New Procurement Act

Navigating the New Public Procurement Act: An Opportunity for SMEs
Public procurement accounts for £300 billion (a third) of all public expenditure per year in the UK, and there is now a great opportunity for Small and Medium Sized Businesses to benefit from the upcoming changes and leverage this as a growth lever for their business.
The impending changes, due Feb 2025 across the UK, mark a transformative shift as to how public sector contracts are awarded and managed. The aim of these changes is to the create a more transparent, efficient, and inclusive procurement process by design, particularly benefiting Small and Medium Sized Enterprises (SMEs).
Let's delve into the key changes and explore how SMEs can leverage these opportunities.
Key Changes to the Public Procurement Act
- From MEAT to MAT: The shift from the Most Economically Advantageous Tender (MEAT) to the Most Advantageous Tender (MAT) emphasises value over cost. This change encourages a broader evaluation of bids, considering factors such as social value, environmental impact, and local economic benefits
- Increased Transparency: The new Act mandates greater transparency throughout the procurement lifecycle. This includes publishing notices from planning stages to contract expiry making the process more open and transparent.
- Flexibility in Procedures: Contracting authorities now have the flexibility to design their own procurement procedures, rather than adhering to prescriptive methods. This allows for more innovative and tailored approaches to procurement
- Centralised Debarment List: A new central debarment list will prevent suppliers with poor performance records or those posing national security risks from bidding on public contracts
- Enhanced Feedback Mechanisms: Authorities are legally obliged to provide feedback to unsuccessful bidders, helping them understand why they didn't win and how they can improve future bids
Under the new act, Social Values is a key requirement for public sector tendering. Buyers will be assessing and selected not just on economic value but the positive social impact they bring.
Key Aspects of Social Value in Procurement:
- Community benefits: Initiatives like local job creation, apprenticeships and training programmes.
- Environmental Sustainability: Efforts to reduce emissions and promote sustainable practices.
- Social Inclusion: Promoting equality and diversity and supporting disadvantaged groups.
- Local Economy: Boosting local economy by using local suppliers.
Benefits to SMEs
- Simplified Processes: The new Act simplifies the bidding process, making it easier for SMEs to participate. Standardised templates and clearer guidelines reduce the complexity and time required to prepare bids
- Fair Competition: By increasing transparency and reducing red tape, the Act levels the playing field for SMEs. All bidders, regardless of size, have equal opportunities to compete for contracts
- Access to More Opportunities: The Act mandates that a significant portion of public contracts be set aside for SMEs. This opens up approximately £300 billion worth of government contracts to smaller businesses
- Prompt Payments: The Act introduces stricter payment terms, ensuring that SMEs receive payments within 30 days. This addresses cash flow issues that often hinder smaller businesses
- Support for Local Economies: By prioritising social value and local impact, the Act encourages contracting authorities to consider the benefits of awarding contracts to local SMEs. This supports job creation and economic growth at the community level
Practical Steps for SMEs
- Register with Procurement Portals: You’ve got to be in it to win it; SMEs should register with platforms like Crown Commercial Service; Proactis; Sell2Wales to access tender opportunities and ensure they are visible to contracting authorities.
- Align with Social Values: A key metric to enhance bid success is understanding and aligning with the social values and objectives of local councils. This includes demonstrating how your business supports community well-being and economic development.
- Leverage Feedback: Use the feedback from unsuccessful bids to refine and improve future submissions. This continuous improvement approach can significantly increase your chances of winning contracts.
- Engage in Market Engagement: Participate in market engagement activities and meet-the-buyer events to build relationships with contracting authorities and understand their procurement needs.
- Stay Informed: Keep up to date with the latest procurement regulations and best practices. This knowledge will help you navigate the procurement landscape more effectively. We recommend knowledge drops informative bite sized detail of changes and tendering requirements.
Conclusion
The changes to the Public Procurement Act represent a significant opportunity for SMEs to expand their reach and impact. By simplifying processes, enhancing transparency, and prioritising social value, the new Act creates a more inclusive and supportive environment for small businesses. SMEs that adapt to these changes and strategically position themselves can look forward to a more prosperous future in public sector procurement.
If you need assistance navigating the social values landscape or developing a carbon reduction strategy to support your business growth under the new Public Procurement Act, our team of experts at Pathway to Carbon Zero is here to help. Get in touch today be ahead of curve.