Take these steps now – and be ready for procurement reform

With less than three months until the Procurement Act goes live, housing associations and local authorities should now be well in to preparing for the new rules. But what about the contractors that build, repair and refurbish social homes and public buildings? What can they do to get ready? 

The new regime will fundamentally change how housebuilders and construction firms bid for and deliver contracts, replacing all existing procurement regulations. There will be many opportunities, with reforms designed to open up tendering to new entrants such as small businesses and social enterprises.

But there will also be fresh risks, including the ramping up of supplier scrutiny via published key performance indicators and a central debarment list.

Contractors must get set for the new rules, so they have the right people, processes and data in place to hit the ground running on 28 October. Here are seven steps to take now:

Look at free resources

The government’s Transforming Public Procurement pages are packed with information relevant to contractors, including knowledge drop videos and fact sheets about the new legislation. There is also dedicated content for SME and social enterprise suppliers.

For more specialist information or training, look to law firms and procurement organisations. Many run free webinars where you can ask questions, with recordings available on YouTube.

The Cabinet Office has recently published secondary legislation, offering guidance and clarification on various aspects of the legislation. This includes definitions, thresholds, pre-procurement notices and the national procurement policy statement which public bodies have to follow when shaping their procurement activity.

Talk to your customers

Now is the time to build connections with key contacts within your public sector clients. Don’t limit relationship-building to the contract managers you normally deal with. Reach out to procurement leaders as they can provide a clearer view of how they are preparing for reform and any contracts coming up for re-procurement.

Remember that new regulations only apply to procurement activity that begins on or after 28 October 2024, so existing contracts are not affected.

Upload your details once

The headache of registering the same information time and time again across multiple e-tendering systems has finally been addressed. Contractors need only add their core business details once via the new central digital platform. This data will be accessed directly by procuring authorities for all future bids and the onus is on contractors and suppliers to keep it updated.

Linked to the central platform is the Find a Tender service, which allows suppliers to search and apply for high-value public contracts over a specific threshold. Find a Tender was introduced in 2021, replacing the old OJEU (Official Journal of the European Union) process. Find a Tender will also be used to publish the significant number of new notices required under procurement reform.

Get pipeline visibility

There is a big focus on forward planning in the Procurement Act, something that is beneficial to housebuilders and contractors. Any public sector organisation with a total annual spend of over £100m will have to publish an 18-month view of all procurement opportunities worth £2m or more. This new rule gives contractors time to consider which projects they want to tender for and get the right skills and systems in place to develop a strong bid.

Prepare for early, flexible procurement

One way the government intends to open up public procurement to SMEs is through better market engagement, right at the start of the procurement process. Councils, social landlords and other public bodies will be expected to put out pre-market engagement notices early, encouraging conversations with the supply chain.

Contractors should take advantage of this; particularly the new competitive flexible procedure which allows public sector buyers to design their own procurement processes to ensure a greater level of dialogue and engagement during the tender period and beyond.

This will provide you with more opportunity to showcase your services including site tours, demonstrations, interviews or presentations where you walk buyers through your services. Ensure you have the skills in place for this new level of dialogue and negotiation.

Beware of KPIs

Under the new regime, a contractor’s performance will be monitored differently. Contracts with an estimated value of over £5m will be required, in the main, to include three key performance indicators (KPIs) and results will be put in the public domain.

This is a major change for buyers and suppliers. Currently, we talk a lot about KPIs and reporting but, in reality, performance management is not always structured or consistent.

With the new rules, housebuilders and construction companies will have to think carefully about whether they really do have the capability and capacity to deliver a project and hit the stated KPIs.

Read up on exclusions and debarment

Another risk for contractors is the widening of exclusion grounds. This is particularly relevant if you are bidding with sub-contractors as part of a consortium as they, too, will be subject to exclusion rules, as will other “connected persons” such as parent or subsidiary companies. Existing exclusion grounds have been widened, for example for poor performance or improper behaviour.

Excluded suppliers may be entered on to a debarment list held centrally by the Government. This is a major risk for contractors as it could lock them out of winning public sector work for a significant period.

Overall, the greater focus on flexibility, transparency and levelling up in the Procurement Act is positive news for contractors. The key, however, is that housebuilders and construction firms familiarise themselves with changes now, review their commercial strategy, update their bidding systems and get resources lined up to harness the new regulations when they kick off on 28 October.

Jane Brighouse is quality and compliance manager at Procurement for Housing