The Procurement Act: A summary

The Procurement Act 2023 (‘the Act’), effective from 24 February 2025, introduces significant reforms to public procurement in England, Wales, and Northern Ireland. By consolidating previous legislation into a unified framework, the Act’s three main aims are to:

1. Enhance transparency

2. Promote fair competition

3. Support small and medium-sized enterprises (‘SMEs’) in securing public contracts.

Some of the headline items to look out for are as follows:

Notices

A notable change is the range of new notices that have been introduced by the Act, including Pipeline Notices and Contract Award Notices. The aim of these notices is to ensure that decisions are open to scrutiny and that suppliers have a clear understanding of procurement activities. This increased transparency is designed to foster trust and accountability in public spending.

Reduction in lot size

The Act also mandates authorities to consider dividing large contracts into smaller lots. This approach is intended to lower barriers for SMEs, enabling them to participate more effectively in public sector projects. For the construction industry, this could mean greater opportunities for smaller firms to engage in public infrastructure and building projects, potentially leading to a more competitive market.

Standard payment terms

To address payment delays, the Act implies a 30-day payment term in all public contracts (save for certain exceptions). Authorities must settle invoices within this timeframe, promoting cash flow stability across the supply chain and helping to mitigate the risk of insolvencies.

Sanctions

Furthermore, the introduction of a public debarment list aims to uphold high standards. The list contains names of suppliers which the Minister considers “excluded” or “excludable”. Suppliers on the debarment list are barred out of tendering for public contracts.  Suppliers may be disqualified if they are found guilty of offences such as abuse of dominance or those posing national security threats. Suppliers may also be disqualified if they are in breach of contract and fail to improve performance after being given an opportunity to do so, by the contracting authority

Overall, the Procurement Act 2023 is designed to create a more transparent, competitive, and equitable environment in public procurement. This Act particularly impacts construction companies involved in delivering public buildings or projects involving public infrastructure. If you think you may be affected by the Act and require our assistance, feel free to contact our construction team who may be able to assist.

If you have any questions about the topics raised in this article, please don’t hesitate to reach out to us.

Thank you to Olivia Nichol for her input in this article.