Episode 157 - *Bonus* Procurement Act 2023

This week we will be talking about the newly adopted Procurement Act 2023. This episode content meets PC3 - Legal Framework & Processes of the Part 3 Criteria.

Resources from today's episode:

Legislation:

• https://www.legislation.gov.uk/ukpga/2023/54/contents

Government Guidance:

• https://www.gov.uk/government/publications/procurement-act-2023-short-guides/the-procurement-act-2023-a-short-guide-for-suppliers-html
• https://www.gov.uk/government/collections/procurement-act-2023-guidance-documents

Other Useful Websites:

• https://www.architecture.com/knowledge-and-resources/knowledge-landing-page/what-does-the-procurement-act-mean-for-architects
• https://www.crowncommercial.gov.uk/news/procurement-essentials-procurement-act-2023-crown-commercial-service

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Transcript

Episode 157:

Hello and Welcome to the Part3 with me podcast. 

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I am your host Maria Skoutari and this week is a bonus episode talking about the newly implemented Procurement Act 2023. Todays episode meets PC3 of the Part 3 Criteria.

I previously covered Public Procurement in episode 55 and mentioned that post-Brexit, the UK introduced The Public Contracts Regulations 2015 which addressed the contracts awarded by the government, local authorities and other public sector bodies. Additional regulations included the Utilities Contracts Regulations 2016, which implemented the EU Utilities Contracts Directive addressing the contracts awarded by operators of utilities services including water, energy and transport and the Concession Contracts Regulations 2016, which implemented the EU Concessions Directive and addressed contracts between contracting authorities and suppliers. 

As of the 24th of February 2025, the new Procurement Act replaces all existing legislation governing public procurement into a single statutory framework. This Act, which received Royal Assent in October 2023, represents the most significant reform in years.

Its goal is to improve and streamline procurement processes, making it easier for businesses, especially small enterprises, start-ups, and social enterprises, to compete for government contracts.

For businesses and contracting authorities, these changes bring new opportunities but also new risks. From stricter exclusion rules to greater contract oversight, understanding the impact of these reforms is essential for ensuring compliance and remaining competitive.

Key item to highlight is that, for cases where the tender process had already begun prior to 24th of February, arrangements will continue to be governed by the previous rules.

So what are the changes the new Act introduces:

• It aims to simplify the bidding processes to make it easier to bid, negotiate and work in partnership with the public sector, providing a new ‘competitive flexible’ procedure.
• It also seeks to make commercial frameworks more open, so prospective suppliers are not shut out for long periods of time. There will be “closed frameworks”, which will operate in a similar way to existing frameworks, and "open frameworks" that must be periodically refreshed. Open frameworks will be designed to allow new people to come in at scheduled times within an extended eight-year period.
• It removes bureaucratic barriers for smaller businesses and Voluntary, Community and Social Enterprises so they can compete for more contracts - introducing strengthened provisions for prompt payment throughout the supply chain, enabling them to benefit from 30-day payment terms on a broader range of public sector contracts.
• It requires public bodies to provide consistent feedback for suppliers for final tenders.
• Introduces stricter contract management rules to ensure accountability.
• Under the Act, the UK Government will periodically publish a National Procurement Policy Statement (NPPS), outlining the strategic priorities for public procurement. Contracting authorities are legally required to have regard to these priorities when making procurement decisions. The National Procurement Policy Statement may include directives on delivering social value, promoting supplier diversity and supporting innovation and resilience.
• One of the most important areas of change surround exclusions for bidder ineligibility and the introduction of the debarment list. The debarment list will serve as a register of known grounds of ineligibility that may apply to a supplier, which may also arise through the activities of its parents, subsidiaries or directors. Inclusion on the list will severely restrict or even completely prevent bidders from participating in public tenders. The government has already announced that seven firms named in the Grenfell Tower Inquiry report are currently under investigation and could face future disbarment. Whether or not a supplier has been listed, the public body carrying out the procurement may remove a bidder from the process if one of the listed grounds of exclusion applies to it. The different grounds of exclusion are divided between the more serious “mandatory” grounds and slightly less serious “discretionary” grounds. The lists include such grounds as convictions for environmental or labour law offences, bankruptcy, professional misconduct, anti-competitive agreements, severe conflicts of interest, breach of a public contract or unsatisfactory performance, and improper conduct in procurement. The Act, however, does provides suppliers with the opportunity to “self-clean” and so be readmitted to the tender list if they can successfully demonstrate that corrective measures have been put in place in their business. It is important to note that becoming subject to any ground of exclusion, mandatory or discretionary, could lead to the early termination of public contracts governed by the Act. Not every bidder that is the subject of a ground of exclusion will be included on the debarment list. This should be reserved for high-risk suppliers. Suppliers may only be listed after an investigation has taken place and the supplier given the opportunity to appeal. If the supplier is listed in connection with a ground of mandatory debarment, it will have to be excluded from all tender processes unless and until removed. Listings will list between three to five years unless the supplier successfully appeals the decision or otherwise applies to the government to remove its name from the list. For architects, they will need to pay attention not only to their own corporate governance, but must carry out due diligence on any partners they might have in a bidding consortium or special purpose vehicle. An innocent architect could potentially find themselves facing exclusion from a tender process due to their association with a bidding partner subject to a ground of exclusion and therefore should thoroughly research their chosen partners.

Now, circling back to the simplification of the bidding process, one of the ways in which procurement has been simplified is by reducing the number of processes. There were six procurement procedures previously, these have now been reduced to just two main competitive tendering procedures:

• Open Procedure: a straightforward single-stage process, likely to be reserved for simpler or low-value procurement and allowing for wide competition. Under this process, the contracting authority invites interested parties to submit tenders by a specified date and all tenders that meet the criteria are evaluated and the contract is awarded to the bidder with the most economically advantageous tender. 
• Competitive Flexible Procedure: gives contracting authorities more freedom to design their own competitive procedures based on their specific needs – this replaces processes such as the restricted, competitive dialogue and negotiated procedures.

In both cases, and to meet the requirements of the regulations, the procedure starts with the publication of a tender notice on the new Central Digital Platform (CDP) - Find a Tender, before being posted elsewhere. Authorities must ensure that the procurement process adheres to the objectives and principles outlined in the Act, such as transparency, proportionality, and non-discrimination.

The Act applies to contracts for goods, services, and works awarded by contracting authorities that exceed specific financial thresholds, which are listed under its Schedule 1, these include:

• Public works contracts: (including utilities contracts or defence contracts which are works contracts): £5,336,937
• Contracts for services and supplies to a central government body: £138,760
• Contracts for services and supplies to a sub-central government body: £213,477
• Concession contracts (including utilities concessions): £5,336,937
• Light touch contracts (generally): £663,540 or £5,336,937
• Contracts for services for a utility body: £426,955

Then under Schedule 2, the Act lists the types of contracts and procurement scenarios explicitly excluded, which includes:

• National Security and certain Defence Contracts: Excludes contracts necessary to protect national security or those covered by international defence agreements. 
• Financial Services: Contracts for loans, debt instruments, and government securities are exempt.
• Below-Threshold Contracts: Contracts that do not meet the specified monetary thresholds are excluded from the full scope of the Act, though simpler rules may still apply.
• Emergency and Exceptional Circumstances: – Contracts awarded during public health emergencies (e.g., pandemics) or other crises may follow expedited procedures outside the standard Act framework. – Direct awards may be allowed under urgent circumstances that cannot wait for competitive procurement processes.
• International Agreements and Treaties: Contracts subject to specific international trade agreements or treaties may follow separate rules that override the Act.

There are also a number of mixed contracts which the Act considers, which are contracts that serve multiple purposes, such as those combining commercial objectives with defence or security needs. The Act provides guidance for determining whether such contracts fall within its scope:

• Primary Purpose Test: If the primary purpose of the contract aligns with a category governed by the Act, it will typically apply to the entire contract.
• Severable Components: In cases where distinct parts of the contract serve different purposes, only the applicable portions may fall under the Act.

Suppliers should work closely with contracting authorities to clarify the treatment of mixed contracts, especially in high-stakes sectors like utilities and defence.

Now to support greater oversight of the procurement process, the new Act has introduced a new role, the Procurement Review Unit:

That will have responsibility for oversight for public procurement. The Procurement Review Unit will engage with contracting authorities across all sectors and suppliers to achieve the shared ambition to raise standards in public procurement and ensure that the changes introduced by the Procurement Act 2023 become adopted practice. The Procurement Review Unit will maintain and build upon the existing Public Procurement Review Service (PPRS), where users can address concerns regarding public procurement practices relating to a specific procurement procedure and late payment matters.

The Procurement Review Unit will offer three services:

• The existing Public Procurement Review Service
• A new Procurement Compliance Service
• A new Debarment Review Service

Now, in terms of the key benefits and objectives the Procurement Act introduces that all contracting authorities must adhere to when conducting public procurement,  includes:

• As mentioned, creating a simpler and more flexible commercial system that better meets the country’s needs, while remaining compliant with international obligations.
• Delivering value for money ensuring that public contracts deliver high-quality outcomes at the most economical cost, considering the entire lifecycle of goods, works, or services.
• Opening up public procurement to new entrants, such as small businesses and social enterprises, so that they can compete for and win more public contracts.
• Taking tougher action on underperforming suppliers and excluding suppliers who pose unacceptable risks.
• Embedding transparency throughout the commercial lifecycle so that the spending of taxpayers’ money can be properly scrutinised. This includes publishing contract notices, award details, and other relevant data.
• Placing greater emphasis on ethical procurement and maximising public benefit, including promoting environmental sustainability, social value, and broader societal goals such as addressing climate change and supporting local communities.
• Promoting equal treatment and integrity. Contracting authorities are expected to treat all suppliers fairly, ensuring non-discrimination and equal treatment, while also taking steps to prevent unfair advantages or disadvantages among suppliers.

To achieve these goals, the Act simplifies procurement procedures, increases supplier opportunities, and introduces new compliance measures to maintain high ethical and operational standards.

Now circling back to the Central Digital Platform, previously mentioned:

The new Act aims to make it easier to find and bid for contracts and as such has made Find a Tender its new central digital platform to be used to facilitate the publishing of required notices and documents in accordance with the new regulations. To meet the requirements of the Act, therefore, all procedures for public sector tendering must start with the publication of a tender notice on Find a Tender.

Find a Tender is the UK Government’s official portal for finding and applying for Public Contracts.  It is also the place where identifiers are recorded and/or issued and for suppliers to input their commonly used information. It is a fully integrated digital platform where noticing, sign-in and registration, supplier information all work together to support public sector procurement.

Under the new regime, contracting authorities must now consider how their procurement activities can maximise public benefit, including promoting environmental sustainability, social value, and broader societal goals such as supporting local communities. For tendering architects, this may call for more investigation into identifiable and quantifiable social value outcomes in outline submissions.

With the new Act, the registration process on Find a Tender will be:

• Simplified alongside offering a simple identification process for both suppliers and buyers
• Offer businesses the opportunity to store their core details that they can use for multiple bids and
• Provide them with the ability to manage and update their core information quickly and share them easily with contracting authorities. 
• Make public procurement opportunities visible making it easier to search at no cost and set up alerts for tenders of interest for suppliers.
• Allow for procurement noticing throughout the procurement lifecycle.
• Capture procurement data and eventually allow creation of dashboards to analyse that data.

From the 24th of February 2025, both above and below threshold notices about new UK procurements will be published on Find a Tender. And it will be where all UK contracting authorities publish information relating to procurement.

If you are a buyer, given most buyers use a third party to facilitate the publication of their notices, buyers will typically log into and publish their notices from there. However, many buyers will never need to visit Find a Tender, other than to register, and use the data for research purposes and as a contingency if their eSender is unable to publish for any reason. For teams that publish directly on Find a Tender, online forms have been set up for the required publication points. 

If you are a supplier, Find a Tender is the place for suppliers to find out what opportunities are coming along that they might wish to bid for, as well as details on contracts that have been let, how contracts are being changed and other useful information. Additionally, suppliers register, input and then share their commonly used information as part of the procurement. They will only need to register at the point that they want to bid for a contract. 

So what can organisations do to prepare for the introduction of this new Act:

In order to take full advantage of the new regime, organisations should treat this as an organisational change programme. To prepare, procurement and commercial teams have been working closely with the Government Commercial Function to:

• consider future pipelines of work and which procurements, following go-live, would benefit from the new flexibilities.
• review commercial strategies including planning, governance, assurance and resources to enable the implementation of the new regime. 
• identify all colleagues who need to access the training and oversee their participation.

For suppliers, their key takeaways from the Act is that:

To protect their rights, suppliers should monitor procurement outcomes closely and initiate challenges promptly within the established time limits.

• They should use the Standstill Period, meaning, they should leverage the standstill period for thorough decision review and timely challenges. Supplier should be aware of the importance of the eight working-day timeframe.
• Monitor publications for Contract Change Notices and Award Notices
• Utilise the PRU and court options within statutory timeframes to maintain eligibility and uphold rights. 
• Regularly align their practices with national priorities, as outlined in the National Procurement Policy Statement.
• Implement processes that ensure ongoing compliance and adaptability to regulatory changes, promoting longterm success.

These mechanisms, governed by strict time limits, ensure that suppliers have effective avenues for redress, enhancing transparency and accountability.

What does the new Act mean for architects:

A development of particular interest to architects will be the “market engagement notice” where the contracting authority will invite consultants to engage in project scoping discussions before they begin the formal procurement process. This is to avoid procurements being launched too hastily only to be modified at a later stage, or even cancelled, which can be expensive for all parties. Earlier engagement with suppliers and stakeholders should lead to a better use of public money. Such engagements may have taken place in the past, but now the process will be subject to more transparency requirements. A market engagement notice must be issued and there are guidelines on how engagement should be conducted. This will reduce the risk of a client being influenced disproportionately by a particular adviser and subsequently issuing a tender that is unfairly skewed to that adviser’s strengths and skillset. 

Architects also need to be aware that the Act is far more prescriptive in relation to the management of regulated contracts. It sets out standards for contract modifications, performance monitoring and financial compliance which architects should familiarise themselves with.

To sum up what I discussed today:

• The Procurement Act 2023 came into force on the 24th of February 2025, bringing the most significant reforms to UK public procurement in decades.
• Its aim is to enhance transparency, competition and accountability and introduces new rules that businesses and public sector bodies must navigate.
• The Act reduces the number of procurement procedures from six to two: Open procedure and Competitive Flexible Procedure. 
• The Act strengthens the bidder eligibility criteria through the introduction of the debarment list that excludes suppliers involved in legal or ethical violations, including labor law breaches, bankruptcy, and anti-competitive behaviour. Suppliers can appeal or “self-clean” to regain eligibility.
• The Find a Tender platform becomes the central digital platform for public procurement. It will host all procurement notices, contract awards, and supplier registrations, making it easier for businesses to find and bid for government contracts. Suppliers can store and manage their core details for multiple bids, while contracting authorities must publish tender notices here to ensure transparency and compliance.
• The new Act is introducing a new regulatory body, the Procurement Review Unit to oversee compliance, resolve procurement disputes and manage debarment cases.