The Procurement Act 2023 introduces the most significant changes to public sector procurement in over 30 years, with new rules designed to increase transparency, improve contractor performance monitoring, and create better access for SMEs within public sector supply chains.

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Faster Payments and Improved Contractor Access

One of the most impactful changes is the mandatory 30-day payment terms across the public sector supply chain, ensuring that contractors—particularly SMEs—receive faster payments to improve cash flow and financial stability.

Public sector clients must now award contracts based on the Most Advantageous Tender (MAT) rather than the previous Most Economically Advantageous Tender (MEAT). This means that beyond cost considerations, factors such as social value, sustainability, and environmental impact will play a bigger role in tender decisions.

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Stronger Performance Monitoring and Accountability

For contracts exceeding £5 million, contracting authorities must establish and publish at least three key performance indicators (KPIs) to assess contractor performance. These KPIs must be tracked and reported on annually, ensuring continuous monitoring and accountability.

Contracting authorities must also publicly disclose any cases of unsatisfactory performance, breaches of contract, contract terminations, damage awards, or settlement agreements. Poor-performing firms may be added to a debarment register, a centralised digital platform that will prevent them from securing further public contracts.

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Transparency in Public Sector Spending

The Act requires public sector bodies to publish quarterly reports detailing all individual payments over £30,000 made under public contracts. This aims to increase transparency and allow contractors to monitor financial flows within the supply chain.

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Greater Opportunities for SMEs and Specialist Contractors

A key focus of the reforms is opening up greater opportunities for SMEs by encouraging contracting authorities to break down large contracts into smaller, more accessible lots. This enables specialist subcontractors to bid directly, rather than relying on larger main contractors to filter down opportunities.

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Transition Period and Existing Contracts

The new rules will be phased in over time. Any existing frameworks and contracts awarded before the Act's introduction will remain in force until their natural expiry or until February 23, 2029.

These changes mark a major shift in how public sector contracts are awarded and managed, with a stronger emphasis on fair competition, accountability, and improved access for smaller businesses in the construction sector.

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Unlock More Public Sector Opportunities with Saint Global

Navigating the new Procurement Act 2023 can be complex, but with the right strategy, your business can thrive in the evolving public sector landscape. At Saint Global, we specialise in helping construction firms, contractors, and SMEs win high-value public sector contracts, streamline bidding processes, and stay compliant with the latest procurement regulations.

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Whether you need guidance on tendering strategies, compliance, performance monitoring, or SME-friendly contract opportunities, we have the expertise to position your business for success.

🔹 Optimise your procurement strategy
🔹 Win more public sector contracts
🔹 Ensure compliance and performance tracking
🔹 Leverage SME-friendly bidding opportunities

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Don’t miss out on the opportunities the new procurement laws bring! Get in touch with Saint Global today and let’s build a stronger, more competitive future for your business.

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📩 Book a consultation today!

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1. What is the Procurement Act 2023?

The Procurement Act 2023 is a major overhaul of public sector procurement laws, introducing greater transparency, improved contractor performance monitoring, and enhanced access for SMEs. It replaces outdated procurement rules and aims to create a fairer, more competitive process for awarding public contracts.

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2. When does the Procurement Act 2023 come into effect?

The Act officially comes into force on March 3, 2025, with a phased implementation period. Existing contracts and frameworks signed before its introduction will remain valid until their natural expiry or until February 23, 2029.

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3. How does the Act improve payment terms for contractors?

The Act mandates 30-day payment terms across the entire public sector supply chain. This ensures that subcontractors, including SMEs, receive timely payments, improving cash flow and financial stability.

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4. What is the difference between Most Advantageous Tender (MAT) and Most Economically Advantageous Tender (MEAT)?

Under the new Act, Most Advantageous Tender (MAT) replaces Most Economically Advantageous Tender (MEAT) as the basis for awarding contracts. This means public sector clients will now consider factors like:

• Social value (e.g., community impact)
• Environmental performance (e.g., sustainability initiatives)
• Innovation and quality alongside cost considerations

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5. How will contractor performance be monitored?

For public contracts worth over £5 million, contracting authorities must:

• Define and publish at least three Key Performance Indicators (KPIs) to measure performance.
• Assess and publish performance reports annually throughout the contract’s duration.
• Disclose any breaches, terminations, or settlements in cases of poor performance.

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6. What happens to firms that fail to meet performance standards?

Firms with serious or repeated performance failures may be added to a debarment register—a centralised digital platform that prevents them from securing future public contracts.

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7. How does the Act increase transparency in public sector spending?

Public bodies must now publish quarterly reports on all individual payments over £30,000 under public contracts. This ensures greater visibility into how public money is spent.

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8. How does the Act support SMEs and specialist contractors?

To encourage SME participation, public sector clients are expected to:

• Break large contracts into smaller lots where feasible.
• Make it easier for specialist subcontractors to bid directly for work.
• Reduce administrative barriers that often prevent SMEs from accessing public sector projects.

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9. Does the Act apply to existing contracts?

No. Any contracts or frameworks awarded before the Act’s introduction will remain valid until they expire or until February 23, 2029, whichever comes first.

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10. Where can contractors find more information about the changes?

Contractors can visit official government procurement websites or consult industry bodies for guidance on how the Procurement Act 2023 affects bidding, payments, and compliance.

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