Navigating the Procurement Act 2023: What UK Construction Companies Need to Know

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The UK construction sector is undergoing a significant shift with the implementation of the Procurement Act 2023, which came into force on 24th February 2025. This landmark legislation aims to overhaul public procurement, introducing new rules and objectives that will affect how public sector bodies buy goods, services, and works.

This is particularly important for UK construction companies as understanding and adapting to this new legislation is crucial for future success in bidding for and securing public sector contracts. Our blog will cover the key aspects of the Procurement Act 2023 that will bring you up to speed, its potential impact on your business and what you can do to implement these changes.

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Understanding the Procurement Act 2023

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The Procurement Act 2023 represents a departure from previous EU-based regulations into a new streamlined framework. The core objectives of the Act are to create a simpler and more flexible purchasing system, open up public procurement to new businesses (construction small and medium-sized businesses), be able to take action on underperforming suppliers, and ensure greater transparency throughout the commercial lifecycle. This means a shift towards a system that prioritises value for money, maximises public benefit, and acts with integrity.

Key features of the Act include simplified bidding processes, more open commercial frameworks, removal of bureaucratic barriers for smaller businesses, strengthened provisions for prompt payment, and a central digital platform for accessing tender opportunities. The Act also introduces a new Procurement Review Unit to oversee public procurement and ensure compliance. For construction companies, these changes present both opportunities and challenges that need to be understood to navigate the new procurement landscape effectively.

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Key Changes Impacting Construction Companies

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Several key changes within the Procurement Act 2023 will directly affect construction companies operating in the UK:

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Shift to "Most Advantageous Tender" (MAT)

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One of the most significant changes is the move from the "Most Economically Advantageous Tender" (MEAT) to the "Most Advantageous Tender" (MAT). This means that while price remains a consideration, contracting authorities can now place greater emphasis on other factors such as quality, innovation, social value, and environmental sustainability when evaluating bids. For construction companies, this presents an opportunity to highlight their expertise, innovative solutions, commitment to sustainability, and positive social impact alongside competitive pricing. Demonstrating a holistic value proposition will be crucial for success under the new Act.

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Increased Transparency and New Notices

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The Act brings a significant increase in transparency throughout the entire procurement lifecycle. Contracting authorities are now required to publish various notices at different stages, from pre-procurement planning to contract award and performance. This includes pipeline notices giving early visibility of upcoming opportunities, tender notices announcing active bidding opportunities, and contract award notices detailing the outcomes. 

For contracts valued over £5 million, authorities must set and publish key performance indicators (KPIs) and report on supplier performance against these metrics annually. This increased transparency allows construction companies to gain better insights into upcoming projects and the performance expectations of contracting authorities.

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New Procurement Procedures and Flexibility

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The Act streamlines the number of procurement procedures, replacing several previous options with a new "competitive flexible procedure" alongside the existing open procedure. The competitive flexible procedure offers contracting authorities greater autonomy to design their own procurement processes to suit the specific needs of the contract. This could lead to more tailored approaches that allow for dialogue and negotiation with potential suppliers, particularly for complex construction projects. Construction companies should be prepared for a wider variety of procurement processes and be ready to engage more actively with contracting authorities during the tendering phase.

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Central Digital Platform

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The Act introduces an enhanced "Find a Tender" service as the central digital platform for all public sector procurement activities. This platform aims to simplify the process of finding and bidding for contracts by providing a single point of access for opportunities across the UK. Suppliers, including construction companies, will need to register on this platform to access tender information, store their core business details for multiple bids, and manage their information efficiently. Familiarising yourself with the new platform and ensuring your company's registration is up-to-date will be essential for staying informed about relevant construction tenders.

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Debarment List for Underperforming Suppliers

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The Procurement Act 2023 introduces a new debarment list, which allows public authorities to exclude suppliers with a history of poor performance, misconduct, or other issues from bidding for public contracts. This list will be centrally managed, and contracting authorities will be required to check it to identify and exclude risky bidders. For construction companies, this underscores the importance of maintaining high standards of performance and ethical conduct in all public sector projects to avoid the risk of being placed on the debarment list and losing future opportunities.

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Opportunities for the UK Construction Sector

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Despite the changes, the Procurement Act 2023 presents several significant opportunities for the UK construction sector, particularly for SMEs:

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Easier Access to Public Sector Contracts for SMEs

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The Act specifically aims to remove bureaucratic barriers and make it easier for SMEs to compete for public sector contracts. Measures such as breaking down larger contracts into smaller lots, mandating 30-day payment terms throughout the supply chain, and encouraging contracting authorities to consider the specific needs of SMEs should create a more level playing field. Construction SMEs, which form a significant part of the UK construction landscape, stand to benefit from these provisions, gaining access to opportunities that were previously more challenging to secure.

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Emphasis on Value and Quality over Lowest Price

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The shift towards the MAT evaluation criteria means that construction companies will have more opportunities to win contracts based on the overall value they offer, rather than just the lowest price. This allows companies that invest in quality materials, skilled workforce, innovative techniques, and sustainable practices to be more competitive. Highlighting these strengths in your tender submissions can lead to successful bids, even if your price is not the absolute lowest.

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Encouragement of Innovation and Collaboration

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The competitive flexible procedure encourages contracting authorities to design procurement processes that foster innovation and collaboration. This opens doors for construction companies with novel solutions, advanced technologies, or collaborative approaches to engage with public sector clients early in the process and potentially shape the project requirements. Being proactive in pre-market engagement and showcasing your innovative capabilities can provide a significant advantage.

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Focus on Social Value and Sustainability

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The increased emphasis on social value and sustainability aligns with the growing importance of these factors in the construction industry. Construction companies that can demonstrate a strong commitment to social benefits, such as creating local jobs and apprenticeships, using sustainable materials, and reducing their environmental impact, will be well-positioned to succeed under the new Act. Integrating social value and sustainability into your business practices and clearly articulating these benefits in your tenders will be crucial.

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Preparing Your Business for the New Act

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To effectively navigate the Procurement Act 2023 and capitalise on the opportunities it presents, UK construction companies should take the following steps:

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1. Understand the Legislation: Familiarise yourself and your team with the details of the Procurement Act 2023 and its associated regulations. The government has provided guidance documents and training materials on the central digital platform.
2. Review Your Internal Processes: Assess your current procurement and bidding processes to identify areas that need to be adapted to align with the new requirements, such as record-keeping, payment terms, and performance monitoring.
3. Register on the Central Digital Platform: Ensure your company is registered on the enhanced "Find a Tender" service (the central digital platform) and that your business details are accurate and up-to-date.
4. Focus on Value and Quality: Develop your tender submissions to highlight the overall value you offer beyond just price, including quality, innovation, sustainability, and social impact.
5. Strengthen Your Social Value and Sustainability Credentials: Review your business practices and identify ways to enhance your social value and sustainability contributions, ensuring these are clearly articulated in your bids.
6. Monitor Tender Opportunities: Regularly check the central digital platform for new tender opportunities relevant to your company's services and set up alerts for relevant notices.
7. Engage in Pre-Market Engagement: Be proactive in participating in any pre-market engagement activities organised by contracting authorities to gain insights into upcoming projects and potentially influence the requirements.
8. Ensure Compliance and Ethical Practices: Maintain high standards of ethical conduct and ensure compliance with all relevant regulations to avoid the risk of exclusion or debarment.
9. Review Subcontractor Relationships: Conduct due diligence on your subcontractors to ensure they meet the required standards and are not on the debarment list.

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Navigating the Tendering Process under the New Rules

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The tendering process under the Procurement Act 2023 will likely involve a greater emphasis on demonstrating value and a willingness to engage with the specific requirements of each contracting authority. Construction companies should be prepared for procedures that may include multiple stages, negotiations, or requests for innovative solutions. When responding to tenders, it will be crucial to thoroughly understand the client's objectives, align your proposal with their evaluation criteria, and provide clear evidence of your capabilities and experience.

For the competitive flexible procedure, be prepared to engage in dialogue with the contracting authority to clarify aspects of your bid or explore potential solutions. Highlight your unique strengths, innovative approaches, and commitment to delivering high-quality outcomes on time and within budget. Remember that the tender is a sales document, and you need to convince the buyer that your company is the best choice by explaining the benefits of your service and showcasing your relevant experience through case studies and testimonials.

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The Importance of Social Value and Sustainability

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The Procurement Act 2023 significantly elevates the importance of social value and sustainability in public procurement decisions. Contracting authorities are now legally obligated to "have regard to the importance of maximising public benefit" when awarding contracts, which includes considering social, economic, and environmental well-being. This means construction companies must actively integrate social value and sustainability into their operations and demonstrate these commitments in their tender submissions.

Examples of social value in construction can include creating apprenticeships for local residents, utilising sustainable and recycled materials, delivering career workshops in local schools, and achieving measurable biodiversity net gain. When responding to tender questions about social value, be specific, measurable, and time-bound in your commitments, aligning them with the buyer's priorities and providing evidence of past successes. Emphasising your contribution to the wider community and the environment will be a key differentiator in securing public sector contracts under the new Act.

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Utilising Technology for Compliance and Efficiency

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Bid management software can streamline the tendering process, helping you to manage documents, collaborate with your team, and ensure compliance with the Act's requirements. These tools can assist with creating professional and compelling bids, tracking deadlines, and ensuring that all necessary information is included. Embracing digital solutions will not only improve efficiency but also enhance your ability to meet the increased transparency and reporting obligations under the new regulations.

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Managing Risks and Ensuring Compliance

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While the Procurement Act 2023 aims to create a fairer and more transparent system, it also introduces new risks that construction companies need to manage. One significant risk is non-compliance with the Act's regulations, which could lead to disqualification from bidding or even being placed on the debarment list.

Understanding the grounds for exclusion, both mandatory and discretionary, is crucial. These include issues such as involvement in cartels, bribery, fraud, poor performance on previous contracts, and failure to comply with health and safety or environmental regulations. Implementing robust internal controls, ensuring ethical practices, and maintaining high standards of performance are essential for mitigating these risks.

The increased focus on performance monitoring and the potential for public reporting of poor performance underscore the need for construction companies to have effective contract management processes in place. Regularly assessing your performance against agreed KPIs, addressing any issues promptly, and maintaining open communication with contracting authorities will be vital for ensuring compliance and avoiding negative consequences under the new Act.

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Conclusion and Recommendations

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The Procurement Act 2023 marks a significant shift in the landscape of public sector procurement in the UK, bringing both challenges and opportunities for construction companies. By understanding the key changes, preparing your business proactively, and embracing the new emphasis on value, social impact, and sustainability, your company can thrive in this evolving environment.

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Recommendations for UK Construction Companies:

• Invest in Training: Ensure your procurement and bid teams receive comprehensive training on the Procurement Act 2023 and its implications for the construction sector.
• Embrace Digitalisation: Fully utilise the central digital platform and explore bid management software to streamline your processes and enhance compliance.
• Prioritise Social Value and Sustainability: Integrate social value and sustainability into your core business strategy and ensure these are prominent in your tender submissions.
• Focus on Performance and Compliance: Maintain high standards of performance on all contracts and ensure robust compliance with all regulatory requirements to avoid exclusion or debarment.
• Build Strong Relationships: Engage proactively with contracting authorities, participate in pre-market engagement, and build strong, collaborative relationships.
• Work with Construction Professionals: Saint Global and their Business Intelligence Team are ready to support your business.

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By taking these steps, UK construction companies can navigate the Procurement Act 2023 with confidence, secure valuable public sector contracts, and contribute to a more sustainable and socially responsible built environment.

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FAQ 1: What exactly is the Procurement Act 2023 and why is it important for my construction business?

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Answer: The Procurement Act 2023 is new UK legislation that overhauls how public sector bodies buy goods, services, and works. Understanding it is crucial for UK construction companies because it dictates the rules for bidding on and securing public sector contracts, which can be a significant source of revenue.

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FAQ 2: What is the key difference between the old "MEAT" and the new "MAT" in tender evaluations, and how will this affect my bids?

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Answer: The key difference is the shift from "Most Economically Advantageous Tender" (MEAT) to "Most Advantageous Tender" (MAT). While price remains a factor, MAT allows public sector bodies to place greater emphasis on other aspects like quality, innovation, social value, and environmental sustainability. This means your bids should highlight your expertise and value beyond just cost.

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FAQ 3: How will the Procurement Act 2023 make it easier for smaller construction businesses like mine to win public sector contracts?

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Answer: The Act aims to remove bureaucratic barriers for SMEs by measures such as breaking down larger contracts into smaller lots, mandating 30-day payment terms throughout the supply chain, and encouraging authorities to consider the specific needs of smaller businesses, creating a more level playing field.

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FAQ 4: Where will I find information about new public sector construction tender opportunities under the Procurement Act 2023?

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Answer: The enhanced "Find a Tender" service will be the central digital platform for all public sector procurement activities in the UK. You will need to register on this platform to access tender information, store your company details, and manage your bids efficiently.

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FAQ 5: What are some key areas my construction company should focus on to prepare for the Procurement Act 2023?

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Answer: Key areas to focus on include understanding the new legislation, reviewing your internal procurement processes, registering on the central digital platform, highlighting your value beyond price (including social value and sustainability), monitoring tender opportunities, and ensuring compliance and ethical practices.

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