UK Procurement Act 2023: preparing for ‘go live’ and beyond
The recent announcement to delay the ‘go live’ date of the new UK procurement regulation to 24 February 2025 gives the public sector additional time to prepare ahead of launch. The continual release of supplementary guidance and the many unanswered questions mean the sector should capitalise on the delay by ensuring that they are business ready for the new launch date.
The UK Procurement Act 2023 is one of the most influential pieces of legislation of the past decade, with wide-reaching impacts for UK supply chains.
With so much yet to be determined before the revised ‘go live’ date, we have set out five key areas that the sector needs to consider to ensure it is prepared and can leverage the new regulations to its fullest potential.
1. Bridging the guidance gap
While the Cabinet Office has provided modular and ‘deeper dive’ training to further educate the public sector on the implications of the act through its Government Commercial College, it is largely high-level, missing specific nuances across the various sub-sectors impacted by the new legislation.
Clients are reporting that the current training and guidance has not fully addressed their concerns or gone into the level of detail given the significant impact these changes will have on day-to-day activities.
The act and its interpretation will look very different for large procuring organisations with an experienced in-house procurement team, compared to smaller organisations who rely on outsourced expertise.
It's important that companies, regardless of size and procurement resource, do not rely on central guidance alone. They should embark on tailored programmes to support their teams to interpret the act.
2. Setting up the right internal processes and procedures
Correctly interpreting the act is essential to ensure internal governance procedures are aligned. Many organisations have not fully grasped how significant these changes will be, including the requirement for increased transparency in reporting, greater emphasis on social value and making procurement opportunities more accessible to small and medium-sized enterprises.
The act seeks to improve transparency across the public procurement process, as from the go live date, any organisations with a total annual procurement spend of over £100m will have to publish their procurement pipelines 18 months in advance.
This means companies will need to undertake major spend identification exercises, especially those organisations without immediate access to this information.
The act also reforms performance management and contract reporting. Contracts with a total value of £5m and above will now require public reporting against pre-agreed KPIs, at least annually, along with the publication of the relevant contract documentation.
Companies will also need to prepare suitable KPIs and other contractor performance measures – and be able to stand by them contractually and be confident in publicly reporting on contractor performance.
While the sector continues to receive guidance from the Cabinet Office, it is essential that organisations establish a suitable system for regular process reviews. There will likely be further queries and unforeseen issues after 24 February 2025, resulting in additional guidance and updates over the coming years, as the new regulations are fully embedded.
3. Preparing platforms and support mechanisms
Organisations within the public sector are not the only ones that need to prepare for the act. As most procurement activity in the sector is administered via third-party e-procurement platforms, these software providers will also need to make sure they are aligned with the new legislation – specifically with the new notice reporting requirements.
E-procurement platforms will need to work seamlessly with the new central government digital platform, although, as the central platform is not currently available, integration will be a challenge.
Although primary responsibility lies with platform providers, organisations impacted by the act will need to engage with providers to be fully aligned.
4. Timely internal stakeholder engagement
Adapting to the new regulations is not just the responsibility of procurement teams. Organisations will need to work with all service areas to ensure they understand the act’s implications.
Many having to learn these new ways of working are doing so on top of their everyday roles and it is key that leadership ensure that preparation is not left until the last minute.
It's also an opportunity to engage in a two-way listening exercise, as procurement teams will need to engage with service areas across their organisations if they are to successfully embed new ways of working.
5. MEAT to MAT award criteria: embracing the change
Arguably, the new regulations have reduced the focus on traditional economic value considerations in procurement. By changing focus from ‘Most Economic Advantageous Tender’ (MEAT) to simply the ‘Most Advantageous Tender’ (MAT), the new act will support the appoint of contractors that offer innovative market leading solutions.
This was a clear ambition from the act’s inception, with the aim to encourage the sector to be more creative in setting evaluation criteria, driving innovation and future-proofing contract deliverables. The change should open doors for a broader set of firms to be successful in contract opportunities.
The new era of procurement
The delay to ‘go live’ further demonstrates just how complex the Procurement Act 2023 is. This should not be seen as a chance to postpone planning, rather an opportunity to ensure organisations are equipped and ready for when the Act launches.
Those that prepare now and remain flexible for the changes that could follow will be best placed to succeed in this new era of public procurement.