UK Procurement Act: Opening up new Opportunities for SMBs

As the UK’s public procurement prepares for a transformation with the introduction of The Procurement Act 2023, that will reshape how organisations manage their workforce and engage in public procurement. 

The UK Procurement Act presents both challenges and opportunities for businesses across the country.

"These new laws reflect a growing emphasis on worker rights and transparent business practices," says Chris Hughes, VP for EMEA, Legal & International Compliance at Magnit.

"Organisations that proactively adapt to these changes will not only ensure compliance but also position themselves as employers of choice in an increasingly competitive labour market."

Magnit is an Integrated Workforce Management (IWM) platform provider, enabling companies to optimise talent and diversity goals while achieving operational and financial success. With Magnit, companies can adapt quickly to the evolution of work to grow their extended workforce with greater agility, transparency and speed.

Over 700 brands rely on Magnit, including Dayforce, Netflix and Toyota.

UK Procurement Act

Coming into effect in October 2024, this act aims to make the function of public procurement more flexible, strategic and transparent.

The new legislation has been in the works for several years following the UK's decision to leave the European Union in 2016.

However, the Parliamentary Bill finally received Royal Assent in October 2023.

Procurement Magazine published a look at how Atamis, a leading UK procurement software provider focused on increasing efficiencies throughout the strategic sourcing cycle, is helping companies prepare for the Act to come into effect.

This Act requires contracting authorities to consider small to medium-sized enterprises that could have typically faced barriers to participation.

It mandates public notices on tenders for procurement of services and aims to deliver value for money, maximise public benefit, share information to allow suppliers and others to use policies and decisions – while ensuring integrity in the procurement process. The formation of a brand new government notice portal will be used for all tenders.

As well as introducing a requirement for clear key performance indicators (KPIs) and the publication of KPI performance, the specifics of enforcement, tracking and measurement are yet to be clarified.

A significant shift

"The Procurement Act represents a significant shift in how public contracts are awarded and managed," Chris explains.

"It opens up new opportunities for small and medium-sized enterprises while demanding greater accountability from all parties involved in public procurement."

For these new laws, it also brings new compliance challenges, while also offering opportunities for organisations to improve their workforce management and procurement strategies.

Through embracing these changes, companies can enhance their reputation, improve worker satisfaction and potentially obtain a competitive edge in both the labour market and public sector contracts.

The Procurement Act 2023 will fundamentally transform UK public procurement regulations. This comprehensive legislation will consolidate existing laws into a single, cohesive framework, simplifying the procurement process for businesses and government entities alike.

Key changes

The Act will supersede current EU-derived rules, including the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011.

Streamlined procedures: The Act introduces two main procedures - the existing Open Procedure and the new Competitive Flexible Procedure, allowing for more tailored procurement processes.

Broader value considerations: The Act shifts focus from "Most Economically Advantageous Tender" (MEAT) to "Most Advantageous Tender" (MAT), requiring authorities to consider social, economic and environmental factors in their procurement decisions.

Enhanced transparency: A central digital platform will be established to facilitate supplier registration and access to opportunities, promoting greater transparency and efficiency in the procurement process.

SME participation: The Act aims to encourage participation from small and medium-sized enterprises by simplifying requirements and reducing barriers to entry.

These changes reflect a post-Brexit approach to procurement, emphasising national priorities while striving for a more efficient, transparent and inclusive system.

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