The Procurement Act – What you need to know

The Procurement Act comes into effect on 24^th February 2025. This revised legislation will transform how the public sector, including the social housing industry, buys goods and services. It will also bring some much anticipated updates on how suppliers can prepare and bid for contracts.

The Act originally gained royal ascent back in October 2023 and replaces the 2015 Public Contract Regulations. In short, it aims to make the UK’s public procurements processes faster, simpler and more transparent. The changes are intended to benefit prospective suppliers of all sizes, but especially small businesses, start-ups and social enterprises.

Some of the key intended benefits of the new legislation include:

Making procurement processes simpler and more flexible

Simplifying the bidding processes should make it easier to bid, negotiate and work in partnership with the public sector. A new ‘competitive flexible’ procedure (CFP) will also be implemented, which allows contracting authorities to design their own procurement process. This aims to give authorities the freedom to insert individualised aspects into the process. This can includes areas such as negotiations, dialogue or a demonstration stage.

Bureaucratic barriers for smaller businesses and Voluntary, Community and Social Enterprises (VCSEs) will also be removed. This should enable them to compete more effectively for more contracts and services. The updates also aim to strengthen provisions for faster payment throughout the supply chain. And there will be the added benefit of 30 day payment terms on a wider range of public sector contracts.

Commercial frameworks will be made more open, meaning prospective suppliers are not ‘shut out’ for long periods of time. Public bodies will also now be required to provide consistent feedback for suppliers, and bid assessments for final tenders.

Providing greater transparency

The Act also intends to make it easier to find and bid for contracts through a central digital platform. This new platform aims to enhance the existing Find a Tender service (FTS), which is currently used to post and view public sector procurement notices.

The overall aim is to streamline the registration process and keep track of business details and multiple bids. It also aims to create a more collaborate sharing platform for all members of the process. Further, it should make public procurement opportunities more visible to search, enabling set up alerts for tenders of interest.

Providing greater oversight

Finally, a new Procurement Review Unit (PRU) will be established to enhance public sector procurement practice. The PRU intends to ensure compliance with the Procurement Act and safeguard public procurement from suppliers who are deemed to pose risk. It has been designed to extend from the existing Public Procurement Review Service (PPRS), which is the current space to address concerns regarding  public procurement practices.

The PRU, which also goes live this February, consists of three services: the existing Public Procurement Review Service (PPRS), a new Procurement Compliance Service (PCS) and a new Debarment Review Service (DRS). More details about these services will be provided once the new regime is live.

Preparation is key

The Procurement Act presents some long overdue opportunities for the sector in the form of prioritising social value, improving contract management processes and opening up access to a broader range of suppliers. However, there are also some anticipated challenges. Therefore, it’s important for housing providers and suppliers to be as prepared as possible for the new legislation.

Navigating new regulations can be time consuming and complex. It can also be relatively costly, as it is important to ensure there are adequate resources allocated for procurement teams to explore, adapt to and comply with the new regime.

There will need to be a stronger focus on supplier performance monitoring, especially regarding social impact. A balance will need to be struck between enhancing this impact and the cost of implementing the changes.

The government has provided a handy  landing page on their website where all the summary documents and videos about the transition are being uploaded. It also offers learning, development and guidance on the changes, as well as the opportunity to sign up for regular updates.

Overall, the new Procurement Act presents some great opportunities for housing providers to prioritise social responsibility and improve their procurement practices. But it also requires careful planning and adaptation to navigate the new regulatory landscape effectively.