Procurement Act 2023

On Thursday 1st February 2024, I attended a Rail Industry Association event for small and medium enterprises (SMEs) focusing on navigating the New Procurement Landscape. It aimed to upskill SMEs on the procurement reform coming later this year and to show them how to demonstrate value during tender responses. I enjoyed the presentations from four speakers, who were very knowledgeable in their specialist areas. The talks sparked some interesting discussions. Here, I summarise the key themes discussed on the day.

The construction industry in the UK is embracing significant changes in its procurement landscape with the introduction of the Procurement Act (2023) . This landmark legislation marks a pivotal moment in shaping how the UK government sources goods and services, aiming to enhance transparency, competition, and efficiency in the procurement process.

The UK’s exit from the EU, provided an opportunity to review and update the current rules to allow more flexible, modern and innovative approaches to procurement. The ‘Act’ is the overarching Legislative Framework and there will be further supporting Regulations/Secondary Legislation published.

It is anticipated the new act will be put into effect in October 2024. There will be a transitional 6-month period where procurements started under the current regulations (where notice has been published) or where a contract has been awarded can continue under these rules until their natural expiry.

Procurement Reform will replace the existing multiple legislations with a single legal framework that applies to all public contracts above a certain threshold, opening new opportunities for different businesses to participate in government procurement processes. The simplified procedures create a more favourable environment for small and medium-sized enterprises and promote fairer competition for both established and emerging businesses.

Reflecting a global shift towards environmentally friendly practices, the new act places a strong emphasis on sustainability. Procurement decisions will now consider the environmental impact of goods and services, encouraging a more responsible approach to procurement. There is a shift to include more social value and sustainability elements beyond just pricing: changing from a preference for the “most economically advantageous tender” to the new “most advantageous tender”. Construction companies in the UK with a commitment to sustainability will find themselves more in sync with the new procurement landscape.

While the Procurement Act 2023 brings about these positive changes, the construction industry will inevitably face challenges in adapting to this new regulatory framework. Various construction enterprises will need to stay informed and prepared for changes in procurement processes, compliance requirements, and reporting standards.

In conclusion, The Procurement Act 2023 marks a significant turning point for the construction industry in the UK. While challenges may arise during the adaptation process, the overall impact is expected to be positive, bringing a more competitive, accountable, and environmentally friendly procurement environment.

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