The Procurement Act 2023 came into force in February this year. One of the aims of the new legislation was to “open up public procurement to new entrants such as small businesses and social enterprises so that they can compete for and win more public contracts”.
If you are an SME supplying goods, services or works to the public sector, there are a number of things to be aware of following the regime change.
Removal of barriers to SMEs
The new legislation requires public sector organisations to have regard to the barriers that SMEs may face and consider whether they can remove or reduce those barriers. This might include:
- ensuring that the questions that suppliers need to answer in their bid are not overly complex
- avoiding unnecessary criteria that SMEs may not be able to fulfil
- ensuring clarity of requirements, applying achievable financial thresholds
- giving SMEs sufficient time to respond
- appropriately balancing risk allocation
- providing straightforward contractual terms and conditions
- encouraging innovation
- providing constructive feedback
- splitting the opportunity into smaller, more specific lots
The new legislation also introduced open frameworks, which allow new suppliers to be added at certain points during the term of the framework. This means that, unlike under the old regime, suppliers are not prevented from access to opportunities by reason of long-running closed frameworks. This will benefit SMEs by ensuring increased opportunity to be appointed.
Easier identification of opportunities
Previously, there were two different platforms that suppliers needed to look at to find contract opportunities: Find a Tender (for higher value contracts) and Contracts Finder (for lower value contracts). These have now been combined into Find a Tender, making it easier to identify opportunities.
As a supplier to the public sector, you will need to register and complete “core supplier information” about your business in order to be able to be able to bid for public contracts. After registration, you will need to keep this information up-to-date, and we recommend that you put a process in place to ensure that this is updated following any change in your contact details or financial status. You can then set up alerts so that you are automatically notified of opportunities you may be interested in.
Advance notice of opportunities
Under the new legislation, public sector bodies are subject to enhanced transparency requirements, implemented to ensure openness at all stages of a procurement process. One of the ways in which this is achieved is the requirement for the public sector to issue certain notices to inform potential bidders about its intended procurement activities. The notices of intended procurements which a public body may publish comprise:
- Preliminary market engagement notices: these are strongly recommended (but not mandatory) as they allow the public sector to engage the market in designing an upcoming contract, in order to clarify its requirements, asses the market’s capacity to deliver its proposal and to develop its procurement strategy. The intention of these notices is to level the playing field and attract new entrants. Contracting authorities are required to ensure that no supplier is unfairly advantaged by any preliminary market engagement.
- Pipeline notices: these are mandatory for contracts with a value of over £2m where the contracting authority spends more than £100m on public contracts in that year, but can also be used voluntarily for lower-value contracts. The information required to be provided in a pipeline notice is very high-level. These notices will be published on an annual basis, in line with the public body’s financial year.
- Planned procurement notices: these are optional notices, intended to give as much notice of an upcoming procurement as possible. The use of a planned procurement notice reduces the minimum time period between the tender notice and deadline for submission of tenders, potentially to as little as 10 days.
These new notices benefit SMEs as they provide advance notice of upcoming opportunities, allowing suppliers to plan ahead for any tender opportunities it wishes to pursue.
New exclusion grounds
Suppliers sometimes miss out on opportunities because competitors make promises to the public sector that they, once appointed, fail to deliver. This is frustrating, particularly for SMEs who lose out to big players, only to later find that the winning bidder isn’t able to follow through for the price stated in its bid. The enhanced exclusion grounds under the new legislation will assist in preventing this, as public bodies will be able to exclude suppliers who breach their contracts or engage in poor performance from bidding for future opportunities. This will benefit SMEs by either removing from competition suppliers who fail to live up to their promises or discouraging this type of behaviour.
Final thoughts
The Procurement Act 2023 marks a significant shift in public sector procurement, with a clear focus on inclusivity and accessibility for SMEs. If you are an SME looking to engage with public sector contracts, now is a great time to explore the new landscape and position your business for success.
For more information or advice on how your business can benefit from the new procurement regime, please contact Jenny Wade at Jenny.Wade@swinburnemaddison.co.uk or call 0191 384 2441 to speak with a member of our commercial law team.
