Procurement Act 2023: What you need to know and how to prepare

Overview of the changes

The implementation of the Act is set to profoundly impact the procurement sector, introducing a new set of objectives and additional compliance requirements. These changes mark a departure from the old EU-derived regulations, creating potential uncertainty for Contracting Authorities, particularly regarding the applicability of previous case law.

The EU-derived objectives of procurement focused on transparency, non-discrimination, and equal treatment. In contrast, the Act introduces new objectives, including delivering value for money, maximising public benefit, maintaining transparency and acting with integrity. The Act allows Contracting Authorities to treat suppliers differently, as long as it does not create an unfair advantage or disadvantage. There is also an obligation to consider and remove barriers faced by small and medium-sized enterprises (SMEs) to ensure a more inclusive procurement process.

While these changes aim to improve procurement practices, they also create uncertainty, as existing case law developed under the old objectives may no longer apply.

Managing the transition: Our recommendations

The new objectives of the Act replace those under the previous regime, which means existing case law on procurement is likely to be reinterpreted. This creates an immediate risk of procurement processes being challenged and potentially invalidated. In the absence of new case law, it will be difficult to assess the success of claims made during the procurement process.

A key challenge will be providing evidence to demonstrate that decisions are consistent with the Act. To manage these risks, we suggest:

1. Thorough documentation
   Ensure all decisions, especially those relying on the discretion to differentiate between suppliers as allowed by the Act, are clearly documented in advance and supported within the Contracting Authority, including a legal review if required.
2. Comprehensive coverage
   Extend documentation to include all mandatory considerations, such as those related to SMEs.
3. Proactive supplier communication
   Communicate relevant aspects of the procurement objectives with suppliers in advance. For example, clearly stating the objective of maximising public benefit during market engagement can incentivise appropriate suppliers to remain engaged, provide transparency as a defence against challenges, allow suppliers to raise concerns early, and start the challenge time limits sooner.

While the Act introduces new objectives and grants greater discretion, it also increases risks due to uncertainty and additional mandatory steps. The inconsistency of the new objectives with previous EU-derived objectives means that existing case law is unlikely to apply. Until new case law emerges, additional care should be taken to handle the risks created by the Act objectives.

How we can help

We’re well-versed in the intricacies of the Act and are equipped to guide your organisation through these changes. Our expertise ensures you can align with the new objectives while mitigating risks effectively.

Find out more about how we can assist your organisation in navigating the new Procurement Act, ensuring compliance, and minimising risks: