ByteSize: The new Procurement Act 2023 (UK)

Introduction

The Procurement Act 2023 represents a significant legislative change in the UK, marking a departure from the European Union's procurement regulations. This Act, which received royal assent on 26th October 2023 and will come into force on 28 October 2023, aims to simplify and improve procurement processes.

The Act represents a significant overhaul of the current public procurement regulations in England, Wales and Northern Ireland. It consolidates over 350 different procurement regulations into a single, unified regime with the aim of creating more efficient and more transparent regime which is more accessible to all. In March 2024, secondary legislation regulations were introduced to implement various aspects of the Act. These regulations govern the practical application of the Act, detailing the operational procedures and guidelines for procurement processes.

With the public sector becoming increasingly reliant on digital technology and IT systems both to function and to deliver public services, the Act is particularly relevant to those operating in the TMT sector.

Overview of changes

Procedures

Under the current regime, there are five competitive procurement procedures. These will be replaced with two main procedures: the open procedure and the competitive flexible procedure. The competitive flexible procedures will allow contracting authorities more freedom to tailor procurement processes to the nature and complexity of the contract which may involve negotiations, software demonstrations, interviews etc. The Act also introduces the concept of open frameworks which will create a scheme of consecutive frameworks on substantially the same terms for periods of up to 8 years that can be refreshed with new suppliers during their term. These open frameworks are intended to provide an opportunity to maximise competition, bring in new market entrants and keep existing suppliers ‘on their toes’.

The competitive flexible procedure, open frameworks and dynamic markets could all help to drive efficiencies and innovation by enabling more bespoke and innovative solutions to be proposed. 

There are also new direct award rules relating to prototypes and development. These rules allow direct awards without a competitive process in order to ascertain the suitability of goods or services, researching the viability of producing or supplying them at scale or other research and development purposes. 

Transparency

Increased transparency is one of the Act’s key objectives. The Act seeks to achieve this, most notably, through the publication of notices, the availability of information to bidders through a central digital platform and the disclosure of more information on contract award. 

There will be pipeline notices, pre-market engagement notices, tender notices, transparency notices, contract change notices, contract termination notices, contract award notices and so on. Suppliers will need to track the publication of these notices to ensure not only that opportunities are not missed but also to monitor the performance of competitors on contracts.

Debarment

Excluding suppliers is one of the areas where we see the biggest changes under the Act. There are new concepts of excluded (where a mandatory ground applies, e.g. criminal offences) and excludable (where a discretionary ground applies e.g. poor past performance) suppliers but the most important change is the introduction of a Government maintained debarment list. Currently, exclusion decisions are made by individual authorities, however, under the Act, any excluded or excludable supplier will appear on the national debarment list. There will be an appeals process around decisions to place a supplier on the debarment list. 

Given the consequences of exclusion, suppliers will have to pay particular attention to this issue, including where they consider a competitor should be excluded. 

Looking forward

Procurement strategies will need to be aligned with the new Act. There will be a shift in focus requiring suppliers to be able to demonstrate their value proposition beyond just cost. The Act’s focus on innovation and quality also presents an opportunity for TMT companies to differentiate themselves by showcasing their technological advancements and commitment to sustainability. 

The Act will reshape the procurement landscape in England, Wales and Northern Ireland bringing both challenges and opportunities. Those participating in public procurements will need to navigate the changes carefully to ensure compliance, whilst also leveraging the new provisions in so far as possible to enhance their competitive edge in the market.