Preparing for the Procurement Act 2023

What is the Procurement Act 2023?

The Procurement Act 2023 is a new legislation set to transform the procurement procedures in the UK. It will replace all existing EU-based procurement regulations, including Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016, and Defence and Security Public Contracts Regulations 2011.

This is simply the biggest change to public procurement legislation for all public bodies, which between them spend £300bn per year. The Procurement Act 2023 aims to overhaul the prior system, simplifying processes, focusing on transparency, promoting fairness and integrity, delivering value for money, and achieving public benefit maximisation. Additionally, it encourages broader national goals like supporting SMEs (small and medium-sized enterprises) and achieving net-zero environmental targets.

When will the Act be implemented?

The new procurement regime will come into force in October 2024. The Act is reliant on future secondary legislation that will set out more detail on how the Act will operate. The first set of guidance was released on 26 March 2024, covering the legal framework, key changes and key points which include definitions of Contracting Authorities, Valuation of Contracts, mixed procurement, thresholds and other key information. Note that most organisations will still have to operate the contracts to which previous regulation applies.

Key provisions of the Act

• Transparency – The Act mandates increased transparency in procurement processes, requiring organisations to disclose more information about procurement opportunities, evaluation criteria, and contract awards.
• Fairness – The Act emphasises fairness by prohibiting discriminations throughout the procurement process to ensure all suppliers, particularly SMEs, have equal access to government contracts.
• Efficiency – The Act seeks to improve efficiency by introducing measures such as electronic procurement platforms and standardised procedures to reduce administrative burdens and enhance the speed of procurement activities.
• Compliance – Compliance with the new legislation is mandatory for all public sector entities involved in procurement. Failure to adhere to its provisions may result in penalties, including contract termination.

How to prepare for the Procurement Act 2023

To prepare for the new requirements of the Procurement Act 2023, public sector organisations should treat this as an organisational change programme. This includes:

• A review and update of commercial strategies.
• Work and procurement planning.
• Governance, assurance, reporting and disclosures.
• Resources to enable the implementation of the new regime.

Additionally, public sector organisations should evaluate how different teams (such as procurement, contract management, finance and technical) will be impacted, and how they will need to align to ensure readiness for effective implementation of the Act. The training requirements for affected teams will need to be identified, and a communication strategy should be rolled out to raise awareness and ensure that everyone across the organisation understands their obligations.

How can we help?

• Providing the Procurement Act 2023 readiness assessment (gap analysis and recommendations).
• Supporting procurement, legal and finance teams and contract management functions with the revised procurement process, establishing performance monitoring, budgeting and transition planning.
• Working with the contract management function to update contract management processes to include additional reporting and transparency requirements and establish a monitoring mechanism.
• Training procurement teams and other stakeholders on the new procedures, evaluation methodologies, and the increased emphasis on outcome-focused procurement.
• Helping our clients to update their risk framework, revisiting risk assessments for procurement considering both traditional risks (supply chain disruption) and new risks associated with broader value goals.
• Audit and assurance of the revised processes and controls and other governance and compliance elements.

Get in touch

To speak with a member of our Commercial Advisory Team about the Procurement Act 2023, please get in touch.

Contact us today