The Procurement Act 2023 brings sweeping reforms to raise transparency around contract awards and contractor performance while also making it easier for small contractors to access public sector supply chains.

The Act introduces mandatory 30-day payment terms throughout the public sector supply chain.

Public sector contracting authorities can now base awards on most advantageous tender (MAT) rather than most advantageous economical tender (MEAT).

This will allow factors like social value and environmental performance to play a more significant part in tender award decisions.

On tenders, if a contract is worth more than £5m, contracting authorities must set and publish at least three key performance indicators by which to judge awards and future delivery performance.

Public sector clients will then assess and publish performance against these KPIs at least every 12 months during a contract’s term.

Contracting authorities will also have to publish public notices in cases of unsatisfactory performance or breach of contract, including details of any contract termination, award of damages or settlement agreement.

Firms that seriously fail to perform will be placed on a debarment register housed on a central digital platform.

Public clients are also now expected to publish quarterly reports on any individual payments over £30,000 under a public contract.

There will be an onus on encouraging SMEs to bid for work, for example by breaking large projects into smaller lots. This will allow specialist SMEs the opportunity to bid directly.

As part of the staggered implementation process, all existing frameworks and contracts awarded prior to the Act’s introduction will remain in force until they expire or until February 23, 2029.

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