A new piece of government legislation is set to be a ‘game changer’ for SMEs looking to compete with bigger businesses in the public sector procurement space, according to a specialist commercial lawyer.
The revised Procurement Act 2023 is due to come in force on February 24 this year, replacing the current procurement regulations to provide a more streamlined process.
Ann Critchell-Ward, Head of Commercial at legal firm Wright Hassall based in Leamington, says that one key objective of the Act is to provide SMEs with more opportunities to win government work.
The Act stipulates that the contracting authority must have regard to the importance of delivering value for money, maximising public benefit, sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions, and acting with integrity.
The contracting authority is also expected to have regard to the fact that small and medium-sized enterprises may face more barriers to participation in the procurement process and consider whether these barriers can be removed or reduced.
Ann said: “Navigating the current economic climate in the UK is no easy task for businesses, and one of the main ways to adapt to negative pressure on profits is to seek new and profitable markets.
“These amendments to the Procurement Act 2023 provide significant benefits to SMEs through the streamlining of the procurement process.
“It is now easier for SMEs to compete with bigger businesses in the public sector procurement space, which could a game changer.
“Easing up on the current onerous and costly upfront requirements before certain procurement contracts are awarded and the regulation of payment terms in certain circumstances is an effort to relieve some of the cash flow difficulties which many SMEs experience.
“There is also a greater emphasis on transparency and, subject to specific exclusions, a public authority is obliged to make information available throughout the duration of the tender.
“Whilst this is all well and good, the new regime does not absolve suppliers from taking responsibility for their part in the procurement process, and the need for the proper allocation and use of public funds means that it should be taken seriously.
“This means that before businesses dive into the procurement process headfirst, they need to understand the terms of the tender, whether they qualify to participate and how to prepare and submit their applications.
“Like all business opportunities, there is always an element of risk, however with some careful planning and the help of trusted advisors, the opportunities under the Procurement Act can open up a whole new stream of revenue for businesses.”
