An introduction to the new Procurement Act 2023

What is it, and when will it commence?

Public procurement is tightly regulated to protect the public purse and ensure that suppliers are on an ‘even keel’ to tender. Post-Brexit, there has been regulatory divergence and scrutiny of public spending that has led (in part) to reform of procurement legislation in the UK. The result is the new Public Procurement Act 2023 (“the PA 2023”), which will commence on 24 February 2025. This was delayed from the original go-live date of 28 October 2024 to allow time for a new National Procurement Policy Statement (NPPS) to be produced. 

What does the PA 2023 aim to do?

The PA 2023 will govern most supply contracts with public authorities, and other similar bodies and institutions. It does not cover specific services, including healthcare services.

It comes with broader procurement objectives and principles, with the aim of creating a simpler, more flexible commercial system which supports innovation and widens the pool of tenders for public contracts.

The PA 2023 particularly focuses on contract management, with new obligations placed on authorities to report on contract performance and termination. Authorities will need to comply with the ‘procurement objectives’ when making contract management decisions and decisions related to the award process.

What changes should I be aware of?

The PA 2023 sees a number of changes to procurement law, including:

Changes in terminology: Despite following many similar concepts and rules, the PA 2023 moves away from the wording used in the EU directives in relation to procurement. Some of these changes in terminology have been deliberate, such as the removal of the word ‘Economical’ from ‘Most Advantageous Tender’ when deciding which tender to select for an award. Whilst only removing one word, this could have significant consequences, as broader factors may be considered beyond the most financially attractive offer, for example, ESG impact and job creation in local markets.

Other changes to wording are the likely consequence of localisation: adopting language that is used elsewhere in local legislation. However, the departure from well-known terminology of EU-origin may lead to difficulties in due course, particularly in the event of disputes that turn on the definition of terms without ECJ rulings to refer to. 

Awards Procedures: The PA 2023 introduces new means of procurement, allowing for greater flexibility in the tendering process by way of the “competitive procedure”, split into two routes:

(A) The ‘open procedure’: a single stage tendering process without restrictions on offerors. This procedure must be proportionate, considering the nature, complexity and cost of the contract. 

B) A new ‘flexible procedure’: taking a varying approach depending on the particular procurement. 

The ‘direct award’ procedure remains the same, and awards under an existing framework are available.

Open Framework: The PA 2023 introduces a new open framework (distinct from the similarly named “open procedure” as described above) allowing even greater flexibility and new opportunities.

Awards and Publications: For increased transparency and equality, the PA 2023 introduces a more detailed regime for reporting and giving notices, including a ‘Central Digital Platform’ for tendering parties to register and store their details, where ‘Pipeline Notices’ and other information (like contract termination notices) should be published.

What happens to contracts before 24 February 2025?

Where a contract awarded and commenced under the previous legislation is still ongoing at the time of commencement of the PA 2023, the contract will still be managed under that legislation.