Procurement Act 2023: what now wins public work

The Procurement Act 2023 came into force on 24 February 2025. It changed how public contracts are awarded, and with it, what suppliers have to show to win them. Here is what it means in practice, and what to do about it.

From cheapest to most advantageous

Contracts are now awarded to the “most advantageous tender”. The old test was the “most economically advantageous tender”. The change in wording matters. Buyers can weigh how a contract is delivered, not just what it delivers: local jobs and skills, carbon and resource use, fair treatment of staff, and spend with local suppliers. Public money should create public benefit during delivery, as well as at the end.

How much it counts

In central government, social value must carry at least 10% of the total tender score (PPN 002). From 1 January 2027, PPN 026 raises this to 20% on contracts of £5 million or more, with 10% on contracts from £1 million. Contracts above £5 million a year also need a carbon reduction plan to take part (PPN 006).

Councils and the NHS are not bound by these notes, but many follow the same approach. And the gap between the winning bid and second place is often small. Public value can decide the result.

Qualification looks back

At qualification, buyers look at your policies and your track record. They want to see:

• Policy and planning: the right policies, and clear arrangements to deliver them, such as an apprenticeship plan.

• Relevance: objectives that fit your industry, location and services. For an IT firm, training young people in tech is relevant; a tree planting day is not. For a vegetation management firm, biodiversity work is core.

• Credible evidence: past examples, references, feedback, awards or independent checks.

• Measured performance: specific, measurable targets and a record of progress against them.

A track record cannot be built while a tender is open. It takes steady, planned work over time.

Tenders look forward

At tender stage, the question is how you will deliver this contract and what extra value you will bring. Strong responses usually show:

• Track record: brief, relevant proof that you are organised to deliver what you promise.

• Stakeholder alignment: the buyer’s own policies, and the needs of the local community, end users and regulators.

• Specialist resources: the people needed to deliver your proposals, such as a carbon assessor or sustainability specialist.

• Local partnerships: local suppliers, voluntary groups and social enterprises that support delivery.

• Objectives and KPIs: specific, measurable commitments you can report on.

Promises are now checked. On contracts over £5 million, the buyer must set at least three KPIs and publish an assessment of your performance at least once every 12 months. Serious breaches, and poor performance that is not put right, are published too.

A worked example

A council tenders new segregated cycle lanes. The core outcome is the lanes, built to design and quality. Added public value could include:

• Two local jobs, and work experience for two college students.

• A local surfacing firm, old tarmac recycled on the job, existing kerbs reused and low carbon concrete specified.

• Welfare facilities and safety arrangements to best practice.

• 75% of spend with firms in the council area.

• Local cycling groups involved in the design and safety features.

None of this is charity. It all comes from how the job is done.

What the Act gives SMEs

The Act is not all extra burden. It also:

• requires buyers to consider the barriers SMEs face, and whether they can be removed or reduced;

• puts 30-day payment terms into public contracts and passes them down the supply chain;

• stops buyers asking for audited accounts unless you are legally required to have them;

• stops buyers requiring contract insurance to be in place before award;

• brings opportunities onto one central platform, with one registration.

What to do now

Start building the record before the tender arrives. Pick a few objectives that matter to your buyers and fit your work. Name who owns each one. Measure progress and keep the evidence as you go. Publish what you achieve.

That is what Step-By-Step Partnership is built for: a short plan, light support all year, and annual reports you can use in bids. Talk to us if you would like to see where you stand.