Procurement Act 2023

The Procurement Act 2023 (PA 23) will come into force on 24th February 2025. It will be supported by additional Regulations and Cabinet Office guidance/systems but the wording of PA23 itself will form the basis of procurement regulation from that date.  In this update, CHIC is providing an overview of the changes for our members and our supply chain partners with guidance to allow you to prepare your organisation for this new procurement landscape. 

CHIC will continue to support with these changes and further updates can be expected throughout the summer as we approach the effective launch date.

We recommend that you consider the contents of this update and consider how the matters discussed may impact on your organisation/way of working.

Background Information

As a CHIC member or supply chain partner delivering their services, you are currently governed by the Public Contracts Regulations (PCR) 2015. These regulations imported the EU Procurement Directive into UK law and when we left the EU, those regulations were amended to remain in force as a stand-alone interim solution whilst the Government consulted on and finalised PA23. Key pillars of public procurement promoted through the PCR 2015’s approach to transparency, equal treatment and proportionality are reflected and amplified in the new Act. 

Exclusion of Scottish Contracting authorities, and some specific to the devolved areas of government are outlined below. These exemptions mean that some of the more onerous reporting regimes in PA23 do not apply to all our members depending on their jurisdiction, but transparency requirements will increase.

Alongside PA23 sit several ‘exemptions’ for devolved authorities with the ones relevant to the use of CHIC’s frameworks detailed below:  

  • Welsh contracting authorities can also call off contracts from frameworks and Dynamic markets that align with the Welsh Social Partnership and Public Procurement (Wales) Act 2023.
  • Can call off below threshold contracts from CHIC Dynamic Markets
  • Exempted from publishing contract details notice for contracts >£5Million
  • Scottish contracting authorities can continue to use CHIC frameworks & DPS let under the Public Contract Regulations 2015 as this continues to apply in Scotland.
  • Even though the full provisions of the Procurement Act 2023 will extend to Scotland (Section 126 of PA 2023); its application is limited, and there will effectively be dual regulation of public procurement in Scotland.
  • Scottish buyers such as universities, local authorities, the Scottish Government and non-governmental organisations operating in Scotland in devolved areas will remain subject to the existing, EU-derived rules, including the Public Contracts (Scotland) Regulations 2015. 
  • Section 115 of the Procurement Act 2023, therefore, enables both the UK Government and the Scottish Government to make regulations amending the application of those regimes to enable the use of such framework agreements or other arrangements in relation to cross-border procurements and draft Regulations have already been prepared by the UK Government.
  • The national procurement policy statement and the Wales procurement policy statement do not apply to a procurement under a transferred Northern Ireland procurement arrangement or a transferred Northern Ireland authority (except in relation to a procurement under a reserved procurement arrangement e.g., established by CHIC).
  • The requirement to publish pipeline notices does not apply to a transferred Northern Ireland authority.
  • The requirement to publish a copy of the contract along with the contract details notice does not apply to a contract awarded by a transferred Northern Ireland authority (unless it is awarded under a reserved procurement arrangement) or under a transferred Northern Ireland procurement arrangement.
  • The requirement to publish a contract change notice (or a copy of the amended contract) or details of contract payments over £30,000 does not apply to a contract that was awarded by a transferred Northern Ireland authority (unless it is awarded under a reserved procurement arrangement or a devolved Welsh procurement arrangement) or under a transferred Northern Ireland procurement arrangement.
  • Procurement investigations do not apply to a Northern Ireland department however they may be bound by any recommendations issued.
  • Be aware that part 6 of the Procurement Act (Regulated Below – Threshold Contracts) does not apply to transferred Northern Ireland Authorities or procurements under a transferred Northern Ireland procurement arrangement.

Both the current PCR 2015 Regulations and the new PA23 set thresholds above and below which procurement / contracting activity is regulated.  These thresholds are updated every two years on the 1st of January. The current thresholds are therefore in place until 31st December 2025 and for non-central Government contracting authorities, are:

Threshold from 1st January 2024 (Excl. VAT):

  • Supplies and Services:  £179,086.67
  • Light Touch Regime: £552,950.00
  • Works: £4,477,174.17

Above these thresholds, full compliance with the current Regulations and the future Act are mandatory and cannot be avoided using an exemption/waiver process.

Added to the above is a much lower threshold of £30,000 (inc. VAT). Any contract above this much lower threshold requires a more limited compliance regime, including the publication of a contract award notice and (under the new Act) a contract termination notice. 

Something which is important for our members, however, is the aggregation rule; both the current Regulations and the new Act prevent the disaggregation of spend to avoid the rules. In simple terms, this means that for matters of ongoing spend (i.e. not individual, one-off purchases), organisation spend over a minimum four-year period needs to be estimated, and if that spend is above one of the above relevant thresholds, then the procurement process to follow needs to be that which is mandated by the Regulations/PA23.


Procurement Act Objectives

The Cabinet Office has set out an agenda for reform of wider public sector expenditure, seeking to achieve better value for money and to maximise the benefit of public sector third party spend within the UK economy. Key to this agenda is a perception that transparency of such expenditure will serve to demonstrate the degree of equal treatment and proportionality that removes barriers to tendering for public contracts.  Access to this market by SMEs is key, as is obtaining better value through public sector spend targeting strategic priorities.

The UK’s economic strategic priorities are set out in its National Procurement Policy Statement (NPPS), a new version of which was published in mid-May 2024 and unless objected to, will go live on 28th October to complement PA23. This encompasses all aspects of Social Value but whereas the 2012 Social Value Act was not prescriptive in how Social Value could be achieved, the NPPS offers clearer guidance on what public sector bodies should be mindful of, when spending public money.

What happens on 24th February 2025?

Any procurement activity commenced up to and including 27th February 2024 (by commenced, essentially think either ‘pre-market engagement commenced’ or 'invitation to tender issued') will continue to follow the current 2015 regulations, including post-contract management of those arrangements. Any call-off contracts from existing CHIC framework agreements established prior to 28th October 2024 will equally be governed by the existing PCR 2015 rules, until their expiry. It is only brand-new procurement activity that will be regulated by PA23. This means that for several years, our members and supply chain partners will be governed by two slightly conflicting sets of procurement rules/regulations and thought will need to be given as to how this is reflected in your Finance Rules and/or Procurement Policies.


What are the key changes?

Notices

Transparency will be achieved through a new regime of published notices. For members who use the services of CHIC, whether calling off our frameworks or members using our procurement services, the systems provided by CHIC facilitate most of the current regulations requirements and we expect that this will be enhanced by improvement to CHIC eSourcing, our in-house eProcurement portal for the new PA23.

With the longstanding requirement to conduct procurement activity electronically, our members should be using eSenders (electronic procurement) platforms for their above-threshold tendering activities, such as eSourcing (used by CHIC). It has been promised by the Government, working with UK eSenders, that all commercial platforms will provide the functionality you require, though they will not be automated and will need your intervention to process and issue the required notices.

In the table below is a summary of the new notices’ regime, with notes where CHIC Procurement considers that requirements for compliance may be more limited for most of our members. The table is divided into the three stages of the procurement lifecycle — procurement planning, procurement, and contract management. We have flagged where the notice is mandatory or optional for below-Threshold contracts; otherwise, the notices only apply to above-Threshold procurement/contracting activity.

For members based in either Wales or Northern Ireland, certain notices will not be required but will be replaced by a similar internal reporting mechanism to the devolved assemblies and so preparation for the issue of notices is still required in practice.

What does this mean for our members?

The CHIC procurement function is preparing for the changes which come into effect on 24th February 2025. The housing sector will come under closer scrutiny from both central Government and the wider supply market.  Systems and procedures, rules and regulations will need to be reviewed and those in a procurement role, finance colleagues and budget holders will need to be briefed and trained.

The Cabinet Office has a dedicated webpage — Transforming Public Procurement – which contains information and links to resources which will support your organisation and colleagues to prepare.  Members who access our framework agreements or use our procurement consultancy services will be supported through this process, but the emphasis must be on ownership from the leadership team down, if you are to successfully transition to the provisions of the new Act.

The key resources available to you now, comprise of the (following:

Knowledge drops for senior leadership and heads of service, providing an overview of the new Act.  It includes overviews of PA23 for suppliers, so can be shared with your supplier base.

Comprising a series of ten modules for those on the procurement coalface and which provides more in-depth knowledge of the provisions of the new Act. The CHIC Procurement  team have all completed the Advanced Practitioner training and can assist with this eLearning.

Guidance which is being drip-fed from the Cabinet Office to support the transition to the new Act.

CHIC Procurement have completed a number of lunchtime byte size sessions which can be viewed here (Links to Pdf presentation to be inserted)


What will CHIC be doing?

The CHIC Procurement Team is preparing for these changes, to make sure that the Framework Agreements and new Dynamic Markets (replacing our current DPS by the effective date 24th February 2029) that we put in place to support Members with compliant, value-for-money and less time-consuming access to the markets are fit for purpose.  Colleagues across CHIC’s Member Services and Strategic Services Teams are equally preparing themselves for these changes, to best support our members with their procurement requirements.

Procurement Advice Notes (PAN) will be issued as and when there is sufficient further information to share and accessible through our website. 

Finally, the CHIC Procurement area of our website will be expanded and updated to provide a one-stop-shop resource for members to access templates and guidance notes for the key areas of the procurement function


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Contact Us

 Ade Osunsanmi – Head of Procurement

Email: [email protected]

Telephone: 0121 759 9990

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