The Procurement Act 2023 (the Act) comes into force on 28 October 2024. In this insight we detail the key areas of concern for Finance Directors preparing for the implementation of the Act.

Planning ahead – pipeline notices

The Act encourages forward planning and transparency. It envisages a “chain” of public notices, starting by informing the market of contracts which the organisation expects to procure and continuing throughout the procurement process and the life of the contract.

This begins with a new “Pipeline Notice”, which will be mandatory, where the organisation pays more than £100m under relevant contracts in the coming financial year. This includes any contracts for the purchase of goods, services or works (and not just those over the procurement threshold for a compliant procurement process under the Act).

Treasury teams will need to ensure they have visibility of expenditure across all contracts awarded by the organisation to assess if this £100m threshold is met. The notice must then detail all contracts with a value over £2m which the organisation intends to advertise by a tender notice (or transparency notice if you directly award the contract) in the next 18 months.

The first pipeline notices will look at expenditure in the financial year 1 April 2025 – 31 March 2026 and (where triggered) must be published no later than 26 May 2025 (covering the period from 1 April 2025 to 30 September 2026).

Value for Money

The objective of “value for money” must be considered throughout the procurement process. When evaluating tenders, organisations will need to identify the “most advantageous tender”. Under the current regime this is the “most economically advantageous tender”. The removal of the reference to “economically” is subtle, but it reinforces this objective, removing the focus on price.

Treasury teams need to consider what “value for money” looks like for their organisation and how to assess this in procurements, including considering factors such as social value and whole life costings.

Financial Data

Treasury teams will need robust data around expenditure and payments due to a new requirement to publish “payment compliance notices” every six months, showing compliance with the required 30 day payment terms for public contracts (over-threshold contracts). This notice will include a statement from the director/officer responsible for the organisation’s finances confirming that they approve the notice.

In addition quarterly information must be published about any payments over £30k under a public contract. 

Resources & Skills

Finance Directors should consider the resources and skills needed for implementation of the Act. The drive for transparency will increase the administrative burden on procurement and finance/treasury teams. In addition, procurement teams / contract managers may need skills training. Negotiation will likely become more prevalent as the Act allows increased flexibility to build this into procurement processes and contract management will become more visible with the requirement to set and publish key performance indicators and performance information for higher value contracts.

How Capsticks can help

Capsticks acts for both contracting authorities and bidders. With extensive knowledge of procurement law, our specialist team are always on hand to support you with all aspects of the procurement process and how to get ready for the new Procurement Act.

Please speak to Katrina Day or Mary Mundy to find out more about how Capsticks can help.