The UK Procurement Act will come into force on 24 February 2025, having a significant impact on how procurement works in the public sector.
In this article, we look at the key changes to public procurement laws and regulations, as well as important processes that are transitioning.
Jump to:
● Changes to Find a Tender Service
● Streamlined procurement procedures
● Greater opportunities for SMEs
● Swifter payments to suppliers
● A refresh of procurement models
● A shift in procurement priorities
● Greater accountability for performance
● More transparency in public procurement
● How can Procurement Hub help you?
Changes to Find a Tender Service
Find a Tender Service (FTS) is the UK government’s official online portal for suppliers to find and apply for high-value public sector contracts. It was launched in 2021 and features public contracts, typically worth more than £139,688, in England, Wales, Scotland and Northern Ireland. This portal has been used by buyers to advertise projects seeking bids and by suppliers to access these contracts and bid for the work.
What is changing is that FTS will no longer be available to use, and the Central Digital Platform (CDP) will be launched instead.
This new portal will be used for the publication of tenders and also for suppliers to store standardised tender responses. Suppliers will need to register to the CPD in order to bid on public contracts.
Access is expected to be granted to the new portal after 24 February 2025.
Streamlined procurement procedures
In the past, there were seven different public procurement procedures for buyers and sellers, with each having their own specific set of rules, requirements and processes. The changes mean that from 24 February 2025, there are just three procedures, which are:
1. Open procedure
A route for basic tenders that have no pre-qualifying stages. This will allow suppliers to access the relevant documents and put together a bid for the contract.
2. Competitive flexible procedure
Giving public bodies the authority to design their own processes that suit their specific needs. This could include multiple stages and negotiations in order to identify and engage the best possible solution or supplier.
3. Direct award
Apart from a name change (this was previously known as The negotiated procedure without publication), this procedure will remain almost unchanged. It comes with a revised set of limited conditions for use, including prototypes, single suppliers (for example, a unique piece of art or artistic performance), and for reasons of extreme and unavoidable urgency.
Greater opportunities for SMEs
A common criticism of public procurement in the past has been that small and medium-sized enterprises (SMEs) find that there are lots of barriers to them bidding for contracts in this sector. Not only is this challenging for SMEs, it also means that buyers could be missing out on great solutions provided by these suppliers because of these barriers preventing them from taking part in the procurement process.
Once the 2025 changes come into effect, it should be easier for micro, small and medium-sized enterprises to bid on relevant public sector contracts. This has been achieved by:
● Reducing some of the barriers for entry – by specifying that contacting public bodies should encourage engagement with SMEs and the new flexible procedures should make contracts more accessible for these businesses to bid on.
● Breaking larger contracts down into smaller lots – to help secure the best possible supplier for individual components (lots) of the project rather than limiting the bids to suppliers that cover all areas.
Swifter payments to suppliers
The 2025 changes include specific reference to ensuring suppliers are paid for what they deliver in a faster way than was enforced in the past. Payments to suppliers from contracting public bodies should be made within 30-days of the invoice receipt.
The 30-day payment requirement is also applicable to subcontracts that are tied to the delivery of the contract. Suppliers that use subcontracts to deliver on a bid will need to demonstrate that they have effective payment systems in place in order to meet this requirement.
A refresh of procurement models
Using a specific procurement model for public contracts can save a significant amount of time and resources for buyers, whilst also removing some of the barriers for entry for suppliers.
There are a number of different models to suit different types of project and contract, which include:
Framework agreements
Framework agreements are not new but will continue to be used under the 2025 changes. Buyers can use a framework that has an arrangement with a limited number of pre-qualified suppliers. The suppliers need to join during the initial tendering process, and the framework runs for up to four years.
Open framework agreements
Open framework agreements are arrangements that include a limited number of pre-qualified suppliers, but they can be reopened for entry and new suppliers can be added if needed. They can run for a maximum of eight years and offer more flexibility than standard framework agreements.
Dynamic markets
Replacing a previous procurement model called Dynamic Purchasing Systems (DPS), Dynamic markets offer an unlimited number of pre-qualified suppliers for buyers to choose from. New suppliers can join at any time, as long as they meet the necessary requirements, and there isn’t a time limit on a dynamic market arrangement, so it can run for longer than either of the frameworks.
Any Dynamic Markets or Frameworks that were issued under the Public Contract Regulations 2015, and are currently live, will be terminated on 24th February 2028, 4 years after the launch of the Procurement Act. This will happen regardless of their previously published expiry dates.
A shift in procurement priorities
The 2025 changes include some new priorities that should be taken into account when buyers are selecting suppliers for their project. These include:
Most Advantageous Tenders (MAT)
The primary priorities in the past have generally been finding the best balance of quality and price in the supplier bids. This new approach enables buyers to also take into consideration other factors, such as the sustainability and social value benefits that a supplier offers. This enables public sector procurement teams to look at the bigger picture and different types of value when assessing bids from suppliers.
National Procurement Policy Statement (NPPS)
This is a procurement document that outlines the key goals for buyers to consider when conducting their procurement process. It’s a document that suppliers can use as part of their tender to help ensure their bid aligns with the goals.
Greater accountability for supplier performance
The 2025 changes include measures to hold suppliers accountable for their performance on projects. This means that future work will be prevented from being awarded to suppliers that have already shown they are unable to deliver on the requirements. This takes the form of:
A central debarment list
This list will identify suppliers that should be excluded from future public contracts and public sector buyers will be able to access the information to ensure they don’t contract a supplier that appears on it.
Some suppliers will be placed on the list as ‘mandatory exclusions’ if they have previously breached competition law or are subject to serious criminal convictions. Others may be subject to ‘discretionary exclusions’ if there has been misconduct or sustained poor performance.
Due diligence
There have long been procurement due diligence requirements in the public sector, but the UK Procurement Act’s 2025 changes include an extension of this. Suppliers will have to ensure they are not connected to suppliers on the central debarment list, including any part of their supply chain, if they want to bid on a public sector contract. If there are ‘connected persons’ involved, the new rules mean that any parent company, subsidiary or director on the debarment list will exclude a supplier from being eligible to bid.
Setting KPIs (Key Performance Indicators)
For contracts with a value of over £5 million, the contracting public body will need to set at least three KPIs for suppliers. These KPIs will vary, depending on the specifics of each individual project. The performance of suppliers against these KPIs will be monitored, and a contract performance notice will be published at least once a year to report on this.
More transparency in public procurement
Lack of access to relevant information during the procurement process has been a real challenge for many suppliers in the past in their attempts to make the best possible bids. The 2025 changes aim to tackle this by requiring:
Mandatory feedback to be given to suppliers
The contracting public body is required to give suppliers feedback that is specific, informative and timely, regardless of whether the bid is successful or not. This means that even suppliers that are unsuccessful in this particular contract bid can take what has been highlighted by the buyer into consideration and improve future bids.
Assessment of conflict of interest risks
Public sector contracts must be awarded fairly and impartially, so 2025 changes to the regulations means that the contracting bodies are now required to assess for any conflict of interest and take any appropriate action to mitigate bias.
New notices
To give businesses increased visibility of market developments, a range of new notices have been created. These include notices in relation to planned procurements, contract performance and terminations, direct awards, spend data and market engagement.
Early supplier engagement
The 2025 changes include an encouragement for public bodies to share details of upcoming procurement projects within the timeframe of the next 18 months, in what’s known as a Pipeline Notice. This is a mandatory requirement for public authorities expecting to spend £100 million or more on goods or services in the coming financial year.
Find out what industry experts say about the complexities of the new procurement rules and regulations by listening to the Procurement Act Podcast.
How can Procurement Hub help you?
Procurement Hub is part of Places for People, the largest social enterprise in the UK, which means we understand how important it is to get the procurement process right and the impact that public sector projects have on budgets, local communities, the environment and the economy.
Our specialist team offer a range of procurement consultancy services that are designed to help buyers successfully navigate the entire process, taking into account the numerous changes under the new UK Procurement Act, to deliver the best possible outcomes.
We also offer a number of procurement solutions that can easily be tailored to your organisation’s needs. Our CIPS-qualified procurement team create robust, yet flexible solutions that are focused on maximising efficiency and delivering what our members need in a straightforward way.
Let us help you find a procurement solution that meets your needs.