Understanding the Procurement Act 2023: a guide for aspiring lawyers

Answer

The Procurement Act 2023 (the act), which received royal assent on 26 October 2023, represents a significant overhaul in the UK's public procurement landscape. Set to take full effect on 24 February 2025, this landmark legislation aims to modernise and streamline the procurement process, moving away from the previous EU-derived regulations. Understanding the purposes and aims of this act is crucial as it’ll shape the future of public procurement in the UK (note Scotland is also adopting a separate regime).

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What’s public procurement?

Public procurement is the process by which public sector organisations, such as government departments and local authorities, buy goods and services from external suppliers. Public procurement involves a wide range of purchases, from medical equipment to large-scale construction projects.

What’s the Procurement Act 2023?

The Procurement Act 2023 introduces a unified framework for public contracts, utilities, concessions, and defence and security procurement. It emphasises flexibility, transparency and value for money, aiming to create a more efficient and fair procurement system. The act is designed to ensure that public funds are utilised effectively, providing better value for money.

Key aims and purposes of the act

1. Enhancing efficiency: the act aims to create a simpler and more flexible commercial system that better meets the UK's needs, while remaining compliant with international obligations. This means streamlining processes to make them quicker and more straightforward for all parties involved. Currently, procurement is governed by multiple regimes, but under the new act these regimes are consolidated under a single legislative framework, simplifying the overall structure.
    
2. Ensuring fairness: the act aims to facilitate access to public contracts for small and medium sized enterprises (SMEs), with measures to reduce barriers in the procurement process to help SMEs better understand decisions and improve their chances of successful bids. The act will offer a new “competitive flexible” procedure, which enhances negotiations between suppliers and contracting authorities. This aims to create a level playing field where all suppliers have a fair chance to compete for public contracts, which is particularly important for promoting innovation and diversity in the supply chain.
    
3. Delivering better value for money: the act emphasises value for money, competition and objective criteria in decision making. Under the current procurement regime, contract awards are based on the “most economically advantageous tender” whereas under the new act, this moves towards awarding the “most advantageous tender”. This means bids will be evaluated not only on costs, but also on quality and sustainability. This aims to ensure that public funds are spent wisely, achieving the best possible outcomes for taxpayers.
    
4. Increasing transparency: transparency is a cornerstone of the act, for example introducing expanded requirements for publishing notices throughout the procurement lifecycle. For contracts exceeding £5 million, contracting authorities must publish at least three key performance indicators and regularly assess supplier performance against these metrics. The aim is to ensure that procurement processes are open and accountable.
    
5. Supporting social value and sustainability: the act encourages contracting authorities to consider broader community benefits, such as local job creation and reduced carbon emissions, when making procurement decisions. This aligns public procurement with broader social and environmental goals.

Importance for law students

As future legal professionals, law students may encounter public procurement in various aspects of their careers. Whether it’s advising clients on public procurement processes under the act, litigating procurement disputes where there’s concern a contracting public authority may not have complied with the act, or involvement in procurement processes within public sector organisations, a solid understanding of the Procurement Act 2023 will be useful. The act, associated regulations and guidance sets out the new groundwork for how public procurement will be conducted in the UK, making it essential for any aspiring public procurement lawyers to make themselves familiar with this new regime.

Conclusion

In conclusion, the Procurement Act 2023 is intended to be a landmark shift in the UK's approach to public procurement. By streamlining the procurement process, the act aims to deliver better value for money and will significantly impact how public contracts are awarded and managed, aiming to ensure that public funds are used more efficiently and effectively. 

Ella Kubicki is a trainee solicitor at Shoosmiths.