Finance & Procurement
A guide to public sector procurement in 2023
A guide to public sector procurement in 2023
2023 marks a significant year for public sector procurement
A new Procurement Bill to transform existing procurement rules is making its way through Parliament and is now in the final reporting stage.
Since we have left the EU, the new regulations will no longer be based on transposed EU Directives. Instead, the new public sector procurement playbook promises to streamline and simplify processes for buyers and suppliers alike. A key aim is to make selling to the public sector easier and more accessible for SMEs.
This quick-read public sector procurement guide provides a whistlestop tour of the existing system and explains how it will change in 2023.
What is public procurement?
When public sector bodies, government departments or central government buy goods, works or services, it is public procurement. Essentially, it is the buying process in the public sector.
Unlike in the private sector, the buying process in the public sector is relatively complex, as many directives, regulations, and policies shape it. The public sector is also vast; it includes many bodies and organisations, from hospitals and schools to central government, police forces and universities.
As you can imagine, a colossal range of items, goods and services are purchased by the public sector, from office chairs, telecommunications equipment, hospital beds and military equipment, to works such as road building and maintenance, building hospitals and carrying out other major infrastructure projects. In addition, service procurement includes adult social care, waste management, and IT development and support.
As a supplier, meeting public sector needs has been traditionally complex as requirements go beyond the specific challenge the department or body is trying to address. For example, public procurement must offer value for money, support enterprise and growth, promote transparency, and support broader government policy. As a result, there are a lot of boxes to tick, and this has made routes in traditionally complex.
That’s why it’s vital organisations who wish to market and sell to the public sector fully understand how the public procurement system works. A simple oversight on a bid could jeopardise your chances of success and winning a contract.
It is essential to keep up to date with government procurement policies, especially with a new regime on the horizon. More on current public sector procurement guidelines can be found on the government’s website here.
But here’s a quick overview.
How does public sector procurement work?
Currently, there are several pathways for selling into the public sector. The process is complex, and it can be off-putting if you aren’t familiar with it. Navigating the existing procurement system is time-consuming, so this has been a challenge for smaller businesses.
Currently, procurement channels depend on the value of the contract and what is being sold. These mechanisms include the Digital Marketplace, Contracts Finder and Find a Tender. Local councils can also award contracts directly to suppliers without putting them out to tender if the procurement value is less than £10,000.
Much of the current procurement regime is administered through frameworks overseen by the Crown Commercial Service. The frameworks enable public sector buyers to procure goods and services from pre-approved suppliers, with terms and conditions and legal protections already agreed upon. Frameworks are umbrella agreements that set out terms, such as price, quality and quantity. Individual contracts are awarded during the agreement period (usually a maximum of four years). Suppliers bid to get onto a framework, but being on one doesn’t guarantee a contract.
As you can see, the complexities of public sector procurement are laid bare just in these few short paragraphs!
But don’t worry; public sector procurement is about to change.
How is public sector procurement changing in 2023?
The government’s procurement bill sets out a new ‘Transforming Public Procurement Programme’. It changes how public procurement is regulated to save taxpayer money and drive social, environmental, and economic benefits across the UK. The aim is to simplify and amalgamate processes, reduce bureaucracy, make it fairer for buyers and suppliers, improve transparency and support innovation.
In response to the consultation on transforming procurement, the government stated:
“The new regime will be simpler, fairer, more flexible and competitive and will be one of the most transparent regimes in the world. It will make it easier for small businesses and social enterprises to win public sector contracts. It will support innovation and reduce costs for both suppliers and the public sector.”
So, how will the public sector procurement changes be achieved?
The three most significant forthcoming changes to public sector procurement are:
The introduction of a single new regulatory framework will replace the four existing sets of public regulations (the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011).
A streamlining of the procurement regime into a single system, meaning suppliers only register and provide core credentials in one place. The single transparency platform will also enable suppliers to see opportunities more easily.
More flexibility and freedom for public sector procurement professionals to talk to suppliers much earlier on and continue to do so throughout the procurement process. This will enable procurement officials to share problems and speak with suppliers to explore innovative solutions and drive the best possible outcomes.
The new procurement regime will take greater account of social value, help communities recover from the pandemic, and support the transition to Net Zero.
Practically, existing competitive procedures will be consolidated into two routes.
Two main routes for public sector procurement 2023
The new public sector procurement process will be administered via two main types of tenders – open and restricted. For open tenders, interested parties will be invited to submit bids by a set date. Tenders will then be evaluated, and contracts will be awarded to the winning bidders.
In restricted tenders, there is an initial filtering stage where potential suppliers complete a pre-qualification questionnaire. Suppliers who make the shortlist then follow the open tender procedure.
Finally, a third procedure is covered in the regulatory changes, which will only be adopted in times of crisis. This will enable limited tendering without using the competitive process to expedite public sector procurement quickly in emergencies (such as in a future pandemic, for example).
Opportunities for public sector contracts will be advertised via a contract notice on the commissioning or contracts portals. A contract notice includes information such as contract value, the specific nature of the requirement, the tendering procedure to be followed, and criteria the supplier will need to fulfill.
A new Procurement Review Unit (PRU) is being set up to focus on non-compliance.
How will the new procurement changes be implemented?
The government will be rolling out a learning and development programme for the new procurement rules, offering traditional and digital guidance to all those operating within the new regime (buyers and suppliers). Overseen by the government’s commercial function, this will include knowledge-drop webinars, self-guided e-learning, deep-dive webinars, and communities of support to reflect on new knowledge and share best practices.
Why sell to the public sector?
There has never been a better time to consider selling your solutions, goods or services to the public sector because procurement processes are about to get much more straightforward. For example, there will be much greater visibility of upcoming contracts, giving suppliers a much better timeline for gearing up to prepare for the bid and potential delivery should they secure the contract. And new rules about pre-market engagement will enable procurement officials to explore more innovative solutions than before.
The public sector is such a large market – worth approximately £300 billion each year – so it offers excellent potential for securing steady and lucrative contracts. Winning a public sector contract also raises awareness about your organisation in the wider business community and acts as an endorsement for your brand.
Where can I meet public sector leaders?
The easiest way to connect with public sector leaders is at events. Every year, GovNet delivers over 650 conferences, exhibitions and training courses that address the key obstacles facing the public sector. GovNet’s events decision-makers and solution providers across various sectors, including Education, Healthcare, Technology, Sustainability, Procurement, and more.
To learn more about marketing and selling to the public sector in 2023, download our FREE whitepaper here.