The Procurement Act 2023 (“Procurement Act”) takes effect today (24 February 2025) and represents a changing approach for public authorities and poses both challenges and opportunities for potential suppliers. Whilst many of the changes in the Procurement Act focus on the considerations to be taken during procurement, this Article aims to focus on the new structural mechanisms introduced.

For a further review of changes introduced by the Procurement Act please see our two previous articles in this series: ‘Key Changes from the Existing Regime’; and ‘Challenges and Opportunities for Suppliers’.

Below is a comparison of the structures under the old system of public procurement and their new counterparts. In some areas these changes will simplify and streamline the process and in others they may pose a new challenge for suppliers.

Procurement Processes

Under the previous system, when conducting a procurement through a competitive process, authorities needed to use one of the following six procurement processes:

  • Open Procedure – A one stage procedure consisting of an open call for tenders, unlimited suppliers and no negotiations.
  • Restricted Procedure – Interested suppliers can submit interest but only those that qualify (at least five) are invited to tender. No negotiations.
  • Competitive Procedure (with Negotiations) – Interested suppliers can respond to an advertisement, only they are invited to tender. supplier may negotiate with the suppliers to get improved deals.
  • Competitive Dialogue – The authority invites supplier to a dialogue in which they can find a solution for the authorities needs. Final tenders are then invited based on these solutions. The award is granted to the most economically advantageous tender.
  • Innovation Partnership – A partnership with a supplier to develop a supply or product that will be purchased by the authority.
  • Competitive Procedure (without Prior Publication) – For use in strictly limited situations.

The previous mechanisms each had their merits and only sought to encourage competition and strong procurements, however, they were increasingly restrictive. The prescriptive nature limited authorities’ abilities to use their best judgement in how to best run a procurement.

The solution to this under the Procurement Act is to allow authorities to design their own procurement processes, using one of only two templates.

  • Single stage Procedure – Similar to the open procedure described above, the single stage procedure will invite tenders from an unlimited number of Suppliers. At which point the authority will have the ability to select from the tender based on the criteria.
  • Multistage Competitive Procedure – These procedures will likely resemble (at least in part) the multistage processes of the previous regime and in the short term for practical reasons this will likely be the most sensible approach. Government guidance has been issued to assist authorities in their designing of their own procedures moving forward.

This simple change of allowing authorities to design their own procurement process could mean more suitable processes and, in the long run, some innovative new approaches that find the best suppliers for their needs. On the other hand, autonomy and flexibility may create mistakes and shortcuts, so supplier will need to be ready to approach multistage competitive procurements with an open mind.

Open Frameworks

An additional structural change is the introduction of Open Frameworks. Framework Agreements allow authorities to procure goods and services from a list of pre-approved suppliers under pre-agreed terms. Under a Framework Agreement, an authority may enter into call-off contracts with suppliers for specific projects. Under the old regime, suppliers could bid for a Framework Agreement and it would be awarded to either one or multiple suppliers under a procurement process. Once awarded, the frameworks would run for a period of 1-4 years and could then be re-opened for new suppliers.

Open frameworks introduced by the Procurement Act will allow new suppliers to be added to the framework throughout its lifecycle. The open framework can run for a maximum of eight years and it must be opened at least once in the first three years. This could create the possibility for authorities to open the frameworks on an annual basis in order to have constant flexibility in relation to who they can contract with.

The addition of open frameworks comes with both opportunity and drawbacks for suppliers, for those awarded frameworks the loss of exclusivity may cause uncertainty in their plans, but for suppliers that missed out on the initial award, the opportunity to try again in a shorter timeframe could be an exciting prospect. In particular, neutral vendor suppliers that build their networks based on their place on framework agreements will need to ensure performance of their contracts to maintain their position in the market.

Central Debarment List

Suppliers that are excluded for either mandatory or discretionary grounds may be placed on the new central debarment list that could prevent suppliers from being awarded public contracts for up to 5 years. For further discussion of the central debarment list and its effects, please see our article on ‘Challenges and Opportunities for Suppliers’.

With these structural changes now in force, the shape of public procurement will likely begin to change over the next few years and suppliers will need to adjust these changing procedures to succeed. To remain effective post award, which will now be more necessary than ever for continuing work, suppliers will need a clear understanding of their commercial agreements and, where necessary, strong sub-contracts with clear performance obligations.

If you would like to discuss your businesses needs as a supplier of goods or services to public bodies, please feel free to contact the Ellisons Solicitors Commercial Team.