The Government has identified the Procurement Act 2023 (“Procurement Act”) as “one of the largest shakeups of procurement rules in this country’s history”.
The Procurement Act received Royal ascent in October 2023 with most of the provisions coming into force on 24 February 2025 (originally due to be implemented on 28 October 2024). The Procurement Act will revoke the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016, and the Defence and Security Public Contracts Regulations 2011. In so doing, it will establish a new public procurement regime regulating procurement in England, Wales and Northern Ireland.
The Government is publishing guidance on the new requirements available via this link. The purpose of this note is to provide an overview of some of the key changes. The Government is also delivering training, details of which can be found here Transforming Public Procurement – GOV.UK (www.gov.uk).
Will the Procurement Act apply to you?
Commissioner – If you are a contracting authority that procures services from third party suppliers and contractors, then the Procurement Act will apply to you. Even if you are not a contracting authority, but you receive substantial public funding or exercise public functions, you may also be caught by the Procurement Act.
Provider – if you provide goods or services to public sector organisations and bodies, you will find yourself directly affected by the Procurement Act.
What is changing?
If you are a charity that tenders for contracts under the Procurement Act, you can expect to see changes in the following key areas:
- Greater Flexibility – There are fewer procurement procedures available, however they are less prescriptive than under the present regime. Contracting authorities can choose from “direct award”, “competitive tendering procedure” and to “award under an existing framework”. Competitive tendering can either be an “open procedure” or “competitive flexible procedure” (“CFP”). The CFP allows for the design of a process to suit a contracting authority’s requirements as long as they comply with the general objectives set out in section 12 of the Procurement Act, various minimum time limits set out in section 54, and the procedures are a proportionate means of awarding the contract by reference to the nature, complexity and cost of the contract. A light touch regime for light touch services is retained and rules will apply to specific ‘below threshold’ opportunities. The greater flexibility allows contracting authorities take a proportionate approach.
- Wider scope – The scope for assessing tender submissions has changed from the ‘most economically advantageous tender’ to the ‘most advantageous tender’, enabling contracting authorities to factor in other considerations into the decision-making process. This will enable charities to better align the tender process with their charitable objects. Government guidance has emphasised that the change in wording is to clarify that contracting authorities need not award on the basis of the lowest price – a useful clarification for charities in particular tenders where contracting authorities can give weight to wider considerations.
- The mandatory standstill period is reduced from 10 to 8 days.
- Procurement lifecycle & enhanced transparency – The regime covers the full lifecycle of the procurement, from pre-market engagement to contract termination. Contracting authorities will need to publish various notices at the pre-procurement phase, during the procurement, and during the term of the contract. There are new obligations to report on contract performance and termination, and to have regard to procurement objectives when making contract management decisions. Contracting authorities will need to publish additional information on a central digital platform as part of the Government’s heightened transparency agenda. This marks a significant shift towards greater accountability from contracting authorities both in administrative and reporting obligations, but also in managing contracts, demanding more resources from charities.
- Procurement principles – The themes of non-discrimination and proportionality still feature within individual obligations, although they are not explicitly identified as overarching principles. The principle of equal treatment remains, with a modified formulation.
- Change in terminology – There is a significant change in language and terminology in the Procurement Act, which has raised questions as to how historic case law may be applied.
- Contracting authorities must have regard to new procurement objectives and barriers for SME participation in respect of above threshold procurements and consider how these may be removed or reduced.
- National Procurement Policy Statement – Contracting authorities must have regard to any National Procurement Policy Statement, which will set strategic priorities for public procurement.
- Wider exclusion grounds & Debarment – There are slightly wider discretionary grounds to exclude suppliers than under the present regime as a result of a supplier’s poor contract performance or as a result of their relationship with associated suppliers and sub-contractors. Contracting authorities must notify Ministers when they exclude a supplier. Ministers may investigate and add the supplier to a central debarment list, which potentially prevents that supplier from bidding on a public procurement for a specified period of time.
How should charities prepare for the upcoming changes?
Charities who tender for services will do so under the Procurement Act in respect of processes commenced after 25 February 2025.
For charities who bid for public contracts, the greater flexibility in the tendering process and shift in focus to other non-financial considerations may improve the position of charities when bidding for public contracts, who may be able to leverage their charitable purposes to gain a competitive advantage in the tender process.
If you have any questions about the Procurement Act or need help updating your procurement policies and procedures or support with training for your bid team, please contact the Stephens Scown Charity team at corporate@stephens-scown.co.uk