**London**: The implementation of the Procurement Act 2023 introduces extensive reforms to enhance transparency and accountability in public procurement, creating more opportunities for small contractors and mandating 30-day payment terms, key performance indicators, and quarterly reporting on significant payments.
A significant overhaul of procurement laws has officially commenced today with the implementation of the Procurement Act 2023, marking the most extensive changes to the procurement landscape in over three decades. The new legislation aims to enhance transparency regarding contract awards and contractor performance, while simultaneously creating more opportunities for small contractors to enter public sector supply chains.
Key features of the Procurement Act include the introduction of mandatory 30-day payment terms throughout the public sector supply chain, a move that is expected to facilitate smoother financial transactions for contractors involved in public contracts.
The Act enables public sector contracting authorities to adopt a new framework for awarding contracts based on the most advantageous tender (MAT), as opposed to the previously used most advantageous economical tender (MEAT). This shift allows authorities to consider additional criteria, such as social value and environmental impact, when evaluating tenders.
For contracts valued over £5 million, contracting authorities are now mandated to establish and publish at least three key performance indicators (KPIs) to assess both the awarding and the ongoing delivery of the contract. Following this, they are required to produce an annual assessment of performance against these KPIs throughout the duration of the contract.
The new regulations also compel contracting authorities to issue public notices in cases of unsatisfactory performance or contract breaches, which must include specifics regarding any contract terminations, damages awarded, or settlement agreements reached. In instances of serious performance failure, firms may find themselves listed on a debarment register, which will be accessible on a central digital platform.
Additionally, public clients are now obliged to publish quarterly reports detailing any individual payments that exceed £30,000 related to public contracts. This level of disclosure is anticipated to contribute further to the transparency of public spending.
Authorities have been encouraged to consider strategies to support small and medium-sized enterprises (SMEs) by dividing larger projects into smaller lots, thereby affording specialist SMEs the chance to bid directly for contracts.
It is important to note that existing frameworks and contracts awarded prior to the enactment of the Procurement Act will continue in effect until they expire or until the designated cut-off date of February 23, 2029.
The comprehensive changes introduced by the Procurement Act 2023 signify a pivotal shift in the UK’s public procurement system, aiming to balance the scales for smaller contractors and instil greater accountability within the public sector supply chain.
Source: Noah Wire Services
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