The Procurement Act 2023: Key changes and what you need to know

Why should I read this?

The Procurement Act 2023 (the “Act”) finally comes into force today, 24 February 2025. The Act introduces greater flexibility, transparency, and accountability. All tender notices published from today will be subject to the provisions of the new Act. Any procurements initiated before then will continue under the existing regulations.

What do I need to know about the Act?

Key changes introduced by the Act

1. Simplified procurement procedures

• Introduction of a competitive flexible procedure, allowing authorities to design procurement processes tailored to their needs
• Reduction of existing procurement procedures to streamline processes

2. Enhanced transparency

• New mandatory notices at all procurement stages to increase visibility and accountability
• Introduction of a Central Digital Platform to improve access to procurement data

3. Greater focus on social value

• Authorities are encouraged to consider broad factors when evaluating public contracts, including social, environmental, and innovation factors alongside cost

4. Prompt payment requirements

• 30-day payment terms extended to subcontractors to support SMEs and VCSEs

5. Introduction of a central debarment list

• A new mechanism for excluding suppliers, ensuring integrity in public procurement

What should I do?

The Act aims to make public procurement more transparent, fairer, and accessible. Both authorities and suppliers should ensure they understand the new rules and adjust their processes accordingly.

Key considerations for contracting authorities

• Familiarise with the new rules
  • Review the competitive flexible procedure and understand how it can be applied in practice
• Prepare for transparency requirements
  • Authorities will need to be prepared to publish more notices at different stages of the procurement process
  • Ensure internal processes are updated

• Ensure supply chains are ready for prompt payment rules
  • Authorities will be responsible for ensuring compliance with new payment terms

• During the contract
  • For contracts over £5m, at least three KPIs will need to be published and supplier’s performance against those KPIs monitored and published each year
  • Increasing or decreasing the contract term by 10% or more will constitute a substantial modification
• Understand the exclusion and debarment list processes
  • Understand the new exclusion grounds, monitor performance against KPIs and keep records of poor-performing suppliers as exclusion decisions may need to be justified

Key considerations for suppliers

• Stay up to date with new notices
  • With increased transparency, new opportunities will be easier to find
  • Be proactive in monitoring tenders
• Demonstrate social value contributions
  • Contracts are more likely to consider environmental and social benefits - adapt bids to reflect these priorities
  • Ensure your teams are familiar with the National Procurement Policy Statement
• Prepare for the competitive flexible procedure
  • Greater flexibility potentially means greater variance in procurement processes - be ready to tailor responses accordingly
• Ensure prompt payment compliance
  • If working as a prime contractor, ensure payment terms flow down to your subcontractors
• Check for exclusion and debarment risks
  • Be prepared to scrutinise KPIs
  • Maintain strong compliance and track record of performance to avoid potential exclusion
  • Identify and monitor potential issues in group companies and the wider supply chain

You can find further information on the Act in our resources below. If you would like to discuss any of the key changes or considerations of the Act and how this may impact you, please reach out to one of the key contacts below.

View our Procurement Act 2024 guide

View our Spotlight on Debarment guide