The Procurement Act is coming fast into effect and it will bring exciting opportunities for SMEs. The Act represents a major shift in the UK’s public procurement landscape, creating new opportunities while maintaining a strong focus on fairness, transparency, and value for money. Businesses, especially SMEs, will benefit from simplified procedures and more access to government contracts.

However, adapting to the new law will require businesses to stay informed, focus on sustainability, and ensure compliance with the new social and environmental criteria. As the procurement landscape evolves, businesses that embrace these changes and innovate will be well-positioned for success.

How will these changes affect your business and what skills will your team need to develop to meet the changing demands? 

What is the Procurement Act? 

In 2022, the UK government introduced the Procurement Bill to overhaul the country’s public procurement system. This Bill is set to replace the EU’s procurement rules that the UK was bound to under the European Union before Brexit. The Procurement Act received Royal Assent in October 2023. After some initial delays, the Procurement Act will come into force on 24 February 2025.

Businesses who sell their goods and services into the public sector will need to consider the Procurement Act closely at Invitation to Tender stage. One of the key elements of the new Act’s requirements is to demonstrate the sustainability of your business and its goods and services to ensure you have strong environmental considerations.

Key Features of the Procurement Act

Simplified Procurement Processes

One of the primary goals of the Procurement Act is to simplify and streamline the procurement process. The Act replaces over-complicated rules and processes with more flexible procedures. This includes a single-stage competitive process that aims to make procurement faster and easier for both suppliers and contracting authorities.

Greater Focus on Value for Money

The Procurement Act reinforces the principle of value for money, ensuring that contracting authorities prioritize cost-effectiveness and efficiency when awarding contracts. This means that businesses will need to provide competitive offers while demonstrating their ability to deliver high-quality goods, services, or works.

Supplier Diversity and SME Engagement

The Procurement Act encourages greater participation from small and medium-sized enterprises (SMEs) by reducing barriers to entry. The law allows for more flexible contract sizes and encourages contracting authorities to engage with SMEs. This move is expected to diversify the pool of suppliers, giving smaller businesses more opportunities to win government contracts.

Transparency and Accountability

Transparency remains at the heart of the procurement process. The Procurement Act enhances the accessibility of information by requiring contracting authorities to publish more detailed procurement information. Suppliers will have better access to contract opportunities and will be able to track the progress of procurement procedures.

New Remedies and Dispute Resolution

The Procurement Act introduces a new system of remedies, offering suppliers more options to challenge procurement decisions if they believe the process was flawed or unfair. There are also provisions for alternative dispute resolution to help resolve conflicts without the need for lengthy litigation.

Environmental and Social Value

The Procurement Act places greater emphasis on environmental sustainability and social value. Contracting authorities are now encouraged to consider broader social and environmental impacts when awarding contracts. For instance, businesses may be asked to demonstrate their commitment to reducing carbon emissions, promoting equality, or contributing to local communities as part of their bids.

Changes to Framework Agreements

The Procurement Act introduces changes to the use of framework agreements, which are arrangements used to establish terms and conditions for future contracts. Under the new law, these agreements are expected to be more flexible and better suited to meet the needs of modern procurement.