Key resources to help Main Contractors and Subcontractors in the Construction industry understand the Procurement Act (2023) and Public Sector Procurement Regulations.
It seeks to benefit suppliers of all sizes, including small businesses, start-ups and scale-ups. Aimed at improving overall procurement processes and procedures, it will embed transparency throughout the commercial lifecycle. The Procurement Act will drive greater commercial freedom and flexibility for Contracting Authorities, to help meet their exact needs whilst driving innovation and transforming Public Procurement.
Encouraging better cultural and behavioural changes, the Procurement Act aims to enhance accountability in the Construction industry by tracking subcontractors’ performance against key KPIs, proposing a more transparent approach throughout the commercial lifecycle.
The Procurement Act represents not just a change to the rulebook, but in how the rules are applied.
Key information to help Construction Main Contractors and Subcontractors understand how the Procurement Act affects them.
Senior Procurement Consultant, TLT
“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.”
If you are a Construction Main Contractor and subcontractor involved in public sector works, the Procurement Act is likely to affect you – directly and indirectly.
As part of the Government’s programme to transform public procurement, the key changes will see improved accountability, streamlined procedures and simplified bidding processes. Introducing better transparency will encourage better value in spending taxpayer money, where contracting authorities must set and publish KPIs for public contracts worth more than £5m.
The Procurement Act gives Contracting Authorities more flexibility in how they award contracts, providing greater commercial freedom to design public procurement processes that meet their exact needs and drive innovation, whereas existing ones may have been inefficient and inflexible.
Furthermore, it opens up public procurement to work with more smaller businesses: you can already find subcontractors on our platform and be part of the movement to level the playing field for smaller subcontractors as part of the Procurement Act.
Instead of getting the most economically advantageous public sector tender, it prioritises the most advantageous tender in general, where some subcontractors may be better suited, work faster and are located closer.
As a result of the Procurement Act, more Main Contractors will look to work with subcontractors who have the Common Assessment Standard, when working on construction activities over £5.337m.
To boost your chances to work on opportunities like this, you can upgrade to Constructionline Gold and demonstrate your compliance today.
Watch our short video series to help you understand the Procurement Act.
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The following public contracting authorities are excluded from the Procurement Act (2023): the Security Service, the Secret Intelligence Service and the Government Communications Headquarters.
A connected person may be an individual or entity associated with a supplier applying to a tender. Additional criteria for connected persons can be found here.
Connected persons links to its introduction of the Debarment List as part of the Procurement Act (2023), which gives Contracting Authorities grounds to exclude certain suppliers from tenders, if an offence has been committed as per Schedule 6, Part 1.
The Procurement Act (2023) comes into effect from 24th February 2025, pushed back from its planned date of 28th October 2024.
Key Performance Indicators, or KPIs, as defined within the Procurement Act are a factor or measure against a supplier’s performance of a contract that can then be assessed during the lifecycle of the contract.
These are set and published by the Contracting Authority for the supplier entering a contract: to ensure a contract can be fulfilled by the supplier, the Contracting Authority must assess the supplier’s performance against the KPIs set, followed by publishing this information in relation to the assessment.
Where public contracts exceed £5million, at least 3 KPIs must be set in respect of the contract. This may include health and safety performance, customer satisfaction rates and quality of delivery.
In terms of public authority exclusions from the Procurement Act, the Security Service, the Secret Intelligence Service and the Government Communications Headquarters will be exempt from the Procurement Act.
For supplier exemptions, the Procurement Act sees the introduction of a published Debarment List. This record will minimise supplier-related risk to public procurement and encourage appropriate standards of behaviour for public tenders. Such exemptions are also linked to any connected persons, where a supplier can become exempt due to past activities or improper behaviour, competition law infringements and national security, for example.
Further details for grounds for debarment/exclusion can be found here.
A standstill period refers to the ‘waiting period’ between a contract being awarded and then entering a contract, between the contracting authority and the supplier.
Section 51 of the Procurement Act highlights an eight-working day standstill period – ten calendar days under previous legislation – beginning with the day the contract award notice was published. It provides suppliers with the opportunity to raise any concerns, or formally challenge, the award decision before a formal contract is entered. Where exemptions apply, a voluntary standstill period may be emplaced.
Broadly, those curious about the Procurement Act can:
Yes. The Procurement Act will replace PCR 2015 (Public Contract Regulations 2015), along with Utilities Contracts Regulations 2016; Concessions Contracts Regulations 2016; and Defence and Security Public Contracts Regulations 2011.
Yes. The Procurement Bill received Royal Assent in 2023, for it to then become the Procurement Act (2023), effective from 24th February 2025.
No. Existing contracts will continue to be managed under the current regime. Contracts from 24th February 2025 will come under the Procurement Act.
Nothing. Live procurements will continue under the current regime. Procurements from 24th February 2025 will come under the Procurement Act.
* https://www.gov.uk/government/publications/the-procurement-bill-summary-guide-to-the-provisions/the-procurement-bill-a-summary-guide-to-the-provisions (reference)
** https://www.gov.uk/government/publications/the-procurement-bill-summary-guide-to-the-provisions/the-procurement-bill-a-summary-guide-to-the-provisions (reference)
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