The new Procurement Act 2023 has had its fair share of discussion, and then some. The reason is simple; there are a lot of significant changes that suppliers – and local and central government authorities, including central government departments – must grapple with to become fully conversant on the matter.
Transparency, for instance. Transparency has long been a part of public sector procurement. EU directives insist on transparency in procurement processes, and since Brexit, the UK has also made transparency a priority.
Easy Does It
In fact, the UK is on a mission to simplify government procurement processes. This is evidenced in its decision to replace 350 EU procurement rules with a simpler, more flexible system.
This, in turn, helps the government meet one of its other aims, which is to encourage more SMEs, start-ups, and charitable and social enterprises to enter the market. Simplified procurement processes, including transparency, open the door that much wider for SMEs to come through and compete on the newly levelled playing field.
We’re going to look at the importance of transparency in public sector procurement and the impact procurement activity has on SMEs.
Transparency’s Role In Public Sector Procurement
Way back in June 2022, the Government published a policy paper, “Transforming Public Procurement – our transparency ambition.”
It stated that the intention is to “… open up opportunities within the public sector to small businesses, driving down prices, increasing innovation, and improving the business landscape across the country … collaborate better, drive value for money, and identify cost savings …”
For stakeholders, this means knowing which stage the process is in, the details and specs in the contract, when there are any changes to the terms, the weight of each requirement, and which procedure will be used.
This is particularly beneficial to SMEs taking advantage of contract opportunities because they have all the information they need to submit a bid that will be evaluated according to merit, just like all the other bidders, regardless of their size.
How Can Central and Local Government Pave The Way For SMEs Through Local Authority Procurement
(Without showing undue favour)
Contracting authorities can use the Procurement Act to help SMEs compete evenly by taking four steps.
1) Pre-market engagement
Pre-market engagement is actively encouraged, with Regulation 40 of the Public Contracts Regulations 2015 (PCR 2015) providing some guidance on how to go about it in a fair and non-discriminatory manner. For example, publishing notices with information on procurement plans.
All suppliers are privy to this information, but it’s a good way for SMEs to get to know contracting authorities better and better understand how public contracts work.
2) Clear documentation
Contracting authorities must ensure their documents are written clearly and concisely so there is no ambiguity and very little chance for misunderstandings. When SMEs know exactly what is required, they don’t waste time and resources writing and submitting bids that aren’t strictly their bag. SMEs and start-ups benefit because they can still compete successfully with organisations that have more experience in public procurement.
3) Good communication
Good communication is like clear documentation. It must be comprehensive yet concise and come at regular intervals. Typically, public sector buyers include a timeline in their Prior Information Notice (PIN). They keep bidders updated according to the timeline via procurement and contractual notices. Consistent, valuable communication shows SMEs which public authorities are the most trustworthy and the most open to dialogue.
To keep things simple, it’s a good idea to keep all communication on one channel or procurement platform.
4) Stay in the know
It’s not your job, as an SME, to keep up with all the tweaks and changes that have an impact on public sector contracts, for example, new thresholds. That’s the contracting authority’s job. When the three points above are followed properly, this shouldn’t be a challenge. Trusted public bodies can be counted on to find out about and adhere to changes, so SMEs needn’t worry that their processes are outdated or non-compliant with transparency requirements, for example.
It’s All About Competitive Procedures
There are two competitive procedures that ensure SMEs can take advantage of smaller contracts under the new Procurement Act.
1) Single-stage: This is an open procedure. Any interested suppliers can tender for the contract.
2) Other competitive procedures: This is rather broad but it boils down to contracting authorities designing their own procedures.
Direct awards is another procedure but it’s only used in exceptional circumstances, for example, to protect human, animal, or plant life or health or maintain public order and safety. Direct awards are a result of COVID-19 and the tangle that resulted in a bit of a procurement nightmare.
Examples of the competitive procedure
Defence: Contracts are awarded for equipment from major multinational companies that include Rolls-Royce.
Healthcare: Contracts are awarded for services from major companies that include Virgin Care.
Infrastructure: Contracts are awarded for construction from companies that include Balfour Beatty.
Benefits Of The Procurement Act For SMEs
The Act has many benefits for SMEs and social enterprises.
1) A central digital platform that logs suppliers’ details, which will be used when bidding for multiple contracts. There’s no need to keep entering their details for new contract opportunities.
2) Contracting authorities publish contract notices on the central platform, so SMEs have access to contracts in one place rather than having to search several contract registers.
3) Simplified tendering helps SMEs to communicate, negotiate, and collaborate with the public services bodies.
4) SMEs are able to promote economic growth within the UK.
5) The switch from MEAT (Most Economically Advantageous Tender) to MAT (Most Advantageous Tender) in tender evaluation shifts the emphasis from price only to overall value. This enables SMEs to provide maximum value at prices that exceed quotes from larger enterprises. Provided the larger enterprises can’t match them in value.
Challenges Of The Procurement Act For SMEs
The Procurement Act also has challenges for central government departments, government buyers, and suppliers to overcome.
Under the new Notices (PINS), unsuccessful suppliers’ identities are published before they have a chance to challenge decisions. This won’t go down well with suppliers who would much rather exhaust all their options before they are publicly identified, and even then naming and shaming are unwelcome.
All the notices, social value evaluation, feedback systems add to buyers’ administrative burden. So, instead of saving time, like SMEs, it’s possible that contracting authorities will spend more time on admin and won’t benefit quite as much from streamlined procurement processes.
Navigating The Procurement Act As An SME
The new Procurement Act 2023 will only fully come into play in October 2024, but the time to get to grips with the procurement regulations is now. Supply2Gov (S2G) has been in the industry long enough to know every nuance of every stage in government procurement.
If you’re looking for someone to guide you through the changes in public procurement contact us. Not only can we help you navigate the Procurement Act, we also have an extensive range of services that include a Contracts Finder, tender alerts, and tips on how to grow your business. We operate in all areas of the UK’s public sector, from IT to Healthcare and Cleaning to Defence.
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