market exploration.
Supplier Benefits: This will provide suppliers early engagement with contracting authorities. As well gaining a better understanding and insight into needs and innovational directions the market is looking to take.
With some industries undertaking huge investment in Research & Development, such as MedTech spending some 8% of sales income, these early engagements will be essential to ensure product development meets the needs of changing markets.
These early interactions and knowledge sharing will also help suppliers better prepare for future tender opportunities, giving your teams more time to finesse your positioning, product benefits and tender responses.
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Flexible Procurement
The new Act replaces existing restrictive procedures with a more simplified and flexible approach. The four previous procedures (Open Procedure, Restricted Procedure, Competitive Dialogue procedure, Competitive Dialog with Negotiations Procedure) are now replaced with just two options:
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- Open Procedure: a single stage process for more straightforward, basic contracts.
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- Competitive Flexible Procedure: allows for contracting authorities to design procurement process es that best suit the market and their needs. This may include multiple stages, negotiations and other options, such as product demonstrations and prototype testing to determine the best supplier for the contract.
The contracting authority will need to demonstrate clear objectives, and transparency in the process. This will ensure suppliers can respond accordingly. Communicated clearly through the tender notices and associated documents.
Supplier Benefits: These simplified options will make it easier for suppliers to understand and optimise their own internal bid management practices and processes to better respond to opportunities.
The new competitive flexible procedures will provide suppliers better opportunities for more engagement, dialogue and negotiations prior to and during the tender process. This will give suppliers opportunities to discuss and showcase innovation and new solutions as part of their tender submission.
This will allow suppliers to move more quickly and easily from R&D phase to product deployment.
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Flexible Frameworks
Frameworks are a public contract between a contracting authority and one or more suppliers for the call off contracts. While the existing conventional frameworks, closed to new suppliers, will still exists, the new legislation will introduce a new flexible framework.
Conventional frameworks run for a maximum of 4 years or 8 years for utilities and defence. The new flexible framework will be open to new suppliers over the 8-year maximum period. The contracting authority is required to open this framework at least once in the first three years and not remain closed for more than 5 years.
Supplier Benefits: This new flexible framework will give suppliers the opportunity to join at different stages throughout the term of the contract. This ensure s suppliers are not locked out of long-term contract opportunities. This will be particularly helpful for new entrants into a market or where a new product is being introduced.
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Dynamic Markets
The new Act provides for lists of unlimited qualified suppliers eligible to participate in future procurements. These new Dynamic Markets replace the existing Dynamic Purchasing System and can be used for a wider range of goods and services. They will be most suited to emerging or niche markets for specialist or complex requirements.
A central register will be made available for full transparency. There is no limit on how long these arrangements can run and they remain open to new suppliers throughout the duration.
Supplier Benefits: will provide suppliers with greater knowledge of market opportunities and competitive landscape. This insight will help identify routes to market and support business development planning.
Keep Up to Date with Procurement Act Progress and Changes
The new Procurement Act is a multifaceted piece of legislation that suppliers will need to thoroughly read and understand.
The above is by no means extensive and represents a summary of key changes and supplier considerations interpreted from the below list of government resources.
- List of all resources: https://www.gov.uk/search/all?keywords=procurement+act+2023
- Guidance documents that cover all aspects of the Procurement Act: https://www.gov.uk/government/collections/procurement-act-2023-guidance-documents
- Technical Guidance and Interpretation of the Act: https://www.gov.uk/government/publications/procurement-act-2023-guidance-documents-procure-phase
- Short guides in PDF and HTML format can be found at: https://www.gov.uk/government/publications/procurement-act-2023-short-guides
- Knowledge Drop YouTube Videos: https://www.gov.uk/guidance/the-official-transforming-public-procurement-knowledge-drops
- Procurement Act summary animations: https://www.gov.uk/government/publications/procurement-act-2023-short-guides/animations-and-videos
Look out for the next blogs in this series!
- Part 2: Changes to post-submission stages.
- Part 3: Preparing for the change and how TenderEyes can help.
- Part 4: Review of the new Find a Tender Service Upgrade.
