Complete Guide to the Procurement Act 2023
Procurement plays a vital role in the effective functioning of the public and private sectors. To ensure transparency, accountability, and efficiency, governments across the world periodically revise their procurement frameworks. In the United Kingdom, the Procurement Act 2023 represents a significant step forward in modernising and streamlining procurement processes.
On 24 February 2025, The Procurement Act 2023 will go into effect. For organisations and suppliers, understanding and adapting to this new framework will be essential to thrive in the evolving procurement landscape.
The Procurement Act 2023 Explained
When the UK departed from the European Union in 2020, the government embarked on a new path for trade. Their objective was to establish a system that is simpler, more adaptable, and more closely aligned with the UK’s commercial aspirations while maintaining global commitments and compliance.
The Procurement Act 2023 marks a pivotal shift in procurement practices, focusing on modernising and enhancing the efficiency of procurement processes.
The Act applies to all public sector bodies, including central and local governments, as well as utilities and other entities undertaking public procurement.
Has the Procurement Act 2023 been delayed?
Yes, the Procurement Act 2023 has been delayed. It was originally set to go live in October 2024. The below details a complete timeline of events:
- May 2022: A draft of the Procurement Bill was published by the government.
- December 2022: The Procurement Bill was passed by the House of Lords.
- October 2023: The Act received Royal Assent on 26 October.
- October 2024: The Act was scheduled to go live on 28 October, with a 6 month notice period before implementation started. This was postponed.
- February 2025: The new date was revealed to be 24 February.
The government stated the delay was because they needed additional time to deliver a smoother transition and effective implementation for both contractors and suppliers across the UK.
Procurement Act 2023: What’s New?
With the Procurement Act 2023 set to go live on 24 February 2025, what are the key changes that we need to be aware of?
Contracts can be awarded on non-financial criteria
One of the biggest changes is that contracting authorities are to select the Most Advantageous Tender, not just the cheapest. This allows them to consider a wider variety of factors, including quality, innovation, and environmental impact.
More support for SMEs and local business
The Act also witnesses an introduction of measures supporting both local businesses as well as small and medium-sized enterprises. Primarily, contracting authorities will be able to reserve contracts for these businesses and will be obligated to consider them more often throughout the procurement process.
An enhancement in transparency will allow SMEs and local businesses to bid more successfully in the process.
Promoting national priority outcomes
A large focus of the Act concerns the promotion of national priority outcomes, which include the creation of new jobs, new skills, tackling of climate change, and the reduction of waste.
With public sector buyers now legally obliged to award contracts based on Most Advantageous Tender, broader community benefits can now be considered.
Significance of transparency
The importance of transparency has been highlighted throughout the Act, with significant change aimed at ensuring a better value for taxpayer money.
Public authorities will now need to set up and publish 3 key performance indicators (KPIs) for any contracts that exceed £5 million. These KPIs will help track supplier performance throughout the contract.
Who does the Procurement Act 2023 impact?
When it comes into effect, the impact of the Procurement Act 2023 be felt across the UK for various stakeholders.
- Public sector organisations must familiarise themselves with the new framework, update policies, and invest in training staff to ensure compliance.
- SMEs will be presented with new opportunities, a simplifying of the registration processes, and promotion of fair competition.
- Suppliers should align their bids with the Act’s focus on social value and innovation.
Introduction of a Central Digital Platform
Alongside the Procurement Act 2023 coming into effect is the introduction of a new Central Digital Platform. This is a single online platform that will allow suppliers to register their business details, and for private sector bodies to publish notices and documents.
The goal of the platform is to make it easier to find and bid for contracts, as well as:
- Improve transparency
- Reduce duplication
- Improve data quality
The new features and functionality of this will be built into the existing Find a Tender service portal as of 24 February 2025. You will, however, need to re-register and enter your organisation information.