Since the UK’s exit from the European Union the EU-based Public Contract Regulations 2015 (PCR15) have continued to be used with very few alterations. This is set to change from October 2024, when the New Procurement Act 2023 (PA2023) becomes operational. This new approach to public procurement will sweep aside decades of caselaw, practice and process.

The new PA2023 will require fundamental changes to the governance, processes and systems used by all public contracting authorities to procure and manage suppliers in England, Wales and Northern Ireland. This will entail transforming ways of working across the whole organisation, not just within the procurement function / legal department. The scale and breadth of change are considerable, and the effort needed to implement this legislation should not be underestimated.

Key changes in the New Act include:

• new procurement principles and objectives, with particular focus on innovation, transparency, and SMEs;
• new procurement routes and requirements;
• new definitions, terminology, and thresholds;
• increased flexibility over procurement processes and decision making by contracting authorities;
• substantially increased transparency requirements;
• significant increases in the number and contents of published notices;
• broadened scope to cover the whole contract life, including contract management, post award performance, payments, and contract termination;
• performance reporting requirements and the new supplier debarment list; and
• change in award criteria from a Most Economically Advantageous Tender to a Most Advantageous Tender.

Implementing these changes is a huge challenge. Contracting authorities must be aware of the nature and volume of the new requirements and have robust plans to ensure they are prepared.

Concerns about implementation

The Public Accounts Committee report published in December 2023 found that they could not demonstrate that public procurement is achieving value for money. It also raised concerns that contracting authorities may not be prepared to successfully implement the new law. Non-compliance with PCR2015, particularly regarding changes to contracts and the use of direct awards, is still widespread despite these regulations being in place for nearly a decade. The introduction and complete implementation of PA2023 is likely to take a long time, as many areas of the market will need to make behavioural and cultural changes, as well as changes to their processes, to be fully compliant.

What should you be doing now to ensure you are ready for the new PA2023?

1. Senior sponsorship

The successful implementation of PA2023 is going to require significant resources and investment. There must be awareness, buy-in and support from senior leaders to deliver the necessary changes throughout the organisation. Contracting authorities should adopt a strategic approach to determine the goals and objectives, risk appetite, current compliance culture, and the potential benefits that may be realised through the required procurement transformation.

Key to success is proper communication and alignment throughout the change programme with these overarching strategic objectives, as well as investment and sponsorship from senior leaders.

2. Embrace the disruption

The previous PCR2015 regime had decades of experience, explanatory notes, and well-worn conventions. The new PA2023 is developing all of these from scratch; as a result, expect ongoing change and refinement as further guidance is developed and published from the Cabinet Office, Crown Commercial Services and eventually, through the courts. These updates will need to be reflected in every contracting authority’s constitution and procurement processes as they arise. Thinking ahead on how to future-proof your procurement processes and ensure there is an agile response to these changes will be essential to ensure compliance with the relevant laws and legislation going forward. Make sure PA2023 is on the agenda and is a key part of future plans as we go through this once-in-a-generation change to public procurement.

3. Assess your current level of compliance

Alongside the challenges and upheaval of implementing the new Act, this required change and revision of procurement processes presents a unique opportunity for improvement. As policies, processes and systems are reviewed from the ground up to match against the new requirements, this can also form the basis for process, cultural and behavioural change across the organisation when it comes to procurement.

Firstly, consider your current level of compliance with all the requirements of PCR2015. In addition to PA2023, PCR2015 regulations will still be applicable for several years during a transition period until old contracts and frameworks under PCR2015 expire, and new contracts under PA2023 are procured.

And what changes could we make now, to ensure procurement is done right in the future? The first step to introduce PA2023 should include undertaking a gap analysis and an honest scrutiny of the effectiveness of current procurement processes. These outcomes can be used to inform the development of new processes and procedures, that will also be aligned with the requirements of the new Act, such as conflict of interest, flexible procurement procedures, and transparency and publishing requirements. This fresh start approach allows contracting authorities the opportunity to implement significant changes to how they conduct procurement.

4. Planning

Contracting authorities should ensure they have a planned transformation programme in place to address and implement the required changes in time for October 2024.

Key questions for management:

• have you seen this plan?
• Is it adequate to address the volume of change required?
• Is management and the wider organisation aware of the changes to public procurement, and has this been communicated with key stakeholders?
• Are we aware of the possible risks associated with these required changes?

What we expect planning to cover as a minimum.

• Revising Contract Standing Orders and other relevant policy and guidance to be compliant with the new PA2023.
• Reviewing the procurement pipeline and identifying where the new PA2023 will be applicable and where the existing PCR2015 regulation still apply.
• Revising procurement processes and systems to be compliant with PA2023.
• Revising governance and roles and responsibilities to be compliant with PA2023.
• Identifying and communicating with relevant stakeholders over the new requirements of PA2023.
• Identifying and delivering appropriate training on PA2023 and deliver the required cultural and behavioural changes.

The delivery and implementation of this transformation programme will have its challenges, including timetabling, governance requirements, stakeholder management and upskilling the relevant individuals. Contracting authorities should adopt a project management methodology to address these challenges, in particular having clear strategic goals and aligning the implementation against them.

The new Procurement Act 2023 offers huge opportunities for improvements and better buying across the public sector. However, we need to act now to unlock these benefits and be ready for the change.

How can RSM help?

1. Diagnostic Audit

• Audit / assessment of current compliance.
• Audit of current capability, adequacy of existing governance process and control.
• Audit / assessment of PA2023 implementation plan.

2. Assistance and Advice

• Design, drafting and delivery of PA2023 implementation plan.
• Drafting of new CSO and governance.
• Design and implantation of new process, control and roles and responsibilities.
• Training and upskilling teams in PA2023.
• Provide practitioner mentoring ‘phone a friend’ advice on the PA2023 requirements.

3. Procurement as a service

• Run end-to-end procurement processes fully aligned to the new PA2023 procurement requirements.

For more information, please contact Daniel Harris or Mohi Khan.