UK Procurement Act – Contractors need strong planning tools to prepare for law change

The construction industry is no stranger to regulatory changes, but the Procurement Act 2023 represents one of the most significant shifts in UK public procurement in recent years. If your business competes for public contracts, these changes will affect nearly every aspect of how you operate, from bidding strategies to supply chain management. 

The Act aims to create a more transparent, efficient procurement landscape while driving social value across public projects. For construction firms of all sizes, adapting quickly isn’t just about compliance – it’s about gaining a competitive edge in a transformed marketplace. 

Understanding the Procurement Act 2023 

Businesses will be familiar with the Most Economically Advantageous Tender (MEAT) – this is now gone. In its place is the Most Advantageous Tender (MAT) framework. While cost remains important, public buyers must now give equal consideration to quality, innovation, sustainability credentials, and social impact when awarding contracts. 

Transparency requirements have been significantly expanded. You’ll need to prepare revised procurement notices and ongoing reporting throughout the contract lifecycle – not just at bidding and completion stages. Every project milestone now comes with accountability requirements. 

For smaller suppliers, the mandatory 30-day payment terms for undisputed invoices provide welcome relief from cash flow pressures. But these changes cut both ways, as tier one contractors must ensure their own payment processes comply with these accelerated timeframes. 

Perhaps the most attention-grabbing is the introduction of enhanced supplier exclusion rules, including a list of companies with serious misconduct or repeated failures. The results of landing on this list are potentially catastrophic – one major misstep could lock your business out of the public sector marketplace for years. 

The Act aims to streamline procurement processes, enabling faster decision-making while promoting collaboration throughout supply chains. By creating a more level playing field for SMEs, it aims to balance accessibility with accountability. 

Impact on day-to-day operations 

These changes will reshape your operational activities in several ways. First, you’ll need to emphasise early engagement with subcontractors during planning and design phases. The days of bringing suppliers in at the last minute are over if you want to drive innovation and address risks effectively. 

Expect to spend considerably more time demonstrating social value, ethical practices, and environmental considerations in your tenders. Generic statements about “commitment to sustainability” won’t cut it anymore – you’ll need specific, measurable initiatives backed by data. 

Compliance with new KPIs and transparency measures will require solid tracking systems. Without a systematic approach to monitoring performance metrics, you risk missing reporting deadlines or failing to identify problems until they become bigger compliance issues. 

The overall impact varies significantly depending on your company’s size. SMEs will benefit from improved payment terms and fairer competition but may struggle with the resource demands of increased reporting requirements. Larger firms must adapt their procurement strategies to align with MAT criteria while developing more collaborative relationships with their supply chain partners. 

Technology to drive compliance 

Construction planning software has evolved from a nice-to-have into an essential compliance tool. The right digital solution can automate bid management processes to align with MAT criteria while tracking KPIs and generating compliance reports throughout project lifecycles. 

Look for platforms that enhance transparency by centralising documentation and supplier performance data. When an auditor or public client requests information, you’ll want it available at the click of a button rather than buried in emails or spreadsheets across multiple departments. 

Key features that drive both compliance and efficiency include procurement tracking tools that monitor contract milestones, payments, and supplier compliance. Risk management functionality can identify financial health issues within your supply chain before they impact project delivery. Collaboration platforms facilitate that critical early engagement between contractors and subcontractors that the Act emphasises. 

Opportunities under the new framework 

While compliance requirements have increased, the Act also creates substantial growth opportunities. SMEs can compete more effectively for public sector contracts thanks to standardised prequalification criteria that reduce administrative burdens. 

Main contractors can leverage subcontractor expertise more strategically, optimising resource allocation and reducing costly rework through earlier collaboration. The emphasis on innovation also creates space for forward-thinking firms to differentiate themselves from competitors still focused primarily on cost-cutting. 

In the future, expect to see increased adoption of digital tools specifically designed for procurement management. Project reporting will extend further into building lifecycle management as clients seek greater visibility into long-term performance and sustainability metrics. Companies that develop expertise in sustainability and innovation will find themselves with a growing competitive advantage in the public sector marketplace. 

Embracing the changes 

The Procurement Act 2023 presents both a challenge and an opportunity for UK construction businesses. Those who view these changes merely as regulatory hurdles to overcome will find themselves at a disadvantage compared to companies that embrace the Act’s underlying principles. 

By investing in appropriate digital tools, rethinking supply chain relationships, and developing robust compliance frameworks, construction firms can not only meet the Act’s requirements but leverage them to build more sustainable, innovative, and ultimately successful businesses.  

The future of public procurement in the UK construction industry has arrived – is your company ready?