Procurement Act 2023 in Practice: What Buyers and Suppliers Must Change

The Procurement Bill received Royal Assent on 26 October 2023, and the Welsh Government's supplier guide confirms the Act and its associated regulations went live on 24 February 2025. The Crown Commercial Service says the UK public sector spends around £300bn a year on public procurement. The Act did not change that scale. It changed the rules, the notices and the public information through which the money is allocated and monitored.

Local Government Lawyer reported a noticeable rush of new procurements being commenced before the Act went live, ahead of the deadline. That rush is now over. Every competition launched since February 2025 runs under the new regime, and contracts awarded under it will begin to reach their first KPI assessments. For a head of procurement, there is no longer a parallel legacy process to retreat to, and the first year's lessons are visible in published data.

The practical implication is that the Act should be treated as an operating-model change, not a legal update. It touches forward planning, market engagement, evaluation design, contract management and supplier relationships, which in most organisations sit with different teams. The risk is that each team implements its own part, and the organisation as a whole fails to change how it decides, evidences and reports. Procurement leaders need to own the end-to-end view.

What to do: map the buying lifecycle against the new regime and name an accountable owner for each stage, from the pipeline notice to the contract performance notice. Identify the three or four points where the Act changes a decision, not just a document, and focus training there. For suppliers, make the same map from the other side, and identify where evidence is requested at each step.

One consequence is that governance has to move upstream. Under the old regime, legal review typically concentrated on the procedure and the award notice. Under the Act, the decisions that determine outcomes, such as what to put in a pipeline notice, how to frame a consultation and which KPIs to publish, are taken months earlier by commercial and operational teams. Heads of procurement should ensure those teams have clear guidance and escalation routes, and that legal input is available when choices are made rather than only when documents are finalised.

Procurement leaders should also use the first year of live data to test their own assumptions. Which categories drew the most notices, how many converted, how long did each stage take and where did challenges arise? These are questions the Act now allows an organisation to answer from its own records and from published data, and the answers tell you where training, templates and governance will pay back fastest.

The Welsh Government's guide notes that authorities must publish pipelines of future opportunities for contracts over £2 million. Local Government Lawyer reports that those notices cover a list of expected procurements over an 18-month look-ahead, and that clarification of the rules led to a scramble to publish the individual notices before a 26 May 2025 deadline. The effect is a far larger public record of what the public sector intends to buy.

Public.io, a procurement-software vendor, has published its own analysis of Find a Tender data, which is not official statistics but indicates the scale. Since February 2025 the platform has recorded 10,610 pre-market engagement notices and 8,582 pipeline and planned procurement notices. The same analysis finds that only 21% of planning notices and 32% of pre-market engagement notices advanced to the tender stage, and that just 10% of planning notices and 15% of procurement notices resulted in contracts. Notices signal intent, not commitment.

For suppliers, the implication is to build a qualification process rather than an alert habit. A notice that is unlikely to proceed costs bid resources if treated as a certain opportunity. The better approach is to score each notice on buyer history, budget evidence, incumbent position and fit with your delivery record, and to engage in the market consultation where the buyer is shaping requirements. Early influence is worth more than a late bid.

For buyers, the data is a prompt for discipline. If few planning notices become tenders, suppliers will learn to discount your notices, and engagement will fall. Public.io cites an average of approximately 358 days from planning to award between 2021 and 2023. What to do: publish notices you intend to honour, update them when plans change, and use pre-market engagement to test the specification rather than to confirm it.

Suppliers should also recognise that the volume of published notices changes the competitive dynamic. When the public sector's intentions are visible to every bidder, advantage cannot come from knowing about an opportunity first. It comes from knowing which opportunities are worth pursuing, and from having built the relationship, the evidence and the delivery record before the competition opens. That is a longer-cycle commercial discipline than reactive bidding and it rewards suppliers who invest in account planning for a small number of buyers.

Buyers also gain from reading the same data as suppliers. If competitions in a category repeatedly attract few bidders, the pipeline notice may be too late, the requirement too narrow or the selection criteria too demanding. Pre-market engagement is the place to learn this before the tender, and a short, published summary of what was learned builds credibility with the market and encourages participation in later competitions.

The Act replaces the old most economically advantageous tender test with the most advantageous tender, giving buyers room to weigh quality, delivery and wider benefits alongside price. For central government, PPN 002 on social value replaces PPN 06/20 for procurements commencing on or after 24 February 2025. The direction is clear: buyers are expected to consider social value in a structured way and to be able to explain how they did so.

This changes what a good answer looks like. Narrative commitments, such as a pledge to support local employment, are less persuasive than operating data showing what the supplier has already delivered: apprenticeships completed, local spend, supply-chain diversity or carbon reduction on comparable contracts. Evaluators are asked to justify scores, and a score that rests on verifiable data is easier to defend than one that rests on aspiration, particularly if a losing bidder challenges it.

For buyers, the implication is that evaluation criteria need to be measurable. A social value question that cannot be scored consistently by three evaluators will produce disputes. Buyers should define the outcomes they want, the evidence they will accept and the way the evidence will be verified after award. Doing so also supports the later KPI regime, because the commitments made at bid become the measures used in contract management.

What to do: for each major category, define two or three social value outcomes linked to the buyer's own priorities and agree how they will be measured. For suppliers, prepare a standing evidence file with dated, auditable figures from live contracts, and tailor it to the buyer's stated outcomes rather than submitting a generic policy document.

There is a further point on timing. A planning-to-award period measured in hundreds of days means a supplier may qualify a notice and then wait a year or more for a decision. Cash planning, resource commitments and team availability need to reflect that. Suppliers that over-resource early bids erode margin, while those that under-resource lose the opportunity to shape requirements. A simple stage-gate that links bid investment to evidence of buyer commitment helps strike the balance.

The GOV.UK guidance states that before entering into a public contract with an estimated value of more than £5 million, a contracting authority must set at least three KPIs, and that where more are set all must be published. It also requires authorities to assess performance against all KPIs at least once in every twelve-month period during the contract and on termination. The effect is to make contract performance a matter of public record.

This is the part of the Act most likely to change commercial behaviour. Under the previous regime, performance disputes were mostly private. Under the new one, the KPIs are in the contract details notice and the assessments are published, so a rating becomes visible to other buyers and to competitors. Suppliers with strong delivery will find that performance is a sales asset. Suppliers with weak delivery will find it a liability that follows them into the next competition.

For suppliers, the implication is to agree KPIs that reflect what you can control and measure, and to build reporting before the contract starts. Disputes over how to measure a KPI are costly after award, and the Act's reporting cycle leaves little room for retrospective reinterpretation. The Welsh Government's guide also reminds suppliers of the 30 day payment term implied into every public sub-contract, which affects how prime contractors manage their supply chains.

What to do: treat KPI negotiation as part of bid strategy. Propose measures that tie to your operating data, agree the reporting method and set the baseline in the contract. Buyers should prepare contract management teams for the annual assessment cycle, with owners, data sources and escalation routes defined before award. Without capacity in this area, the published KPIs become a reporting burden rather than a management tool.

Buyers should be careful not to treat social value as a single added question. The strongest approach links it to the buyer's own outcomes and to the contract's KPIs, so that what is promised at bid is measured in delivery. Where social value sits only in the evaluation and not in the contract, suppliers learn that the answer is a marketing exercise. Where it is carried through to the contract performance notice, they learn that the commitments are real, and the quality of the answers improves.

A final consideration is behaviour in dispute. When KPIs are published and assessed annually, a disagreement about a rating is no longer a private matter between two parties. Both sides should agree in the contract how data will be gathered, how a rating will be reviewed and how quickly an error can be corrected. A short, agreed escalation route usually resolves differences before they reach a published notice, and it protects the relationship on which delivery depends.

The BCC and Tussell SME Procurement Tracker shows direct public sector spend with SMEs rising from £27.5bn in 2019 to £39.7bn in 2023 and £45.4bn in 2024. The same tracker reports that the SME share of direct procurement spend stalled at 20% in 2024, and that 130,000 SMEs supplied government directly that year, a decline from the previous year. The median SME earned £31k from the public sector in 2024.

The share varies sharply by buyer. In 2024, local government sent 35% of procurement spend directly to SMEs, the highest of any body type, against 19% from the NHS and 11% from central government. Public.io's early analysis of the new regime finds that 12.3% of 25,740 procurements were deliberately divided into lots to encourage smaller bidders. Structure is one of the few levers buyers control directly.

The implication for SMEs is that the Act opens the door but does not fill the room. Visibility is better, with more notices and clearer processes, but the winning factors are still capacity, evidence and relationships. For buyers, the implication is that SME targets will not be met by publishing notices alone. Lots, proportionate selection criteria, realistic payment terms and early engagement are the practical tools, and each needs to be designed into the competition.

What to do: SMEs should choose a small number of buyers where they have a credible delivery record and build a long-term relationship through the pipeline, consultation and framework routes. Buyers should review the last ten competitions in each category for barriers to SME participation, and test lot structures and selection thresholds against the data. Targets should be set on outcomes, not on the number of notices published.

A common issue is that KPIs are chosen late, once the contract is drafted, and reflect what is easy to measure instead of what matters. The Act's requirement for published KPIs raises the stakes. A KPI that rewards activity, such as the number of reports delivered, can hide poor outcomes and expose both parties to criticism. Buyers and suppliers should agree measures that reflect value delivered, with definitions precise enough to be audited and flexible enough to be revised through a controlled process.

The Act gives buyers flexibility, including the competitive flexible procedure, which lets an authority design a process around the requirement. Flexibility moves risk from the rule book to the team: a badly designed process is now the authority's own failure rather than a consequence of a prescriptive rule. Public.io reports that the platform has processed over 40,000 procurements and 15,000 award notices since February 2025, a large volume for a new system.

Public.io's review also notes that progress on direct awards and prompt payment is hard to assess because of implementation delays and data gaps, and that the central platform does not publish SME status on award notices. These gaps matter because the regime depends on data to demonstrate that it works. Buyers who capture their own data on supplier diversity, time to award and challenge rates will be better placed than those who wait for the platform to supply it.

The implication for heads of procurement is that capability is the constraint. Designing a competitive flexible procedure, drafting measurable social value criteria and managing KPIs all require commercial judgement beyond compliance. Teams that treat the Act as a form-filling exercise will reproduce the old process in new documents. Teams that invest in commercial skills will use the flexibility to shorten timelines and improve outcomes, not just to meet the rules.

What to do: assess your team against five capabilities: market engagement, procedure design, evaluation, contract management and data. Close the largest gap first, usually contract management, because the KPI duty has a legal clock. Create a short library of procedure templates for your most common categories, so that flexibility becomes a managed choice and not a fresh design exercise for each competition.

For larger suppliers, SME policy is also a supply-chain issue. Prime contractors will be asked how they use SMEs in delivery, how quickly they pay them and how they handle disputes. The 30-day expectation on sub-contract payments means weak working-capital discipline can become a bid risk. Primes that map their supply chain, measure payment times and can show SME participation in live contracts will be better placed than those that rely on policy statements, and they will find the data useful for their own cost management.

If the regime rewards evidence, the supplier's task is to hold evidence in a form that can be reused. That means a library of delivery metrics, KPI results from live contracts, social value data, references, financial and security assurances and policy documents, all dated and owned. Bid teams that start gathering these items after a tender is published are competing at a disadvantage, because the best material comes from operations and takes time to collect.

The library should be built around the questions buyers now ask. These include performance against comparable KPIs, evidence of social value outcomes, supply-chain payment practice, resilience and exit arrangements. Each item should have a named owner, a refresh date and a statement of how the figure was calculated. When an evaluator or challenger asks how a number was derived, the supplier should be able to answer within a day, not a week.

The library is also a commercial tool outside bids. It supports pipeline qualification, because a supplier that knows its strengths can decide quickly whether a notice fits. It supports buyer engagement, because a concise evidence pack is more useful in a market consultation than a corporate brochure. And it supports contract management, because the same data feeds the KPI reporting the Act requires.

What to do: appoint an owner for bid evidence, normally in commercial operations rather than bid writing, and review it quarterly. Score the last five lost bids against the library to identify gaps. Then set a target to close the largest gap each quarter. Over a year, the supplier moves from reacting to notices to shaping its position in the market before they appear.

Finally, both sides should plan for the Act to be refined. Guidance, platform features and data quality are still developing, as the gaps in direct award and SME reporting show. Organisations that build their own measurement now, rather than waiting for official data, will be able to respond quickly when requirements change. The practical test of readiness is not whether you have read the Act but whether you can show, with your own figures, how your buying or bidding has changed since February 2025.

Karter McKinley's Commercial Growth and Sales Execution service helps suppliers build the pipeline qualification process, bid evidence library and KPI proposals described here, and helps buyers' commercial teams design evaluation criteria and contract management routines. This article is general information, not legal advice.