This informal CPD article, ‘A Quick Guide to the New Procurement Act for Local Government’, was provided by Advanced, who are providers of software and IT services to the public, private and not for profit sectors.
What does the Act hope to achieve?
The Procurement Act 2023 brings about significant changes to how public contracting authorities carry out their procurement practices, due to come into full effect in October 2024.
The Act is meant to simplify the procurement process, merging the previous four sets of legislation into a single framework. A key aim of the Act is to bring greater levels of transparency to the procurement process, with far more information put into the public domain. The public will be able to see exactly where their money is going, with visibility on contracts and suppliers. This information will be available on a government central digital platform.
The Act hopes to bring more SMEs, micro companies, and innovators into the procurement process, boosting British business and encouraging competition. It aims to eliminate cronyism and corruption, providing a fairer platform for competing tenders.
What are the new regulations?
For all contracts above £5m, three supplier KPIs will need to form part of the contract. These KPIs will need to be declared publicly and published annually at the end of the contract notice. If not met, or the supplier does not perform to the satisfaction of the contracting authority, the relevant notices will be sent to a cabinet office department to investigate the case with the potential for disbarment.
Contracting authorities with smaller contracts will be under no obligation to publish supplier KPIs. However, by doing so, they will be carrying out best practice – the setting of supplier performance goals is likely to lead to an uplift in quality of service, while providing transparency for the public.
Local government bodies spending over £100m annually on procurement will need to publish a pipeline notice with details of contracts over £2m spanning the following 18 months. In some cases, this will require cross-department strategy; if highways and planning departments, for example, have work planned for the same area, they will need to collaborate on producing accurate details and notices.
Another change requires local authorities to publish a Below-Threshold tender notice prior to openly advertising for a contract. This applies to contracts above £30,000 (incl. VAT) for goods and services, and £214,904 for works contracts. This does not apply if the contract is not openly advertised.
A further change comes in the form of the standstill period between contract award and implementation. This ‘pause’ period will be set at 8 working days (currently 10), and is designed to give competing bodies the opportunity to challenge the tender if deemed unfair.
How can my department prepare?
The government suggests that procurement professionals should look at their procurement pipeline for the next 18 months in order to fulfil current obligations and foster a smooth transition period. Key suppliers should be notified of the forthcoming changes, and can find relevant information on the government webpage for suppliers.1
Local authorities should ensure their current information is up to date and easily accessible – where does this data currently sit in your e-procurement platform, and can this data be accessed by different employees in case of absence?
Keeping up with the demands of the Act may require a cultural shift. Procurement managers will need to be given the scope and authority to perform their jobs effectively. At a Finance and Procurement Summit 2023, guest speaker Mohamed Hans of CIPFA noted: “A key recommendation is that every contracting authority has a procurement champion, someone who sits at the top table.”
Where can I learn about updates to the Act?
In order to keep up with any changes throughout 2024, any employee connected to procurement will need to keep an eye on the government’s Knowledge Drops service2, where they’ll find an overview of the Act and practical information on how to prepare for the new rules.
We hope this article was helpful. For more information from Advanced, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.
References:
1. https://www.gov.uk/government/publications/procurement-act-2023-short-guides/the-procurement-act-2023-a-short-guide-for-suppliers-html
2. https://www.gov.uk/guidance/the-official-transforming-public-procurement-knowledge-drops#full-publication-update-history
