The Procurement Act 2023 (the "Act") will officially be commenced and in force from 24 February 2025 (delayed from an original go live date of 28 October 2024).

Transitional period

Any new procurements that are launched on or after 24 February will have to be conducted in accordance with the Act – including publishing the notices required by the Act and by the Procurement Regulations 2024, and managing any resulting contract or framework according to the requirements of the new regime (for example with regard to performance management, prompt payments, modifications and terminations).

However the relevant commencement regulations include important saving provisions for procurements, contracts and frameworks that are already underway. As a quick reminder:

  • Any procurement process that has been started (that is, the contract or concession notice has been published) before 24 February (so, realistically, by Friday 21 February) will continue to be subject to the current procurement regulations, as will any resulting contract or framework; and
  • Any contract or framework that has been entered into before 24 February will continue to be governed (for example in terms of contract management, notices and modifications) by the current procurement regulations.

Special rules apply to direct awards, the use of "VEAT" notices, and the purchase of additional requirements under existing contracts.

The effect of this will of course be that for the next few years contracting authorities and suppliers will have to grapple with parallel procurement regimes depending on whether a contract or framework in use is one that has been started under the new rules or grandfathered in under the old ones. Getting that right, for example when it comes to contract management or modifying contracts mid-term, will require careful attention.

New National Procurement Policy Statement

On 13 February the UK Government published its new National Procurement Policy Statement (NPPS), replacing that issued by the previous UK Government which was revoked when the current government took office.

Section 13(9) of the Act requires a contracting authority to "have regard" to that statement when undertaking regulated procurement activity, other than where it is procuring under a framework or dynamic market. It will not apply to English contracting authorities procuring under Welsh or Northern Irish frameworks or dynamic markets, nor to Welsh or Northern Irish contracting authorities other than when they are procuring under English frameworks or dynamic markets.

The new NPPS emphasises how public procurement can contribute to the government's overarching "missions" of boosting economic growth, cutting carbon emissions, reducing crime, breaking down barriers to opportunity, and building an NHS fit for the future. In particular contracting authorities are encouraged to:

  • Drive economic growth and strengthen supply chains including by maximising their spend with SMEs and voluntary, community and social enterprises and by ensuring that suppliers are "providing high quality jobs, safe and healthy working conditions, fair pay, opportunity and progression for workers";
  • Work collaboratively (both within the contracting authority and through early engagement with the market) to consider innovative products and services;
  • Deliver social and economic value including by working in partnership with other contracting authorities, the private sector and civil society, by emphasising environmental sustainability (including by encouraging suppliers to reduce greenhouse gas emissions and minimise waste), and by ensuring that suppliers are actively working to tackle bribery, corruption, fraud, modern slavery and human rights violations, and to comply with their tax, employment law and other legal obligations; and
  • Deliver value for money including by applying commercial best practice, by assessing value for money and service quality when considering delivery models and outsourcing decisions, and by ensuring that they have the appropriate procurement and contract management skills and capacity necessary to deliver strong commercial outcomes.

The government also published new guidance on electronic invoicing and payment and payments compliance notices on 13 February.

Scotland

As viewers of our webinars on the Act for public sector buyers and for suppliers will be aware, the Act makes provision for devolved Scottish contracting authorities (such as Scottish local authorities and NDPBs) to buy off of frameworks and dynamic markets awarded under the Act. In those circumstances devolved Scottish authorities will be subject to the Act's requirements (subject to some modifications). However, despite a statement by the UK Government in October 2024 that:

"The Scottish Government intends to make its own regulations to disapply, where appropriate, Scottish procurement legislation in order to permit devolved Scottish authorities to procure under the Act [and] to ensure that contracting authorities that are not devolved Scottish authorities can access commercial arrangements established under Scottish procurement legislation"

Such regulations are still (eagerly) awaited.

If you are a contracting authority or supplier to the public sector and want to understand more about how the changes affect you, please get in touch with Jamie Dunne or Charles Livingstone.

Contributors

Jamie Dunne

Legal Director

Charles Livingstone

Partner