Procurement Act 2023 one year on: Trends and lessons learnt

It is now just over a year since the Procurement Act 2023 came into force, marking the most significant reform of UK public procurement law in a generation. One year on, it is possible to form an early view of how the new regime is operating in practice, although it remains too soon to reach firm conclusions on whether it is fully delivering on its stated aims of simplification, greater transparency and improved access for SMEs.

The picture so far is mixed. Change is happening, but cautiously.

There is now a live body of procurements being run under the new rules, with notices published and a clear statutory framework built around value for money, public benefit, transparency and integrity. However, it is still relatively early to draw firm conclusions on some of the Act’s broader promises, particularly whether it is materially improving access for SMEs, encouraging innovation, speeding up procurement or delivering better outcomes for contracting authorities and the public purse.

Some of the headline reforms have yet to reshape behaviour. Familiar structures still dominate. Risk appetite remains measured. And there is, candidly, a degree of scepticism about whether the Procurement Act 2023 has yet delivered meaningful transformation.

Transparency and direct award notices

The new regime is built around publication through the central digital platform and this new notice architecture is now operational. That means that transparency is probably the easiest stated objective to assess one year on.

There is significantly more information entering the public domain via the new notice requirements. That brings benefits. Authorities can learn from one another. Suppliers can analyse market approaches in greater detail.

But transparency also brings uncertainty. We have already seen what appears to be the first challenge brought against a direct award transparency notice under the new regime. Increased visibility inevitably increases scrutiny.

We are already seeing bidders scrutinising transparency notices in far greater detail than under the previous regime. In one case, a supplier raised pre-action correspondence within days of publication, focusing on the justification wording rather than the award itself.

Transparency is not, in itself, a problem. But it does emphasise the importance of drafting notices carefully and ensuring that justifications are properly evidenced. Under the new regime, the detail matters and it is there for all to see.

Competitive Flexible Procedure under the Procurement Act 2023

The Competitive Flexible Procedure (CFP) was intended to replace multiple legacy procedures with a single adaptable mechanism. It offers discretion. It offers structure. It offers flexibility.

Yet the open procedure is still being used more frequently.

Figures from Tussell suggest that only around 20% of procurements are currently using CFP. That proportion is likely to increase as contracts launched under the previous regime expire and authorities gain confidence in the new framework. For now, however, the open procedure remains dominant.

There is also an understandable nervousness in the market. We are advising on a number of Competitive Flexible Procedures, but there have been no published judgments under the Procurement Act 2023. Few authorities are keen to be the first to test the boundaries of the new regime in contested proceedings.

In one recent procurement we advised on, the contracting authority initially intended to use the Competitive Flexible Procedure and to incorporate some innovative steps in relation to site visits and prototypes. Ultimately, they reverted to the open procedure because internal governance teams were not yet comfortable with the perceived litigation risk of taking a less familiar approach.

With a number of cases currently progressing through the courts, we await the first judgments. From the limited publicly available detail, the cases illustrate that familiar risk areas remain.

One in particular, relating to a construction framework, involved a bidder placing eleventh out of ten by narrow scoring margins. This scenario will feel very familiar to practitioners under the previous regime. Evaluation and marginal scoring differences have always been one of the most common grounds for procurement challenge. The new Act does not remove that risk. If anything, it reinforces the importance of a robust evaluation and moderation process.

The legislation may be new, but the risk profile is not.

Robust evaluation processes, careful moderation, and clear audit trails remain critical under the Procurement Act 2023. Those fundamentals have not changed.

Framework agreements under the Procurement Act 2023

Framework agreements remain the procurement vehicle of choice for many contracting authorities. In particular, frameworks established under the previous Public Contracts Regulations 2015 regime continue to be widely used. That is not surprising.

There is limited data on the use of legacy frameworks, as no award notice is required for call-offs in many cases. But from what we are seeing in practice, they remain popular. They are familiar. They are understood. And in periods of legislative change, familiarity carries weight.

Under the Procurement Act 2023, traditional “closed” frameworks are currently proving more popular than the new “open” framework model. Open frameworks were designed to allow suppliers to join during the lifetime of the arrangement, a significant conceptual shift. Whilst we have seen some keen to take up this emerging approach, the published notices suggest that uptake has been measured.

Change in legislation does not automatically mean change in behaviour.

Dynamic Markets under the Procurement Act 2023

Dynamic Markets were presented as one of the key innovations of procurement reform. In practice, they do not appear to have taken off to any significant extent so far.

In England, the inability to make below-threshold direct awards within a Dynamic Market has reduced their perceived flexibility. In Wales, there has not been a great deal of interest either.

That may change over time. But for now, Dynamic Markets remain more theoretical than transformative within the new public procurement regime.

Debarment under the Procurement Act 2023

The debarment list was widely discussed during the passage of the Act. As matters stand, no suppliers have been added.

Whether that reflects a cautious approach or simply the time required for cases to progress remains to be seen. For now, it is a power within the Procurement Act 2023 that exists but has not yet been exercised.

Has the Procurement Act 2023 simplified public procurement?

One of the Act’s stated objectives was simplification. From a legislative drafting perspective, consolidation into a single framework is welcome.

Operationally, however, the administrative burden has increased, at least in this first year.

Several clients have commented that the volume of notices and the new terminology have required significant retraining of internal teams and, in some cases additional resource, at a time when budgets are already tight. Others are still relying heavily on existing arrangements whilst internal processes catch up with the regime. Resource constraints and uncertainty around the new requirements may also be affecting compliance with publication obligations.

The new notice regime, revised terminology and additional compliance requirements have required authorities to retrain teams and adjust internal processes. That adjustment period has been significant for many.

There is evident scepticism in some parts of the market about whether the Procurement Act 2023 is achieving its stated objectives of being simpler, transparent and more SME-friendly.

That cynicism is understandable, but it may also be premature.

Reform of this scale was never going to feel transformational in its first year. Cultural change takes longer than legislative change. Confidence takes time to build. Case law will develop. Market practice will evolve.

It also remains too early to assess whether the new regime is materially improving access for SMEs. Whilst the reforms were intended to reduce barriers to participation and increase visibility of opportunities, there is not yet enough evidence to conclude that supplier behaviour or award patterns have shifted significantly. For now, this remains one of the Act’s key ambitions rather than one of its clear demonstrated outcomes.

One year on, the Procurement Act 2023 has undoubtedly changed the legal architecture of public procurement. What it has not yet done is conclusively change market behaviour. The early signs are that transparency has increased, scrutiny has intensified and authorities are beginning to test the tools available under the new regime. Both the more ambitious aims of simplification, flexibility and improved SME access are still, for now, works in progress.

In that sense, the first year of the Act has been less about transformation and more about transition. The legislative framework may be new, but the essentials remain the same: clear planning, robust evaluation, careful record-keeping and sound judgment continue to be the foundation of lawful and effective procurement.

For a broader overview of how public procurement reform is developing, including guidance updates and emerging case law, visit our Procurement Hub.