GATE 2: THE PROCUREMENT ACT 2023

What has actually changed?

• No longer MEAT – consider factors beyond price
  The act also moves away from awarding solely on the ‘highest score’ based on “MEAT” - the most economical advantageous tender.  The new criteria is "Most Advantageous Tender" (MAT) - an approach that allows public bodies to consider factors beyond just price when awarding contracts. This is to highlight awarding tenders based on “National Priority Outcomes” such as innovation, social value, and environmental impact.
• Contract and tender criteria modifications
  • The Procurement Act 2023 allows public contracts and tender criteria to be modified in certain circumstances. For further guidance please refer to: Guidance: Contract Modifications (HTML) - GOV.UK
  • This gives authorities legal certainty and greater flexibility to manage challenges successfully and allows them to be agile.
  • The act highlights that the modifications need to be non-substantial. Modifications to a public contract are permitted only if they are not "substantial," meaning they cannot significantly change the scope of the contract, extend the contract term by more than 10% of the original term, or materially alter the economic balance in favour of the supplier.
  • It is advise to seek further advice if modifications are being considered.
• Contract management & key performance indicators (KPIs)
  The act focuses on contract management throughout the lifecycle of a procurement. There is a strong emphasis on supplier quality, compliance and accountability, with authorities able to exclude suppliers based on poor past performance. The new legislation also support increased transparency through mandatory publication of key performance indicators (KPIs) and the requirement to assess supplier performance against them. There is a significant focus on supplier quality, compliance and accountability. The act also enforces Supplier accountability, enabling authorities to exclude suppliers from future contracts based on poor past performance. 
• New notices & preliminary market engagement
  • PA23 introduces a pipeline notice to list planned public-sector procurements worth more than £2 million. The notices must be published in advance on a central digital platform. The act also introduces other new types of notices including planned procurement notices to give early market insight and contract change/termination notices. 
  • Until now, Preliminary Market Engagement (PME) was a “recommended” process where no formal notice was required and the Prior Information Notice (PIN) was utilised to notify the market of both future planned procurement and any pre-market engagement activity. While preliminary market engagement remains entirely optional for contracting authorities, a PME notice must be published if preliminary market engagement does occur. Furthermore, the authority must provide in the tender notice compelling reasons as to why no PME took place which then leaves the authority open to scrutiny.
  • As all notices will be published on the government's Find a Tender Service platform, this makes it easily accessible and transparent to suppliers.

Refer to Definitions: Glossary of terms for further guidance on the new notices.

• A new procedure
  The biggest change in the new legislation is the removal of the various procedures, to be replaced with two:
  1. Open Procedure 
  2. Competitive Flexible Procedure (CFP) 
     Further information on both procedures in Gate 3 Routes to Market to Scale.

This new procedure allows procurers to be innovative and design the process which can stimulate more innovation from the market. CFP allows authorities to tailor the steps and criteria to specific needs. There is the opportunity to include pre-commercial activities, R&D and scaling in one process. Ultimately, this could lead to faster, more efficient purchasing while still maintaining a competitive environment for suppliers.