On 24 February 2025 the ‘new’ Procurement Act will result in changes to the way public projects are procured.
The Act had a false start in 2024 when in September the government deferred the planned commencement date from September so that that they could work on a National Procurement Policy Statement (NPPS). As well as being go-live date, February also saw the launch of the new NPPS.
It is a “new” act coming into force, but given the Act dates from 2023 and the industry is gearing up for a second time, it is worthwhile celebrating some of the (possibly forgotten) improvements to public procurement that will result. The Act could have gone further and it is also worth exploring where project teams should move to with best practice “beyond compliance”.
Some valued changes that are worth celebrating include:
- MEAT to MAT: Signalling a change from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT) is an important moment in signalling that value should be the default selection metric and not cost. However the current regime of Public Contracts Regulations permit social and environmental selection criteria in a best “price-quality” ratio approach. Whilst it may be window dressing, it is a important statement of intent.
- SMEs: The Act places small and medium enterprises more centrally in public procurement. This is manifested in simpler bidding procedures, reducing barriers to entry (eg removing pass / fail questions if they can satisfactorily be demonstrated on contract award) and consideration of breaking contracts into smaller lots.
- Transparency: The Act requires the publishing of pipeline notices and transparency on the performance of suppliers through the use of KPIs. Pipeline notice will result in better procurement outcomes, with the supply chain able to plan for and give the best attention to key tender opportunities, make investment decisions and make other business critical decisions. Meanwhile a focus on KPIs will keep everyone focused on delivering better outcomes for clients.
When the Procurement Act gained it’s Royal Assent many saw missed opportunities. Absence from legislation does not prevent adoption of best practices – here are a few to consider.
- Project Bank Accounts (PBAs): Whilst the Act (along with Public Procurement Notice 015) includes provisions for prompt payments and reporting, it stopped short of mandating PBAs. During its passage through parliament, there was a proposed amendment to the bill to mandate their use, but this was ultimately defeated. The Construction Playbook states they are to be used unless there are compelling reasons not to.
- Net Zero Carbon (NZC): The Act does not prescribe an approach to NZC, which is no surprise given the raft of other environmental legislation. There is, of course, the also new National Procurement Policy Statement that identifies how procurement can support the NZC mission as well as other Public Procurement Notes that suggest and mandate approaches. But NZC is so clearly a global challenge that it feels inopportune that public procurement should not have gone further with some sort of mandatory reporting. Its absence shines a light on the complexity of reporting and global standards.
- Simplification: In an industry that is resource constrained, the Act could have gone further in simplification of process. There is, of course, a balance here – procuring better outcomes is complex and simplification of process may be mutually exclusive with that aim. Project teams can however make applying the Act as simple to navigate for suppliers as possible and the Gold Standard verification scheme for frameworks is a welcome addition to the procurement landscape.
The Procurement Act is a key milestone in public procurement, but it should not be considered the end of a journey. Going further and embracing best practice beyond mere compliance is something to which we can all aspire.
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