On 24 February, the Procurement Act 2023 finally came into force, three months later than originally intended and over four years since the changes were first mooted. The aim of the Act, according to the Government, is to streamline procurement and make it easier for small businesses win work with contracting authorities in the public sector.
As an SME, Thermal Road Repairs welcomes the intent of the Act. For companies like us, the opportunity to contract directly with local authorities and other public sector bodies will give us the opportunity to deliver more value for money, using local people and local supply chains.
The idea of submitting key bidding information only once - through the upgraded ‘Find a Tender’ portal - is also welcome. For small companies, preparing tenders requires a significant proportion of the senior management team’s resource, so reducing that demand could help improve the efficiency and productivity of the business.
We also welcome the greater focus that the new Act gives to delivering social value and reducing carbon emissions through public sector contracts. Guidance on this comes through the Procurement Policy Notes (PPNs) that are linked to the Procurement Act.
Some of our customers are already doing this. For instance, Manchester City Council’s Highways team puts a higher weighting on both social and environmental issues in its tender assessments, which we believe has helped us to win contracts with them. The new Act should make it easier for other local authorities to do the same.
Whether or not the new Procurement Act has streamlined the procurement process as intended, is up for discussion. Construction lawyers seem to think it hasn’t.
The Act replaces four previous pieces of legislation: the Public Contracts Regulations 2015 (PCR), the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011. However, there is a lot in the new legislation for contracting authorities, contractors – and construction lawyers - to get their heads round, with reams of guidance notes attached to the Act and more to come.
Another core goal of the Act is to bring greater transparency to the procurement process. Changes such as the requirement for authorities spending more than £100m a year to publish a pipeline notice listing all contracts over £2m will help companies like ours with forward planning and investment decisions.
However, the cost of transparency for local and other contracting authorities seems to add up to huge amounts of additional work. The Act gives authorities the flexibility to tailor their procurement processes to local needs and markets – but then they must design these new procedures, which will be no mean feat. Contractors working for multiple authorities will have to go through every contract with a fine-tooth comb, as they could potentially all be different.
The Act also requires much more contract administration, with many more notices to be published before contract award and then throughout the life of a contract, reporting on the performance of contractors against the goals of a contract. This is a huge change for contracting authorities’ procurement teams whose involvement won’t now stop once a contract is awarded.
There are concerns amongst contractors about how the ongoing reporting of their performance will work out. The Act says that the contracting authorities must report against key performance indicators (KPIs) set out in the contract. Poor performance could lead to a contract being terminated and the contractor being excluded from future tenders and potentially from tenders with other contracting authorities.
As an SME, we would like to think that contracts and KPIs will be set up with local suppliers and markets in mind, so that we do have a greater opportunity to compete with national suppliers and to perform as expected. Clearly, there is a lot of work for everyone to do as we move into this new era of public sector procurement, and there will certainly be lots of work for those construction lawyers. However, we are hopeful that the changes will help to deliver more value for the public purse and for local communities.
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