Constructionline Asks: Are We Ready for the Procurement Act?

The Procurement Act is set to be enforced on 24 February 2025 - a UK government reform aimed at improving and streamlining public sector procurement. 

Ahead of its implementation, Constructionline - a provider of compliance and pre-qualification services for the construction industry - has conducted a survey exploring the levels of preparedness among the construction industry for the new Procurement Act.

The survey finds that, even though the Act will help drive transparency and efficiency, many construction firms seem underprepared, with only 17% of respondents being ‘fully aware’ of the legislation.

Nick Smith, head of sustainability and regulation at Constructionline says: “This research makes it clear that while our industry understands the purpose of the new Act, many are still unsure about how to embed it within their organisations. 

“Our platform is designed specifically to help members navigate these changes and ensure compliance, which is why we have produced the guide. 

“The new Procurement Act represents a significant overhaul of how public sector bodies will procure all goods, services and work and will come into effect on 24 February 2025 so the time to act is right now.”

What is the Procurement Act?

The Procurement Act 2023 will integrate transparency across the commercial lifestyle to help enhance overall procurement processes.

It will aim to help all suppliers and simplify procurement processes for the public sector. 

The Act will improve Public Procurement by meeting the needs and improving flexibility and commercial freedom for Contracting Authorities.

Heidi Parker, Senior Procurement Consultant, TLT, explains: “The new Procurement Act 2023 is an exciting opportunity for construction suppliers, either directly or through the supply chain, to get involved in and collaborate with contracting authorities during the design, procurement and management of public sector construction contracts. 

"The new flexibilities in the PA23 will allow Contracting Authorities to design their procurements to suit the form of construction contract being used, encourage SME participation, promote innovation and build in practical and effective methods of contract management (using KPIs and other reporting obligations).

"This will support them in delivering not only their direct purpose, but also value for money and additional public benefits for their local communities.”

Constructionline indicates that success under the Procurement Act will derive from organisations creating collaborative and strong relationships across the supply chain.

The Procurement Act will focus on mutual benefit relationships by encouraging open communication and early engagement. 

Constructionline points to three key drivers that will alter relationships between subcontractors and main contractors - total transparency, visionary value and early engagement.

These will ensure organisations can embrace values of shared responsibility and trusted collaboration.

The response across the construction industry

Constructionline highlights the varying levels of preparedness for the arrival of the Procurement Act, with just 17% of respondents being ‘fully aware’ of the Act’s entry. 

It states that only 37% of the construction industry is unaware of the Act’s February 2025 arrival date and 73% are either on the fence or concerned about the effects of the new Procurement Act.

This divide in awareness and understanding of how to integrate it into their procurement processes suggests potential disruption for those organisations that fail to understand its effects quickly.

Constructionline indicates that there seems to be a positive outlook on the long-term impact of the Act, with 51% of respondents believing the act will bring greater transparency and accountability to businesses and 16% believing it will deliver better value for money.

The survey highlights that there is a significant divide between the industry’s readiness for the Act and its intended benefits, emphasising the need for more support and training to help effectively understand the future of the procurement landscape.

What impact will the Procurement Act have?

The Procurement Act is set to redefine several industries and introduce a new era of public spending.

Constructionline states that 10% of firms expect increased innovation as a result of the shift proposed from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT). This will challenge traditional procurement practices and make suppliers showcase broader value - with innovation, sustainability and social impact now considered.

The Act will introduce clearer procurement processes and require better reporting on spending to create a fairer procurement system and ensure sustainability, social value and ethical practices are focused on.

Constructionline continues to emphasise the lack of preparedness with the Procurement Act, with 70% of respondents remaining uncertain about how the Act will affect their business and 69% of firms still failing to integrate the new rules into their tendering processes.

This highlights how companies that proactively prepare for these new rules will gain a better competitive advantage as the procurement industry continues to shift.

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