Did you know? Advice Cloud are experts in breaking down complex public procurement topics into easy-to-understand, practical advice for the supplier market who need to maintain effective strategies across marketing, sales and bidding with the public sector.
So, here’s our take on how the new Procurement Act will impact your day-to-day business, your approach to bidding, and some tips on how you can keep your go to market strategy as effective as it can be.
When will the Procurement Act become law?
The Procurement Act 2023 was made law on 27th October 2023, and is, in simple terms, the biggest change to UK public procurement since 2015. The new laws are expected to take effect from October 2024, after the creation of all the secondary legislation is complete and a following 6 month period to prepare for the new regime.
So, really you could delay learning about this until next year if you wish. We won’t judge you! However, it’s best to get to grips with it all early to avoid that last minute scramble.
What is actually going to change for suppliers?
For those who like to be prepared – or maybe you just find public procurement a fascinating subject like we do – there are a few key changes to be aware of…
Your performance, for the world to see
For the first time ever, the requirement for transparency is going to extend to the management of awarded contracts – the next step in the cycle, from intention to procure, market engagement, sourcing, evaluation and award. This means that buyers will need to publish notices to Contracts Finder (or equivalent) whenever a contract is modified, for example, an increase in total contract value.
For contracts over £5m, which brings a huge amount of activity in-scope, even for SMEs, suppliers will be held to at least 3 KPIs that will be measured and reported on in the public domain.
This obviously gives your competitors, and your prospects, more information about what you’ve sold, how you’ve delivered it, and if you’ve exceeded initial budgets (though there can be various reasons for this). There is reputational risk if you’re seen to be under-performing and it exposes insights that the more savvy suppliers can use when they approach your buyer at contract renewal stage – “we can do better, for less.” In the worst-case scenarios, poor performance could even land you on a debarment list.
We recommend integrating these new sources of information into your bid qualification and capture planning processes. Or, if you don’t have those processes – even more reason to start creating them! We also recommend looking at what KPIs you are currently able to measure and report on; are you performing highly or is work needed? What other KPIs could you measure?
With the introduction of a public debarment list, suppliers who have committed an ‘excludable offence’, will be prevented from bidding for future work. The length of time of the ban will be decided by government and can be challenged by suppliers in court. Excludable offences will include what we currently know as mandatory exclusion grounds, for example, bribery, corruption, conspiracy, and fraud. Persons of Significant Control, parent companies, consortia and subcontractors will also be tested against exclusion grounds. Suppliers will be given the opportunity rectify and replace subcontractors who may be excluded.
For the first time, suppliers who perform badly on contracts and don’t rectify the issues, will also be at risk of exclusion from future procurements, by being added to this list.
If this is of a concern at all, we recommend looking at your issue resolution processes – what communication channels, response times, escalation processes, and service credits can you put in place to ensure you’re able to respond quickly and effectively to issues.
We’re going meatless.
Buyers will soon assess bids to determine the “Most Advantageous Tender” (MAT) rather than “Most Economically Advantageous Tender” (MEAT). This will broaden the scope of what might be considered value for money.
This could be a significant change as we consider the evaluation of innovation, which isn’t always cheap in the short-term, and social value, which can be difficult to quantify in financial terms. It could mean we see fewer tenders with high weightings on price, and more on the technical, social and cultural aspects that add value to the organisation and its users.
We always recommend you have a good understanding of your organisation’s social value strategy, which should have leadership buy-in and include your goals, initiatives, measurement and reporting approach. Now more than ever the social, environmental and economic advantages you could deliver – and remember, it’s quality not quantity – may win you the bid.
New routes to market
The framework landscape may begin to change quite significantly. We’ll see the creation of new 8-year ‘open frameworks’, which will re-open to new suppliers every so often, rather than being completely re-run. While this saves existing suppliers the effort of re-applying, it also means more competition entering these frameworks, which previously have been closed to new suppliers for up to 4 years. This is good news in many ways – but suppliers listed on frameworks and successfully bidding, will want to pay extra attention to the new suppliers entering the fold each time.
We’ll also begin to see ‘dynamic markets’, which are similar to the Dynamic Purchasing Systems that we have now, except the allowed scope now includes complex services, rather than just commodity goods and services. In these dynamic markets, suppliers can get listed at any time and usually with a 2-week lead time, meaning they can often react quickly to early market engagement sessions and position themselves to get listed in time to bid. This gives Buyers great flexibility to engage a wide market, without the constraints that frameworks can pose.
As October 2024 is a way off yet, we recommend paying close attention to the frameworks that are being re-let in the meantime, on the current regime. These will of course follow today’s rules, and potentially closed to new Suppliers up to 2029 (2025+4). Some of these frameworks are well-established and high-value, meaning it’s a good chance to secure one of the limited spaces on what will soon be ‘old-style’ frameworks. See our guide to 2024 frameworks here.