Government delays Procurement Act commencement date by four months

The Cabinet Office has said the commencement of the Procurement Act 2023 will be delayed by four months from the original go-live date of October 2024 to allow time for a new National Procurement Policy Statement (NPPS) to be produced.

It added that the NPPS laid by the previous administration, and which would have come into force with the Act, will be withdrawn.

The Cabinet Office said the NPPS, which sets out the Government's strategic policy priorities for public procurement, is an "essential element" of the Procurement Act.

It said that it is "crucial that the new regime commences with a statutory NPPS aligned to the new Government's priorities".

The announcement continued: "In order to achieve this, work will now begin on a new NPPS.

"This will create a mission-led procurement regime which builds on the transformative powers within the Act, and which meets the challenge of applying the full potential of public procurement to deliver value for money, economic growth and social value."

Once drafted, the Government will put the new document out for consultation before embarking on a 40-day passage through Parliament.

The Government said the work will be completed by February 2025.

It noted added that any contracting authorities that have planned on commencing a procurement between October and February under the Act will need to make a decision whether to proceed with the planned timetable and procure under the existing regulations or to delay the start of the procurement in order to be regulated by the Act.

It said: "Contracting authorities who wish to extend an existing contract to cover the gap between the contract award date based on an October 2024-February 2025 procurement commencement and a later contract award date due to the delay to go-live of the Act should consider the terms of their existing contracts and whether an extension is possible under existing procurement regulations."

For contracting authorities on frameworks that are due to expire between 28 October 2024 and 24 February 2025, the Government said: "For those frameworks that are expiring in early 2025 it would have been possible to re-compete in time under the Act if a tender had been issued in November 2024." 

In this circumstance, the Government said the contracting authority has two options:

• To extend the existing framework where the framework allows and delay the re-procurement until after the new go-live date in February 2025.
• Go to market using existing legislation, advertising on Find a Tender service as normal.

Suppliers who are meanwhile preparing to bid for a place on a framework that was about to be commenced under the Act should speak to the relevant contracting authority to understand how their plans have changed.

Louise Bennett, senior associate specialising in public procurement at Browne Jacobson, said: “A four-month delay to the implementation of the Procurement Act gives much-needed breathing space to public authorities, a large number of which understandably weren’t ready for the significant changes it brings due to the late arrival of statutory guidance.

“This legislation will fundamentally transform how the public sector purchases goods and services, with an overarching principle of ensuring it delivers value for money, maximises public benefit and acts with integrity throughout a procurement exercise that should also continue to focus on equal treatment to bidders."

She added: “It places a greater emphasis on transparency, supplier performance and non-financial criteria such as quality, local job creation and environmental impact.

“This requires public authorities to review procedures and skillsets within their organisation before the Act comes into force, while contract management should be top of the ongoing strategic considerations in order to run smooth procurement exercises.

“They would be wise to use the extra time afforded by the government to ensure they are up to speed on the new regulations and have everything in place so they are now ready from 24 February next year.”

Adam Carey