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Procurement Act 2023 and The Future of Public Procurement

Procurement Act 2023 and The Future of Public Procurement
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The Procurement Act 2023 received Royal Assent on 26 October 2023 and will come into force on October 28th 2024, signalling a major overhaul in the UK's public procurement process. The Act aims to make the process quicker, simpler, more transparent, and better suited to meet the UK's needs. In this blog we break down what the Act includes and what it might mean for public procurement.

Key Objectives of the Procurement Act 2023

The government has outlined several key objectives for the Procurement Act 2023:

Simplification: The Act seeks to streamline the UK’s public procurement process, making it less cumbersome and easier to navigate.

Increased Transparency: Enhanced transparency throughout the procurement lifecycle ensures that all stakeholders have access to critical information.

Accessibility for Small Businesses: The Act opens up public procurement to new entrants, including small businesses, giving them a fair chance to compete for and win public contracts.

From MEAT to MAT: A Fundamental Shift

A significant change introduced by the Act is the shift from the "most economically advantageous tender" (MEAT) to the "most advantageous tender" (MAT):

Most Economically Advantageous Tender: Currently, tenders are awarded based on the best price-quality ratio, considering criteria like price, qualitative, environmental, and social aspects.

Most Advantageous Tender: Under the new regime, tenders will be awarded based on the contracting authority's requirements and the best satisfaction of the award criteria. This broader approach allows for greater consideration of factors such as sustainability, beyond just cost and quality.

The shift from MEAT to MAT aligns with the World Trade Organisation's Agreement on Government Procurement (GPA). Under the GPA, unless price is the sole criterion, contracts must be awarded to the supplier offering the "most advantageous tender"

This change means public sector procurers will have more flexibility to prioritise sustainability, social values and other important factors in their decision-making process.

Key Performance Indicators (KPIs)

For public contracts valued at over £5 million, contracting authorities must set and publish at least three KPIs. However, there are exceptions:

Contract secured via Frameworks 

Utilities contracts awarded by private utilities

Concession contracts

Light touch contracts

Additionally, if a supplier's performance under the contract cannot be appropriately assessed through KPIs, this requirement does not apply.

Monitoring and Reporting KPIs

Where a contracting authority has set KPIs under section 52(1), it must:

Assess Performance: Evaluate the supplier's performance against the established KPIs.

Publish Information
: Make public the information specified in the regulations regarding the assessment.

This assessment and publication must occur at least once every 12 months during the lifecycle of the contract and upon its termination. This ensures continuous monitoring and transparency of supplier performance, helping to maintain high standards throughout the contract duration.

Introducing the Debarment List

One of the notable features of the Procurement Act is the creation of a 'debarment list'. This public list includes suppliers who are barred from participating in public procurements due to unfit practices. The process for adding a supplier to the debarment list includes:

Investigation: Conducted by a Minister of the Crown, with the supplier given notice and the opportunity to make representations.

Decision: If exclusion grounds are established, the supplier is notified and added to the debarment list.

Publication: The findings are published in a public report, which is also provided to the supplier.

For public authorities, this list offers an additional safeguard against contracting with unsuitable suppliers. For suppliers, the debarment list poses significant commercial and reputational risks and should therefore encourage best practice.

Enhancing Transparency

To achieve world-leading transparency standards, the Act mandates the publication of notices throughout the procurement lifecycle. These notices ensure that procurement information is publicly accessible, supporting effective competition and providing the public with insight into how their money is being spent.

Preparing for the Future

As the new procurement regime approaches, it is essential for businesses who serve the public sector to stay informed and prepared. Here are some steps which you can take today:

Understand the Changes: Familiarise yourself with the new rules and how they differ from the current regime.

Enhance Transparency: Ensure your business practices align with the new transparency requirements.

Focus on Sustainability & Social Values: Embrace the broader criteria under MAT, particularly sustainability and social values, to stand out in the procurement process.

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