Change is coming. The new Procurement Act 2023 – confusingly titled as it became law last year – comes into effect from February 2025.
It is a pivotal piece of legislation designed to streamline and standardise procurement.
The changes the act will bring about are essentially the government’s chance to unpick the country from the EU procurement legislation. Their aim is to bring in something that is more streamlined and simpler for organisations to buy and procure services.
In doing so, it will bring about major changes to the governance, systems and processes used to procure and manage supplies in the United Kingdom. Those shifts will require organisations to adapt how they work across the board, far beyond simply their procurement functions.
Key changes in the Procurement Act
The new act will bring about a host of changes, key to which will be:
New procurement principles and objectives, coupled with a focus on innovation and transparency
Increased flexibility around processes and the decision-making made by contracting authorities
Higher demand around transparency, along with an increase in the number of required published notices
A change in definitions, technology and thresholds
Increased scope covering the entire lifespan of contracts, including contract management and termination
The award criteria around contracts will change from a Most Economically Advantageous Tender (MEAT) to a Most Advantageous Tender (MAT)
But what does all that mean in practice? That is going to be a big question for organisations over the coming months, but there are some basic steps that can help you prepare for the arrival of the Procurement Act.
How organisations can prepare for the Procurement Act
Invest in training
Educating employees is vital. Workshops and training sessions will ensure all stakeholders, from procurement officers to senior management, are well-versed in the new procedures and compliance requirements.
This training should cover ethical procurement practices, documentation standards, and the use of any new technologies mandated by the act.
Overhaul your policies and procedures
Existing procurement policies and processes should be reviewed and revamped to align with the new regulations.
This may involve drafting new procurement guidelines, updating vendor selection criteria, and implementing more stringent documentation and reporting standards.
Get the technology right
Investing in the right technology is important to make sure your systems all adhere to the requirements of the new regulations.
E-procurement systems, contract management software, and compliance tracking tools can automate many aspects of the procurement process, reducing the risk of human error and ensuring consistent application of the new rules.
Continuous monitoring
Establishing a framework for continuous monitoring and improvement is vital. By carrying out audits and compliance checks, your organisation can identify and rectify any areas where they may be deviating from the rules of the new act.
What it means for procurement professionals
The new act comes with a focus on increasing the spread of public money. The knock-on effect of this is that more suppliers will have the opportunity to bid and engage with public sector organisations.
The act is taking the role of the procurement professional to the next level, making them more accountable for what they are buying and whether or not it is a success.
Fundamentally, this raises the question whether those professionals currently have the time and resources to do this extra work. What they will need to do is almost ‘get ahead of the act’, start asking now whether they have the time and resources to operate in the new world that is fast approaching. Do they know what their legal obligations will be after October 28 2024?
Currently a lot of procurement can be very reactive. In the future, the Procurement Act will mean professionals will have to be even more in tune with what is happening with any contracts they have, any changes or development happening within their organisations and likely services and products that may need to be procured.
Conclusion
While the Act is looking to streamline and simplify procurement, change often brings risks and uncertainty – change, however, also brings opportunities for improvements and better buying decisions with public money.
To take advantage of these opportunities, everyone needs to be prepared for the change and ready to act to unlock the benefits it will bring.
If you need help with all your procurement needs, contact our experts.
