Procurement Act 2023: What’s next and why you should act now
With the Procurement Act 2023 now set to come into force on 24 February 2025, contracting authorities have been given an additional four-month extension to prepare. But with many organisations still far from ready, the question remains: 'why wait?'
At a recent procurement webinar, 70% of delegates admitted they weren't ready for the Procurement Act's original start date of 28 October, with over 15% saying they still had a long way to go.
It is likely that there were sighs of relief when on 12 September the Cabinet Office signaled a four-month delay to the introduction of the Act, intended to allow time for a new National Procurement Policy Statement (NPPS) that reflects the Government's priorities. The Ministerial Statement highlighted that the extension aims to facilitate a smoother transition for both contracting authorities and suppliers.
Where are we now?
The changes to the go live date have been confirmed under The Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) (Amendment) Regulations 2024. This is the date everyone must now work toward.
Transitional provisions
With this delay, any procurements of new contracts, including frameworks and dynamic purchasing systems (DPS), that begin before February 24, 2025, will continue to be governed by the Public Contracts Regulations 2015. This includes call-offs under existing framework agreements and DPS for their remaining terms. For DPS, there is a long stop date of 24 February 2029. In practice, this means that the Public Contract Regulations 2015 could still be applicable for governing call-off contracts and modifications of contracts to 2029 and beyond.
In the case of direct awards, procurements are treated as having commenced if a contracting authority has notified a supplier of its intention to direct award.
Understanding the NPPS
Under section 13 of the Act, contracting authorities must consider the NPPS in their procurement processes. The NPPS aims to better align public procurement with the Government's key priorities: value for money, social value and economic growth. The Government has now launched a National Procurement Policy Statement stakeholder survey, inviting input from the public sector and suppliers regarding procurement priorities. We expect that, given these priorities ought to already underpin procurements, the NPPS will not introduce a significant change in direction in government procurement strategy.
It is also worth pointing out that the NPPS does not apply procurements by devolved authorities who will have their own procurement policy documents.
Key Guidance notes
Several key guidance notes remain unpublished, including:
- Central Digital Platform (Procure): A major reform introducing a single online platform for procurement opportunities and supplier registration. Understanding how this will work will be important for both contracting authorities and suppliers.
- Intra-UK Procurement (Plan): Expected guidance on exemptions for inter-authority procurements, which was missing from the Procurement Regulations 2024.
- Payments Compliance Notices (Manage): Further information regarding the requirement for all contracting authorities to issue payment compliance notes in respect of all contracts by 30 May 2025 at the latest.
- Transitional Arrangements (Procure): This needs to be updated to reflect the new go live dates.
Why you shouldn't delay preparations
The journey toward implementing the Procurement Act has been fraught with delays, and it can be tempting to let the pressure ease. Despite the added time, four months may seem a long way off. However, with the holidays approaching, four months will pass quickly. What can you do to prepare?
We recommend reviewing the following documents to make sure they are in line with the new Act.
- Procurement Strategy/Policy
- Procurement templates such as the Invitation to Tender
- Standard terms and conditions
- Assessment summary template/guidance
- Conflict of interest assessment form
Given the scale of the procurement reforms and extended reach into contract management, a thorough review of your organisation's procurement policies and processes is crucial. Engaging stakeholders from legal, finance, and contract management teams early in the process is advisable, as obtaining necessary approvals can often take longer than anticipated.
Supplier considerations
Suppliers will also be keen to understand how your organisation is approaching these changes. Ensuring they are informed about your readiness and how it may impact them is vital.
Reviewing your Procurement pipeline
Although the date for contracting authorities to publish procurement pipelines by 25 May 2025, where applicable, remains unchanged, the delay to the implementation of the Act means that contracting authorities will need to review and update their current procurement pipelines for the next four months.
For some, the delay is an opportunity to refine procurements due to be commenced before the introduction of the Act. Others may have planned procurements to be able to take advantage of the new competitive flexible procedure. One option may be to try and make use of the delay by carrying out market engagement and getting all the tender documents ready to go for 24 February.
In some cases, you may find that a short-term extension to current contracts is permissible under Regulation 72(1)(b), allowing modifications due to unforeseen circumstances.
The Procurement Act has been a long time coming so there is much to be said for a smoother and more effective implementation process for both contracting authorities and suppliers. You can sign up to our special Procurement Act mailings, including the latest updates, blogs, FAQs and more, here.
This publication is for guidance only. Reliance should not be placed upon it and nor should action be taken, without obtaining advice in respect of the specific circumstances applicable. We will be pleased to offer such advice or assistance.