The Procurement Act 2023: A success or lip service which hinders the UK’s SMEs from accessing large government contracts?

The move away from the single market, and the subsequent the launch of The Procurement Act 2023 on 24th February 2025, has allowed the government to shape its own procurement regulations. So, what do these reforms look like and, more importantly, are they a success or lip service which hinders the UK’s SMEs from accessing large government contracts? 

The British government has reset the UK’s approach to public sector procurement by drawing its 5-year review and reform of procurement regulations to a close. The regulations launched last month aim to:

• Deliver value for money.

• Maximise public benefit.

• Share information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions.

• Act and be seen to act with integrity. 

The proposal can be reduced to two good principals: reforming the approach and introducing innovation. Let’s look at these in turn. 

Reforming the approach

SMEs have long struggled to gain access to the lucrative government contracts. High barriers to entry for frameworks and submissions, the time and effort needed for each submission and the stack of case studies needed to supplement the bid all combine to create the perfect ecosystem for the government to continue to ‘confidently’ buy from the “big boys”.  

The introduction of the Central Digital Platform (CDP) begins a centralised data journey that should decrease the opacity of the government's procurement of services. The platform (like, but an improvement on, the existing Find a Tender Service) will be the single source for all pipeline and notices published across the government's portfolio. The one touch registration for suppliers means reduced overhead as their responses will be partially prepopulated.  

The CDP pipeline view will come online 1st April 2025 and eventually will show all planned procurement events (if it adheres to certain conditions). It is these T&Cs which could be less than helpful to SMEs; a minimum spend threshold for contracts to be shown on the CDP, the need to register before getting access and the need to show proof of required insurances upon contract award rather than during bidding. This latter point will slow down award and potentially create real problems if the insurances can’t be achieved, affecting the government function the service is being procured for. 

The CDP will be a great pipeline management tool for suppliers and will be the single source of the truth for all notices including pre-market engagement. There is also a requirement on public bodies to provide increased communications and detailed assessment information. Whilst this addresses the ‘quiet period’ concerns raised during consultation, it is the first point where we begin to see increased workload on already stretched Commercial & Procurement (C&P) resources, potentially limiting the success of the changes.  

Introduce innovation

The regulations see the addition of two key changes that aim to drive innovation. A move from Most Economically Advantageous Tender (MEAT) to the Most Advantageous Tender (MAT) and the introduction of Competitive Flexible tenders. MEAT to MAT aims to widen the approach to finding the best solution and appear less prescriptive around cost and quality, instead offering greater freedom to take account of things like sustainability and innovation.  

The introduction of Competitive Flexible tenders is a positive - even in a landscape of heavy frameworks (especially as the government opens the frameworks to prevent lock out) - although it is somewhat radical in a heavily policed, process-driven world. The government states that, whilst not suitable for all procurements, Competitive Flexible tendering will include innovation such as: 

• Commercial dialogue 

• Negotiation / Best And Final Offer 

• Site visits / supplier presentations / product demos 

• eAuctions 

• Variant Tenders against requirements 

And the process could potentially further reduce barriers to entry for SMEs and charities if there is a move away from current case study-backed methodology responses. It also seems not all areas of government are aligned. At various roadshows for this change SMEs are being told to align themselves with Tier 1 / Tier 2 suppliers which: hides the innovative SME suppliers from view during the process; restricts the success and profitability for SMEs; and ensures those who always have gotten these contracts will continue to get them. It does not create the diversified supplier base the government is looking for. 

The devolved authority and empowerment of C&P teams shows real trust in these functions; however, the introduction of flexibility will only add to the workload due to the lack of formulaic prescription the teams are used to. The oversight needed for introducing the innovations will, most likely, swamp the C&P functions with even more work and so unless specifically told not to, they will most likely drift towards the safety of frameworks and not embrace the freedom certain points of these changes offer. The increase of correspondence adds more weight to the forming and dissemination of the communications. The increased overheads for the C&P departments, plus adding extra steps to the process, will really limit the effectiveness of the changes.  

In summary, this is an interesting first step that could be an improvement on the status quo for introducing innovation into the public sector procurement processes. It remains to be seen whether all, some or any of the SMEs, that currently struggle to get a foothold in these long-term public-sector procurements, will benefit or whether they will continue in the shadow of those known suppliers that are currently failing to set the world alight.  

The devolved authority could have been the catalyst to empower innovation across the public sector. However, by only adding to the commercial function's workload, it will more likely be a control leakage and the increased workload ‘straw’ that breaks the camel's back. In the wider context of the UK, if these changes fail to deliver what they are supposed to it will be the civil service employees who suffer, and the country will slip further behind our contemporaries.