The Procurement Act 2023 came into effect on 24th February 2025. So what are the key changes for businesses supplying goods and services to state schools, Multi-Academy Trusts (MATs), local authorities, and other public sector buyers?
The procurement process plays a crucial role in ensuring that public sector projects and services are delivered efficiently, cost-effectively, and in compliance with legal frameworks. In response to calls for better governance, transparency, and efficiency, the new Procurement Act has been introduced to overhaul the previous procurement system in England, Wales and Northern Ireland.
This new Procurement Act seeks to address several challenges in procurement, and its changes have significant implications for both public sector organisations and suppliers. Here are the key changes that have been introduced:
Increased Transparency and Accountability
One of the most prominent changes in the new Procurement Act is its focus on transparency and accountability in procurement processes. The new Act requires that procurement decisions be made publicly accessible, with detailed information about contracts, bidding processes, and the evaluation criteria to be published online. This change aims to stop corruption, favouritism, and inefficiency by making procurement processes more open and traceable.
Unsuccessful bidders will now receive a detailed report to indicate how the submission compared to the winning bid.
Digital Procurement Portal
All tenders will now be published through a central procurement portal via GOV.UK Find a Tender. By digitising the procurement process, the Government can streamline procurement workflows, reduce human error, and ensure faster, more efficient decision-making. The e-procurement platform also creates a more competitive environment, as companies can easily access procurement opportunities, submit bids, and track the progress of their proposals online.
Stronger Supplier Diversity and Inclusivity through Updated Evaluation Criteria
The new Procurement Act promotes inclusivity in the procurement process by encouraging the participation of diverse suppliers, particularly small and medium-sized enterprises (SMEs), women-owned businesses, and minority-owned companies. The Act introduces provisions that prioritise bids from these groups, ensuring that they have a fair chance to compete for government contracts.
Authorities must now publish detailed evaluation criteria before tenders close, allowing suppliers to tailor bids more effectively. Contracts will be awarded to the Most Advantageous Tender (MAT) rather than the Most Economically Advantageous Tender (MEAT), which means the winning bid might not be one offering the cheapest price. This is seen as a big step towards levelling the playing field and ensuring that all businesses, regardless of size or background, have an opportunity to participate in public procurement activities.
The updated evaluation criteria also places a greater focus on public benefit factors, including economic, social, and environmental considerations.
Revised Procurement Thresholds and Procedures
The new Act revises procurement thresholds and introduces more flexible procedures for different types of procurements. Whilst high-value contracts continue to require extensive bidding and documentation, lower-value contracts can be awarded through simplified procurement procedures. This change aims to increase efficiency and reduce delays for smaller-scale projects, which are often bogged down by lengthy administrative procedures.
Large contracting authorities will now be required to publish an 18-month pipeline notice for contracts over £2 million, giving suppliers more time to prepare bids.
In addition, the introduction of framework agreements and long-term contracts allows public sector buyers to engage in strategic sourcing and build long-term relationships with suppliers. These models can lead to cost savings, better quality control, and more sustainable procurement practices.
Sustainability and Ethical Procurement
As environmental consciousness increases, the new Procurement Act emphasises sustainable and ethical procurement practices. The Act requires public sector buyers to consider the environmental and social impacts of their procurement decisions. This includes evaluating the sustainability of goods and services, promoting green technologies, and ensuring that suppliers adhere to labour and human rights standards.
The Act encourages the integration of sustainability criteria into the procurement process, such as reducing carbon emissions, promoting renewable energy sources, and ensuring that products are sourced ethically. By doing so, governments can lead by example in championing responsible sourcing, production, manufacturing and recycling practices.
Supplier Performance Reviews
The establishment of oversight bodies or Procurement Review Units (PRUs) within the Cabinet Office will monitor procurement activities and supplier performance. Poor performing suppliers could find themselves banned from future tender opportunities if they fall short on key criterias such as delivery on time in full (OTIF), unsafe or unethical business practices or security or environmental concerns.
The PRUs are tasked with ensuring compliance with the Act and investigating any allegations of malpractice. Public access to procurement data improves trust and allows stakeholders to hold the government accountable for how public funds are being spent.
The new Procurement Act provides clearer guidelines on dispute resolution and review mechanisms, which is a critical aspect of the procurement process. In cases of disagreements or allegations of unfair treatment, suppliers now have a more structured avenue to challenge decisions through independent review panels or courts. This change ensures that procurement decisions can be contested in a fair and impartial manner, helping to prevent legal disputes from delaying projects or causing reputational damage.
The introduction of the new Procurement Act represents a significant shift towards more open and competitive procurement processes. It will change the way businesses engage with public sector buyers, offering a greater opportunity for value for money, innovation, and public trust in government procurement systems. As the procurement landscape continues to evolve, schools, MATs, local authorities and suppliers can familiarise themselves with the new Procurement Act here.
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