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What does the Procurement Act 2023 mean for your business?

Article

6 mins read

Updated on 26 March 2025

Our subject expert
Kevin Manship

Partner - Commercial

Getting contract-ready under the UK Procurement Act 2023 is essential if you're looking to secure public sector work in 2025 and beyond.

For SMEs, the changes bring both opportunity and responsibility. Whether you're a catering company bidding to supply schools or a local IT provider looking to support council systems, your ability to win tenders now depends on much more than price. You’ll need the right policies, contracts, and compliance checks in place – and soon.

The new rules come into effect in February 2025 and they reset how procurement works across the UK. With greater transparency, an emphasis on social value, and strict exclusion grounds, the Act can open up significant growth opportunities – if you’re prepared. Our commercial law solicitors work closely with SMEs to ensure you meet every legal, procedural and contractual requirement, helping you bid with confidence and stand out for the right reasons.

What must you have in place to participate in public procurement?

To become contract-ready under the UK Procurement Act, SMEs need to have specific documents and policies in place, as outlined below:

Company registration and financial stability: Ensure your business is properly registered and has a solid financial foundation. Public sector clients will check your financial health to ensure you can deliver the contract without risking insolvency.
Compliance with relevant legislation: Get to know and comply with applicable legislation such as the General Data Protection Regulation (GDPR), Health and Safety at Work Act, and the Equality Act. Serious non-compliance can disqualify you from the bidding process.
Anti-Bribery and Corruption Policies: Establish robust anti-bribery and corruption policies. Public sector contracts require strict adherence to ethical standards.
Environmental and sustainability policies: Many public sector contracts now require businesses to show their commitment to sustainability. Develop and document your ecological policies to stay ahead of the game.
Insurance: Ensure you have the necessary coverage, such as public liability insurance, professional indemnity insurance, and employers’ liability insurance.
Quality management systems: Implement quality management systems, such as ISO 9001, to demonstrate your commitment to quality and continuous improvement.

What commercial contracts do you need in place?

The right commercial contracts are crucial for SMEs tendering public sector contracts. Here are the key agreements you should consider:

Supplier Agreements: Establish agreements with suppliers to ensure a reliable supply chain. This is crucial for showing your ability to deliver on time and within budget, which is essential.
Non-Disclosure Agreements (NDAs): Protect your intellectual property and confidential information by having NDAs in place with partners, suppliers, and subcontractors. This adds a critical layer of protection, which helps underpin your relationships with public sector bodies.
Service Level Agreements (SLAs): Define the level of service you will provide to your public sector clients. SLAs should include performance metrics, reporting requirements, and relevant penalties for non-compliance. For cloud or IT providers preparing for public sector frameworks, this may also include reviewing your G-Cloud 15 contracts. This will give your clients the peace of mind to contract with you.
Employment contracts: Ensure your employment contracts are up-to-date and compliant with current employment law. This includes clauses related to business protection, such as confidentiality and non-compete clauses.

Practical steps to get contract-ready under the UK Procurement Act

To enable your business to unlock government contract opportunities, key team members must be on board with the changes set out in the Act. This includes your contract managers, sales and finance departments, as well as legal, audit, and reporting functions.

There are a few practical steps you can take across your business to ensure that it is ready:

Which contracts apply? The Act applies to procurements started on or after 24 February 2025, so your first step is to identify which contracts you will need to deal with under the new rules and which you will continue to handle under the previous system, if you have any. You will need to run a two-tier approach whilst these older contracts subsist.
Is your business registered? The Act introduces a central digital platform called ‘Find a Tender’, which is free to access, making it easier to find and bid for contracts. Find a Tender will also enable your business to store, manage and update its core business information quickly, and to share it easily with contracting authorities and across multiple bids. Public procurement opportunities will be visible to users, making it easy for SMEs to search and set up alerts for tenders which may be of interest to them. You will need to register with the platform if you have not already done so. If you were registered before February 2025, you will need to re-register. You will also need to allocate resources to keep your business information up to date regularly and continuously.
What policies and procedures do you need in place? Review your current policies and procedures to ensure they meet the requirements for public procurement. Identify any gaps and take corrective action. Where you are unsure, speak to your legal team.
Is your business MAT fit? Contracting authorities must have regard to ‘most advantageous tender’ (MAT) principles when deciding which business to award a public contract to. Instead of simply going with the cheapest tender, they must consider broader criteria, such as creating social value (providing employment opportunities) or environmental benefits, like reducing waste or achieving net-zero or carbon reduction outcomes. For instance, if a catering company creates additional jobs and teaches new skills to young unemployed people in its locality and bids successfully, it is more likely to satisfy MAT considerations. Start reviewing your business policies with this in mind, as tenders that offer broader advantages than just a ‘good deal’ will help give you a competitive edge and support your efforts to become contract-ready under the UK Procurement Act.
Are your quality assurance procedures robust? For contracts worth more than £5 million, a minimum of three key performance indicators (KPIs) will be agreed between the public authority and the supplier. These will be published at least annually as part of the government’s move towards greater transparency in public procurement. Review your existing quality assurance procedures now so that you can agree on measurable and achievable KPIs with a contracting authority on your larger contracts.
Are you happy with your subcontractors and suppliers? Contracting authorities will verify whether a business should be excluded from the procurement process and added to a debarment list, thereby precluding it from further opportunities. This includes the subcontractors and suppliers your company intends to use for the work it bids for. The potential grounds for exclusion are expansive. Examples include convictions for various criminal offences, misconduct related to tax or environmental matters, breaches of competition law, and breaches of contract or poor performance in previous government contracts. A builder tendering for a public contract could be excluded if its electrical subcontractors have failed to pay their VAT. By auditing your third-party relationships now for potential risks and carefully checking the terms of your contracts with them, you could avoid complex issues further down the line.
Do you have a robust bid library? Create a repository of documents and templates that you can use for future bids. This should include case studies, references, and standard responses to frequently asked questions.
Are your team aware of the new rules? Ensure your team is well-versed in the new procurement rules and understands the bidding process. Consider training sessions or workshops to build their skills, and perhaps introduce a regular refresh and testing regime.
What legal support do you need? Consult with lawyers to review your contracts and policies, ensuring they comply with the Act. They can provide valuable insights and help you navigate the complexities of public procurement.
How to keep abreast of opportunities? Keep an eye on public sector procurement portals and sign up for alerts. This will help you stay informed about new opportunities and relevant deadlines as soon as they crop up.

Final check: Are you contract-ready under the UK Procurement Act?

If you're planning to tender under the new UK Procurement Act,
contract-readiness is more than a box-ticking exercise – it’s your
competitive edge. From checking your supplier agreements and KPIs to
ensuring you meet the new 'most advantageous tender' standard, every
detail matters. For SMEs, missing just one compliance step could mean
losing out on valuable opportunities.

Our commercial law solicitors can help you carry out a full legal readiness check, review or draft the contracts and policies you need, and ensure you’re prepared to demonstrate your value under the new regime. Get in touch to make sure your business is in the best possible position to succeed when the new rules take effect.

About our expert

Kevin Manship

Partner - Commercial

Kevin is a commercial solicitor with more than 20 years’ experience helping businesses put practical, effective contracts in place and navigate complex commercial relationships. Kevin joined Harper James in 2022, having qualified as a solicitor in 2000 and spent much of his career at top 50 law firm Blake Morgan.

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