The go-live date for the Procurement Act 2023 has been pushed back four months to the 24th of February, 2025. The new Labour government made the decision so they could revise the National Procurement Policy Statement (NPPS), giving it more punch and ensuring it’s more in line with its vision rather than the Conservatives.
The delay, however, isn’t time to take a breather until the ball is rolling again. Contracting authorities and suppliers should continue preparing for the new procurement regime reforms in 2025 so they aren’t caught napping when the new rules transforming public procurement come into play.
Suppliers can use the extra time to develop new procurement strategies that will give them an edge over their competitors. With more businesses, especially SMEs, expected to participate in public sector procurement, every inch gained is invaluable.
We’re going to look at how suppliers can leverage the procurement reforms to capture their share of the public sector procurement market.
Key Changes to Expect in 2025
The Act introduces three significant public sector procurement changes to the market.
1) Focusing on overall value (Most Advantageous Tender – MAT) rather than price (Most Economically Advantageous Tender – MEAT).
2) Emphasis on transparency
3) Mandatory social value
Let’s look at each in turn.
MAT vs MEAT
The change from MEAT to MAT is significant because it levels the playing field and enables SMEs and charitable organisations to compete against larger, more experienced business and social enterprises, for government contracts.
The current procurement landscape is price-focused. The lower the better. This suits big businesses because they can afford to go low without it impacting their bottom line. Small businesses are more vulnerable. They can’t afford to go low without sacrificing profit.
However, when overall value comes into play, SMEs are well positioned to provide niche services that perfectly meet contracting authorities’ needs. They’re more flexible and can adjust quickly to change, and they tend to be quick to innovate to provide unique, cost-effective solutions.
Transparency
Transparency is important for all players in public procurement to ensure fairness, openness, and integrity.
Transparency reduces the scope of fraud and corruption among contracting authorities, but it also enables buyers to identify potential fraud and corruption among suppliers. It makes it easier to identify opportunities for collaboration while enabling them to detect poor supplier performance.
Suppliers benefit from more accessible tender opportunities, while transparent communication facilitates informed decision-making and helps establish open relationships with buyers.
Transparency is also important from society’s perspective because it holds buyers and suppliers accountable for spending taxpayers’ money.
Transparent notices
Under the new Act, government buyers must publish several notices throughout the contract lifecycle to ensure transparency every step of the way. The notices provide information that makes it easier for suppliers to develop long-term strategies to deliver contracts and prepare for upcoming tenders.
For example, pipeline notices are like advertisements for all upcoming contracts over 18 months. Suppliers can see which contracts are most relevant to their business and choose which ones they want to bid on. This gives them plenty of time to prepare their bid submissions.
Additional notices include:
- Pre-market engagement invites buyers and suppliers to begin early discussions regarding tenders. Because the process is transparent, all interested suppliers are included in discussions, so you can scope out the competition and launch a preemptive strike, as it were.
- Supplier KPI performance notices in which buyers rate suppliers from “Inadequate” to “Good.” You can learn about buyers’ preferences and use the information to create bids that immediately catch the eye.
- Contract termination notices when contracts reach their natural end or are terminated early. Depending on the reason for termination, there could be opportunities if it’s retendered.
Social Value & Sustainability
According to existing procurement rules and existing legislation, social value isn’t mandatory. The Procurement Act 2023 changes that. Social value is now compulsory and carries a weighting of at least 10% in the final decision.
What is social value in procurement?
It’s value that doesn’t contribute directly to the success of a project but has a positive impact on local communities. It can be social, economic, or environmental. For example, upgrading a job centre, running a development programme for local youths, or using recycled packaging material.
The advantage of environmental projects, especially sustainability projects, is that they contribute to suppliers’ and buyers’ net zero goals and ultimately bring the country close to its ambitious goal to reach national net zero by 2050.
Suppliers with established sustainability credentials are likely to be favoured if their business offerings are on a par with their closest competitors.
Strategic Adaptations for Businesses
Strategies that work pre-Procurement Act 2023 are unlikely to be as successful when the new procurement regulations kick in. So, take the opportunity to revise and update your government tender strategies so they align with the new regime.
Consider the following opportunities to set yourself up for early success in 2025.
Enhancing Visibility and Relationships with Government Buyers
The best strategy is one which puts you in front of the right contracting authorities at the right time. Public sector marketing is a great solution because it uses research and other data to develop campaigns that enable you to stand out amongst your competitors.
The next step is to begin and nurture relationships with buyers whose needs match your goods or services. Marketing companies can often provide valuable advice and guidance to help you strike the right tone with your targeted public sector bodies.
You want to establish long-term relationships so you must lay a foundation of mutual respect and trust. Once you’ve got a few healthy relationships going, growth becomes organic and your network widens naturally.
Incorporating Technology and eProcurement Tools for Smoother Processes
One of the country’s procurement priorities not included in the new Procurement Act or any procurement reforms is digital transformation. The public sector was a little slow on the uptake when it came to embracing new technology but the process is gaining momentum, especially transforming public procurement programme, as the benefits become more obvious.
AI tech, for instance, automates a lot of routine procurement processes for buyers and suppliers. This saves time and money and increases operational efficiency as staff can focus on more critical processes.
eTendering has become the norm as platforms become more sophisticated and provide more than tender-matching. They serve as a central digital platform where stakeholders can communicate, collaborate, and innovate in complete transparency.
They store suppliers’ details, templates, and supporting documents and because all interactions are recorded, they provide an audit trail to prevent or settle any disputes. Data is updated and accessible in real time for immediate and informed decision-making. Suppliers can quickly capitalise on opportunities as they arise and avoid or mitigate risks as soon as they appear on the horizon.
Tech and procurement compliance in 2025
Many tendering platforms have systems that ensure buyers and suppliers comply with industry regulations, as well as regulations on a central and local government level.
This helps suppliers avoid penalties for non-compliance, especially during the early stages of the new Procurement Act, when everyone is still feeling their way around the correct procedures.
Early Engagement: The Key to Success in 2025
Early engagement in public procurement is now highly recommended as the benefits it provides to both sides are enormous.
One of the key benefits is collaboration that nails down details like resources required and realistic timelines. It’s a great way to discuss costs, risks, and challenges and engage in creative problem-solving.
Early engagement opens the floor to conversations on value, including social value and sustainability, encourages innovative ideas, and constructive feedback, and importantly, lays the foundations for good long-term working relationships.
Get A Head Start With Thorough Market Research
Looking at it, there’s quite a lot to wrap your head around before the 24th of February 2025 rolls round. It’s comforting to know that you aren’t alone. All suppliers are in the same boat and while experience can help, new entrants without any habits or existing processes, might be at an advantage.
They can increase their advantage by using a public procurement marketing agency to manage one of the most time and labour-intensive processes: Market research.
You come to grips with the upcoming rules governing public procurement reforms while your marketing agency gathers all the information you’ll need to launch your journey into public procurement.
Cadence Marketing specialises in the public sector and provides a range of services to help set you up for success. Contact us to arrange a free consultation and use our expertise to navigate the interesting waters of 2025.
