Preparing for transition: The Procurement Act 2023

The Procurement Act 2023 (the Act) received Royal Assent on 26 October 2023 and the Cabinet Office has confirmed it is expected to go live on 28 October 2024. It is divided into 13 Parts plus schedules and is intended to catch all public procurement in England, Wales and Northern Ireland.

Principles and objectives

Under the Act a Contracting Authority (the CA), as defined in section 2, may not carry out a covered procurement except in accordance with the Act. When awarding a tender, the CA must have regard to delivering value for money; maximising public benefit; sharing information; and acting, and being seen to act, with integrity.

Award of public contracts and procedures

The pre-procurement stage is covered in sections 15 – 18 of the Act. A CA must publish a preliminary market engagement notice if it undertakes preliminary market engagement, or otherwise it must provide reasons for not doing so. A CA must also consider at this stage whether the contract deliverables could be supplied under more than one contract and whether such contracts could be awarded by lots.

Under sections 19 – 40 of the Act, two primary competitive procurement procedures are available to CAs: the single-stage (open) procedure and the competitive flexible procedure. Both are designed to ensure the contract is awarded to the most advantageous tender that satisfies the authority’s requirements and best meets the award criteria.

The competitive flexible procedure allows for a more tailored procurement process and must be a proportionate means of awarding the contract.

The award criteria must relate to the subject matter of the contract; be sufficiently clear, measurable and specific; not break rules on technical specifications (see section 56); and be a proportionate means of assessing the tenders.

Exclusions

The Act distinguishes between excluded and excludable suppliers, with mandatory exclusion grounds outlined in Schedule 6 and discretionary grounds in Schedule 7. Notably, the grounds for exclusion due to poor performance are broader but require evidence of prior contract management steps.

Direct awards

Under sections 41 – 44, a CA may make a direct award if a justification, as outlined in Schedule 5, applies or if no suitable tenders were received during a competitive procedure. However, before entering into a directly awarded contract, a transparency notice must be issued.

Post award

Before entering into a public contract, a CA is required to issue a contract award notice. Prior to publishing this notice, the CA must provide suppliers with an assessment summary that includes information on how the tender was evaluated and, if applicable, details about the winning tender if it differs from the supplier’s submission.

Following award a contract details notice is required, in most cases within 30 days of entry into the contract. Should a CA intend on terminating a covered procurement pre-award, a procurement termination notice is required.

Preparing for transition

Firstly, it is important to ensure all contract registers are up to date. Secondly, consider what procurements will be coming up in the next few months. It will also be necessary to review and update internal documents that relate to procurement activities to ensure they align with the requirements of the Act. A similar process will need to be undertaken for external documents too such as template invitations to tender and standard contracts. Consider also whether any new external documents are required too, such as separate versions of competitive flexible procedures versus open procedures.

Additionally, e-solutions and software may require an overhaul. Public bodies will need to identify which e-solutions will be impacted, with contract management software likely to be affected as there are significant new reporting and notice requirements. It may be necessary to engage with software suppliers to understand their roadmap to implement the required updates. This could also be an opportunity to see whether the systems are still required, or whether new ones are needed.

Summary

The Act applies to largely the same contracting authorities, contracts, and circumstances as the Public Contracts Regulations, Utilities Contracts Regulations, and Concession Contracts Regulations. If a competitive procurement was previously required, it will likely still be necessary under the updated rules. Now, there are only two competitive procedures available, but dynamic purchasing systems (DPS) and frameworks can still be used, with DPS now renamed as the “dynamic market.” The Act introduces enhanced notice and contract management requirements