How will UK Procurement Act help SMEs?

After becoming law in the UK, how will the new Procurement Act helps SMEs secure more public sector business?

New procurement rules have become law in the UK, following the Royal Assent of the Procurement Act.   The Act establishes a new public procurement regime following the UK’s exit from the EU, and it is intended to deliver a simpler, more effective public sector procurement framework, and help small and medium-sized enterprises (SMEs) secure a greater share of approximately £300bn of expenditure per year. The new rules will also try and protect against national security risks in public contracts.

Help for SMEs in UK public sector procurement contracts

The Act places a requirement on contracting authorities to assess the particular barriers facing SMEs throughout the entire procurement lifecycle, and to consider what can be done to overcome them.  

For example, in the area of insurance, procurement processes can unfairly penalise businesses that lack the resources of larger suppliers. The Act makes states contracting authorities must accept evidence that required insurance cover will be in place when a contract is awarded, rather than at the point of bidding. This will save all businesses, including SMEs, from having to incur unnecessary costs upfront.

“This Act is all about supporting British business using the opportunity of Brexit, as we change the way government works so it delivers better for people across the country,” said Parliamentary Secretary for the Cabinet Office Alex Burghart 

“In particular, we draw on the new freedoms available to us by leaving the European Union to embrace and best support our small and medium sized businesses.”

Alex Burghart MP Parliamentary Secretary for the Cabinet Office (Credit: GOV.UK)

National security protection through procurement

Significant new  powers will enable high-risk suppliers to be put on a public debarment list and be prevented from bidding for some categories of goods or services, such as areas related to defence and national security, while allowing them to continue to bid for contracts in non-sensitive areas. 

“We have taken the long-term decisions that will increase our powers to protect our security in our supply chains and procurement,” said Minister for the Cabinet Office Jeremy Quin

This has included radical steps such as creating a National Security Unit for Procurement and giving Ministers the power to prevent suppliers from bidding for certain products where there is a risk to national security; it will deliver lasting change which protects the UK for generations to come.”

The Rt Hon Jeremy Quin MP, Paymaster General and Minister for the Cabinet Office (Credit: GOV.UK)

The UK Government is also set to publish a timeline for the removal of surveillance equipment produced by companies subject to China’s National Intelligence Law from central government sensitive sites. Government will also produce an annual written report to Parliament detailing progress on this commitment.

“These new rules will help grow the economy and deliver better and simpler public sector procurement,” said Cabinet Office Minister Baroness Neville-Rolfe.

“I am particularly pleased to help small and medium sized businesses secure a greater share of nearly £300 billion worth of government contracts.”

Cabinet Office Minister Baroness Neville-Rolfe (Credit: Parliament.uk)

The changes are expected to come into force once secondary legislation is laid and after a six-month implementation period.

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