Understanding the new Procurement Act 2023: What suppliers need to know - Part 1
The Procurement Act 2023 (the Act) introduces a range of reforms aimed at simplifying and enhancing transparency in the procurement process, which should be good news for suppliers.
In this two-part blog series, we answer frequently asked questions to help you understand the impact of the Act and how to prepare.
In Part 1, we will look at how the procurement process has changed for suppliers, from navigating the new Central Digital Platform to benefitting from the new transparency regime. Part 2 will cover the debarment list; contract award process and what options are available to suppliers if things go wrong.
When does the Procurement Act take effect?
The Act was initially set to go live on 28 October 2024, but this has now been delayed to 24 February 2025. The postponement allows time for the government to finalise a new National Procurement Policy Statement to set out its procurement priorities.
As some of the key guidance relevant to suppliers has not yet been published, for example in relation to the Central Digital Platform, the delay should also allow suppliers additional time to get ready.
What are the most significant changes which will impact suppliers?
- Introduction of a Central Digital Platform as an online central repository of information.
- Extension of scope of the Act across the procurement and contract lifecycle to include contract management.
- Introduction of a new competitive flexible procedure.
- Introduction of a new debarment list and extending the grounds of exclusion for suppliers to connected parties and key sub-contractors.
- Introduction of open frameworks.
- Changes to the process for providing feedback on tenders and the standstill period.
- Increased transparency, including publication of an extended range of mandatory notices and contract details.
Are there any transitional rules?
The current procurement rules will remain in effect until 23 February 2025 and will apply to procurements commenced before this date. Procurements started after 24 February will be governed by the new rules.
However, if you are a supplier under an existing framework agreement or dynamic purchasing system, these will continue under the old rules for their remaining term, with a long-stop date of 23 February 2029 for dynamic purchasing systems. In practice, this may mean that contracting authorities are likely to favour procuring through frameworks or dynamic purchasing systems during the transitional period.
What should you do on the go-live date?
As part of the reforms, the current Find a Tender system will be improved to create a Central Digital Platform. This platform will simplify the procurement process for suppliers by allowing you to enter your information once, which can then be reused across multiple tenders.
When the Central Digital Platform goes live, on or around 24 February 2025, suppliers will be required to register and self-authenticate their identity to be assigned a unique identifier. The basic mandatory information (contact details, exclusion grounds, connected persons, audited accounts) will be captured using the Supplier Information System. This replaces the first part of the information required in the Standard Selection Questionnaire.
It is vital that you register as soon as you can after the Central Digital Platform goes live as you will be required to confirm your registration to a contracting authority before you can participate in any tender process.
How can I look for new opportunities?
One of the key objectives of the Act is to improve transparency, making it easier for suppliers to discover new opportunities.
- For below threshold contracts, Contracts Finder will still be active.
- For above threshold contracts, the new Central Digital Platform will be the primary tool for finding upcoming opportunities.
- For suppliers to Wales, upcoming opportunities from Welsh contracting authorities will be published on Sell2Wales as well as the Central Digital Platform.
The extended range of notices includes:
- Pipeline notice - From the financial year April 25 onwards, authorities expecting to spend over £100 million on public contracts must publish a pipeline notice containing details of any contracts over £2 million, helping suppliers plan.
- Contract Award Notice - A new notice advising of a contracting authority's intention to enter into a proposed contract or framework agreement, following a tender process or direct award.
- Contract Change Notice - A new notice advising of a contracting authority's intention to modify a public contract.
Further information about the transparency requirements can be found here.
Are there any changes to the procurement processes?
Contracting authorities will still be able to use the open procedure for straightforward procurements.
However, the new competitive flexible procedure provides authorities with more freedom to design a procurement process that fits their requirements. Authorities will need to take into account the nature, complexity and cost of the contract to ensure the procedure is proportionate to the contract.
For suppliers, this will hopefully provide an increased opportunity to showcase their skills as the procedure can include a negotiation, dialogue or demonstration (for example, a site visit or presentation) stage. Suppliers should ensure that the procedure the authority is seeking to use is set out in the tender notice and tender documents for transparency.
What about the procurement process for light touch services such as health and social services, catering and recruitment?
The light touch regime, which offers lighter regulations for certain services (such as health and social services, catering, and recruitment), is now dealt with by exception under the Act, meaning there is no longer a separate regime.
The mandatory standstill period is no longer required, although it remains best practice and should be clearly indicated in tender documents if used. We will look at the potential impact of this change for suppliers wishing to challenge a decision in Part 2.
If you need to check if a service is classed as light touch, the full CPV list of light touch services is now helpfully set out in Schedule 1 of The Procurement Regulations 2024.
Certain healthcare services will be out of scope of the Act and will instead be governed by The Health Care Services (Provider Selection Regime) Regulations 2023 (the PSR). You can consult Schedule 1 of the PSR or our specialist Healthcare Procurement team for more details.
Can contracting authorities still direct award?
Yes, direct awards without competition are still possible. However, the Act introduces new transparency requirements for direct awards. Contracting authorities must publish a Transparency Notice once a decision to award is made, justifying the direct award.
Along with the Transparency Notice, contracting authorities will also need to publish a Contract Award Notice and observe a standstill period.
What are open frameworks?
An open framework is a new concept designed to foster competition by allowing suppliers to bid for framework opportunities during the lifetime of the framework and is defined as a scheme of frameworks that provides for the award of successive frameworks on substantially the same terms. These frameworks must be re-opened at least once in the first three years and every five years thereafter, with a maximum duration of eight years. Existing suppliers on the framework will need to rebid whenever the framework is re-opened. Similarly, if a supplier is not successful when the framework is first established, they will have further opportunities to be admitted. Open frameworks have been introduced to promote competition and will prevent suppliers from being 'locked out' of opportunities.
How will the contract management provisions impact suppliers?
For the majority of public contracts (with one notable exception being contracts awarded by schools and academy trusts), there will be mandatory payment terms for most public contracts, requiring authorities to pay undisputed invoices within 30 days. This clause cannot be contracted out of, except where both parties agree to shorter payment terms. Hopefully, this should result in improved payment times for suppliers.
For contracts over £5 million, (with the exception of light touch contracts), contracting authorities will be required to set and publish a minimum of three Key Performance Indicators (KPIs), monitor performance against the KPIs and publish a contract performance notice. This will be a public notice and could have an impact on reputation if a supplier repeatedly fails to meet the KPIs.
Where can I find out further information?
You may wish to speak to your public sector customers to find out what they are doing to get ready for the Act. You can also sign up to our mailing list for blogs, FAQs and regular updates here.