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Overview of the Act from the Cabinet Office

The Procurement Act will improve the current procurement processes in the public sector. Offering both a simpler and more flexible approach to procuring goods, works and services.

The aim of the Procurement Act is to change the 4 sets of regulations used currently into one single regulation framework so we can:

  • Create a simpler and more flexible commercial system that best meets our country’s needs.
  • Remain compliant with international obligations.
  • Create more opportunities for small businesses and social enterprises to compete for contracts.
  • Embed transparency throughout the commercial lifecycle to scrutinise taxpayer’s money more thoroughly.

While the Act comes into effect in October 2024, many crucial details, particularly surrounding secondary legislation, and specific guidance are still under development. 

What the Cabinet Office is saying to procurement leaders

The Cabinet Office will be rolling out learning and development programmes for procurement and commercial teams. This includes contract managers, finance teams, service commissioners, legal advisers, and reporting teams. The Cabinet Office is asking all organisations to treat the Procurement Act 2023 as an organisational change programme and therefore consider:

  • Future pipelines of work in the next 12 months that would benefit from new flexibilities.
  • Review commercial strategies including planning, governance assurance and resources to enable the implementation of the new regime.
  • Consider who will attend funded training and work on the operational roll out.
  • Share the aims of reform widely with senior stakeholders and change makers.
  • Help communicate the changes with suppliers and encourage the market to embrace the Act.

The Cabinet Office wants to see all buying teams have a named individual in their organisation to be responsible for co-ordinating and championing the change.

There is a drive that buyers should be conducting early engagement with suppliers as a matter of policy. The Cabinet Office sees the use of the new flexibilities in procurement as fundamental to procurement reform and that commercial teams need to invest time in learning and development in order to get the most out of the transformation.

What the Cabinet Office is saying to suppliers

The Cabinet Office sees the new Procurement Act as a benefit to suppliers of all sizes, particularly start-ups, scale ups and small businesses.

It will create a single central digital platform for suppliers to register and store their details, with the ability for these details to be used for multiple bids. Through this platform, suppliers will also be able to see all opportunities in one place.

Commercial frameworks will be more flexible, so prospective suppliers are not shut out for long periods of time. This is just one of the methods the Act will remove bureaucratic barriers and level the playing field for smaller businesses, so that they can compete for more contracts.

The Act is seen as important to driving innovation, deliver better outcomes and embed transparency through the commercial lifecycle.

  • Summer 2023

    Consultation on secondary legislation required to implement the Procurement Bill.

  • Autumn 2023

    Procurement Bill receives Royal Ascent and becomes the Procurement Act 2023

  • November 2023

    Government ‘Knowledge Drops’ launched – on-demand video resources providing an overview of the changes in the act.

  • March 2024

    Secondary legislation finalised and laid before parliament.

    Government advanced course of ‘Deep Dives’ launched – comprises a 3-Day virtual course led by subject matter experts.

  • May 2024

    Government launches Communities for Practice, to provide a system of collective critical inquiry and reflection into the regime changes.

  • October 2024

    Procurement Act 2023 comes into force, potentially in successive stages.

What’s next?

  • Lay the regulations to be made under the Act.
  • Launch E-learning modules
  • Publish technical guidance
  • Introduce communities of practice
  • Publish the National Procurement Policy Statement
  • Central digital platform goes live
  • Commence the Procurement Act
Figure 1: the Procurement Act 2023 as the foundation of what is next 

Figure 1: the Procurement Act 2023 as the foundation of what is next

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How is the learning and development being delivered?

The Cabinet Office has developed a portfolio of products aimed at different audiences. These include:

  • Knowledge drops
  • E-learning
  • Advanced course deep dives
  • Communities of practice.

Interestingly, most of the learning is focused at the buyer side, with a few Knowledge Drops aimed at suppliers. Therefore, this section provides an awareness to bidders of the training procurement teams will be going through, rather than an opportunity for bidders to join the training.

What the Cabinet Office is saying to procurement leaders

The Cabinet Office will be rolling out learning and development programmes for procurement and commercial teams. This includes contract managers, finance teams, service commissioners, legal advisers, and reporting teams. The Cabinet Office is asking all organisations to treat the Procurement Act 2023 as an organisational change programme and therefore consider:

  • Future pipelines of work in the next 12 months that would benefit from new flexibilities.
  • Review commercial strategies including planning, governance assurance and resources to enable the implementation of the new regime.
  • Consider who will attend funded training and work on the operational roll out.
  • Share the aims of reform widely with senior stakeholders and change makers.
  • Help communicate the changes with suppliers and encourage the market to embrace the Act.

The Cabinet Office wants to see all buying teams have a named individual in their organisation to be responsible for co-ordinating and championing the change.

There is a drive that buyers should be conducting early engagement with suppliers as a matter of policy. The Cabinet Office sees the use of the new flexibilities in procurement as fundamental to procurement reform and that commercial teams need to invest time in learning and development in order to get the most out of the transformation.

What the Cabinet Office is saying to suppliers

The Cabinet Office sees the new Procurement Act as a benefit to suppliers of all sizes, particularly start-ups, scale ups and small businesses.

It will create a single central digital platform for suppliers to register and store their details, with the ability for these details to be used for multiple bids. Through this platform, suppliers will also be able to see all opportunities in one place.

Commercial frameworks will be more flexible, so prospective suppliers are not shut out for long periods of time. This is just one of the methods the Act will remove bureaucratic barriers and level the playing field for smaller businesses, so that they can compete for more contracts.

The Act is seen as important to driving innovation, deliver better outcomes and embed transparency through the commercial lifecycle.

  • Knowledge Drops

    These are designed for everybody as an on-demand resource, providing an overview of all the changes in the legislation. There are separate Knowledge Drops for contracting authorities, suppliers, and SMEs. Suppliers will gain an understanding of what the new regulations are and how it will influence how they do business with the public sector.

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  • Communities of practice

    Comprising of skilled and expert practitioners from contracting authorities, these communities provide a system of collective critical inquiry and reflection into the regime changes. Communities of practice will be ongoing, with events determined by local managers, teams, and organisations. The community of practice will build a library of best practice, including process maps, policy templates, FAQs, and case studies.

  • E-learning

    Designed for the skilled practitioner within a contracting authority, these are self-guided modules for all procurement and commercial staff, providing a comprehensive grounding of the new regime. Modules include:

    • Scope, definitions, and general principles
    • Transparency
    • Procurement procedures
    • Competitive flexible procedure
    • Frameworks and dynamic markets
    • Supplier selection
    • Assessment and award of contracts
    • Remedies, procurement oversight and the debarment list
    • Contract governance.
  • Advanced course of deep dives

    For the expert practitioner within a contracting authority, this is a 3-day interactive course, designed to create superusers within the procurement community. This course builds on the e-learning and provides deep dives on:

    • Designing the competitive process
    • Setting award criteria
    • Assessment and award
    • Frameworks and dynamic markets
    • Contract governance.

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Knowledge Drops have landed

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Pre-market engagement

Pre-market engagements are an important part of the procurement process for enabling innovation and to allow bidders access to influence the solution. Buyers need to provide the opportunity to listen to bidders and understand any barriers to the procurement to get the best result.

Buyers will benefit from engagement opportunities to understand potential cost savings beyond the should cost assessment and determine what good looks like in what they are buying.

It is recognised that pre-market engagements can be limited with companies not wanting to share their position or IP in a room full of competitors. The Procurement Act is designed to address this risk with a more flexible approach.

All engagement sessions should provide feedback to the bidders – summarising the engagement in writing and be provided alongside the ITT so that those who could not attend are not left behind.

Pre-market engagements should also be proportionate to the procurement.

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Social Value and the Procurement Act

Whilst the Act doesn’t mention social value directly, it is an intrinsic part of the reform. The Act, through MAT evaluation and driving accountability lends itself to a more innovative social value, with more flexibility.

The Act encourages pre-market engagement – which is a fundamental opportunity to understanding the art of the possible in social value, relevant to the opportunity.

The Cabinet Office encourage bidders to raise with the relevant procurement office if you get social value questions that are not relevant or proportionate. Additionally, please share these experiences with the APMP UK Social Value Group

Guidance for suppliers on Social Value in the Procurement Act

  • Develop a Social Value Strategy.
  • Focus on how you integrate social value into your day-to-day business rather than as an ‘extra add on’ to specific projects.
  • Take the time to understand local needs and engage with your buyers.
  • Measure what you are already doing and engage your own teams.
  • Take the time to understand the needs of your buyers so you can tailor your responses.
  • Think about your own supply chain – how can you behave like a public buyer.

Why is Social Value important in procurement?

  • For communities

    • Employment and upskilling opportunities for local people
    • Work for local businesses and social enterprise
    • Cleaner and green spaces maintained by sustainable practices.
    • Healthier, safer, and more empowered communities
    • Additional benefits only achievable through partnerships
  • For the buyer

    • Align your supply chain to your own values and priorities.
    • More value for communities meeting local needs.
    • Compliance and safety from legal challenge
    • Social Value data proving the benefits delivered to the community.
    • Better collaboration with suppliers.

Evaluating social value in tenders

Procurement teams will need to agree internally the social value (%) weighting as well as the sub weighting (qualitative / quantitative) applied across your tenders. There is the potential for buyers to opt to have a standard weighting (i.e., 10% applied across tenders with a 50/50 (5%) split across both elements or to decide this on a tender-by-tender basis.

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Competitive Flexible Procedure

What is the competitive flexible procedure?

  • Any competitive procedure you consider appropriate to award the public contract.
  • Buyers must explain in the tender notice the process they intend to use to run the procedure.
    • This could be as simple as running a process akin to a restricted, i.e., a simple two stage process with no scope for negotiation.
    • Or they could tailor the process to include negotiation or dialogue.
    • They could invite tenders from all and then invite the top scores to negotiate and determine the MAT following best and final tenders.
  • There is lots of potential, and it gives buyers the freedom to use their commercial skills to get the best from the market.

Why two competitive tender procedures?

  • The Procurement Act consolidates a number of currently separate regulations; the new rules needed to be flexible enough to cover them all.
  • The Cabinet Office also wanted to give contracting authorities flexibility to use their commercial skills to get the best for their procurement.
  • The open remains as a standalone procedure.
  • The competitive flexible is a balance – there is freedom, but there remains scope to run a straightforward procedure.

Example process without a separate participation stage

Example competitive flexible with limited negotiation

Tools or processes buyers could use in a competitive flexible procedure.

Competitive flexible that is a simple two stage tendering procedure

  1. Preliminary market engagement, develop procurement strategy, prepare tender notice, and associated tender documents.
  2. Publish tender notice and any associated tender documents inviting requests to participate.
  3. Following the participation period, receive requests to participate, assess conditions of participation, exclusions and any other objective criteria set to limit suppliers.
  4. Inform suppliers who will not be invited to tender.
  5. Invite those who have made it through the participation stage to tender by issuing the invitation to tender.
  6. Following the tendering period, and once you have received the tenders, evaluate tenders against the award criteria and determine the most advantageous tender (MAT)
  7. Inform suppliers of the outcome and issue assessment summaries
  8. Publish the contract award notice (triggering the mandatory or voluntary standstill period where appropriate, with a minimum of 8 working days)
  9. Publish the contract details notice and a copy of the contract (if required).

How?

Use it responsibly:

  • Need to be useful – but don’t run away with IP and USPs: no bidder likes to see their good ideas replayed verbatim as a contract requirement.
  • Don’t just pay it lip service: bidders won’t engage fully in the process if they cannot see any impact.
  • Don’t create a problem for potential bidders:
  • Must treat the supplier as an excluded supplier if the PME has put the supplier at an unfair advantage / advantage cannot be avoided (see section 16(4) and (5))
  • Don’t rush it: need time to incorporate results into the design or substance of the competition.

Different methods

  • Surveys, questionnaires, B2B meetings, webinars, conferences, presentations, interviews, demonstrations, site visits etc.
  • Can be quite arms-length or involved.
  • Keep a record (see section 98)
  • Consider feeding back and publish results- to avoid an advantage being conferred.

When?

  • Section 16(1): BEFORE publishing a tender notice (can be after the planned procurement notice – see section 15).
  • Built into the procurement programme.
  • Must publish a ‘preliminary market engagement notice if carrying out PME (s 17(1))
  • Before tender notice OR provide reasons why you didn’t PME in the tender notice (s 17(1)(b))

When?

Section 16(1) Procurement Act 2023:

  • Develop the requirements and approach to the procurement.
  • Designing the procedure (including conditions of participation / award criteria)
  • Preparing the tender notice and tender documents
  • Identifying potential suppliers
  • Identifying likely contractual terms
  • Building capacity among suppliers in relation to the contract
  • Can help:
    • Openly and transparently discuss the procurement and get a better understanding of the issues.
    • Design of the competition and timing: is it going to work for your bidders?
    • Warm up the marketplace: get them excited in the opportunity.
    • Help articulate the requirement – how much is it going to cost / what are the barriers to overcome.
    • Opportunities for innovation, social value, net zero aspects

This flowchart demonstrates the notices and other information that you may publish throughout the end-to-end procurement lifecycle (depending on the procurement procedure followed, the nature of the contract and I or the contracting authority). This is for illustrative purposes only.

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Knowledge Drops have landed

Overview

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