The Procurement Act 2023: What Changed for Construction Suppliers?

Public Sector Procurement Has Changed. What Does It Mean for Construction?

Winning public sector construction work has never been just about offering the lowest price.

Contractors and subcontractors must demonstrate that they have the right experience, resources, financial stability and ability to deliver.

For smaller construction businesses, navigating public procurement can also be challenging.

Different tendering processes, repeated requests for company information and complex documentation can make bidding for public contracts time-consuming.

The Procurement Act 2023 was introduced to modernise the way public sector organisations buy goods, services and works.

Although the legislation received Royal Assent in 2023, the main procurement reforms came into force on 24 February 2025.

The changes affect how public contracts are advertised, how suppliers participate in procurement and how contract performance is monitored.

For construction businesses interested in working with local authorities, government departments and other public sector organisations, understanding the new rules is increasingly important.

What Is the Procurement Act 2023?

The Procurement Act 2023 is legislation designed to reform public procurement.

It replaced several previous procurement regimes for new procurements within its scope, bringing much of the framework into a single piece of legislation.

The government's objectives include making procurement more accessible, improving transparency, encouraging competition and giving contracting authorities greater flexibility when purchasing goods, services and works.

The reforms are particularly relevant to businesses seeking public sector construction contracts.

These might include:

• Main contractors delivering public building projects
• Specialist subcontractors
• Building maintenance contractors
• Mechanical and electrical contractors
• Construction product suppliers
• Facilities management providers
• Smaller businesses looking to enter public sector supply chains

However, the Act does not automatically govern every construction contract.

Its main focus is procurement by contracting authorities within the legislation's scope.

Private sector procurement generally remains outside the Act, although public procurement requirements can influence the processes used by contractors and their supply chains.

Does the Procurement Act Apply Across the UK?

The position differs across the UK.

The Procurement Act 2023 generally applies to public procurement in England, Wales and Northern Ireland within its scope.

However, there are important differences for devolved procurement.

Scotland retains its own public procurement legislation for most devolved Scottish procurement activity.

Certain Welsh and Northern Irish procurement arrangements also have specific provisions or exceptions.

Construction suppliers should therefore check which procurement regime applies to the particular opportunity rather than assuming every UK public contract follows identical rules.

1. A New Central Digital Platform for Suppliers

One of the most practical changes is the expansion of the Find a Tender service into the central digital platform for public procurement.

Previously, suppliers could face repeated requests to provide similar company information when bidding for different opportunities.

Under the new system, suppliers can register and maintain certain core business information in one place.

This information can then be shared with contracting authorities when required.

The platform supports information such as company details and other prescribed supplier information used during procurement.

It also provides a central location for public procurement notices.

For construction businesses, this offers an opportunity to reduce some of the administrative work associated with participating in multiple public sector tenders.

However, registration does not mean that every tender can be completed using the same information.

Contracting authorities can still request relevant project-specific information, including evidence of technical capability and experience, where permitted.

2. More Visibility of Public Sector Opportunities

The Procurement Act introduced a wider approach to transparency throughout the procurement process.

Public procurement notices are published through the central digital platform, making it easier for suppliers to identify opportunities and access information.

Depending on the procurement, notices can provide information about planned opportunities, tender competitions, contract awards and contract performance.

For construction suppliers, this can be particularly useful when looking for work with organisations they haven't previously supplied.

A smaller contractor may be able to identify upcoming public sector opportunities without relying entirely on existing relationships.

Greater visibility can also help businesses understand which organisations are buying particular types of construction work.

However, not every procurement will involve an openly advertised competition.

Different rules and exemptions apply depending on the contract and procurement procedure.

3. More Flexible Tendering Procedures

The new legislation introduced greater flexibility in how contracting authorities run competitive procurements.

One important change is the introduction of the competitive flexible procedure.

This allows contracting authorities to design a procurement process suited to the nature and complexity of the requirement, subject to the applicable rules.

For construction, this flexibility may be useful where projects involve complex technical requirements, specialist expertise or opportunities for suppliers to develop solutions with the contracting authority.

However, greater flexibility also means that suppliers need to pay close attention to the specific requirements of each competition.

Different tenders may involve different stages, submission requirements or opportunities for dialogue.

Construction businesses should carefully review the tender notice and associated documents before deciding whether to participate.

4. Greater Consideration for Smaller Suppliers

The Procurement Act aims to make public procurement more accessible to small and medium-sized enterprises (SMEs) and voluntary, community and social enterprises.

Contracting authorities must consider barriers that smaller suppliers may face when competing for public contracts and whether those barriers can be removed or reduced.

For construction SMEs, these barriers might include:

• Disproportionate administrative requirements
• Complex tender documentation
• Unnecessarily restrictive participation conditions
• Limited access to procurement information
• Short timescales for preparing bids

The reforms do not guarantee that smaller suppliers will win more work.

Nor do they remove the need to demonstrate suitable experience, financial capacity or technical ability where relevant.

However, they encourage contracting authorities to consider whether their procurement arrangements create unnecessary obstacles.

This could help smaller construction businesses compete for opportunities that may previously have been difficult to access.

5. Changes to Supplier Information and Pre-Qualification

Pre-qualification remains an important part of construction procurement.

Contracting authorities still need to understand whether suppliers have the legal, financial and technical capability to deliver the work.

However, the Procurement Act changes how certain information is collected and used.

For covered procurements, the central digital platform provides a standardised way for suppliers to submit prescribed core information.

Contracting authorities can also establish appropriate conditions of participation relating to legal and financial capacity and technical ability.

These conditions must comply with the Act's requirements.

For construction suppliers, this means maintaining accurate and up-to-date company information remains essential.

Insurance details, financial information, relevant experience and evidence of competence may still be important when responding to tenders.

The exact information required will depend on the procurement.

It is also worth noting that different restrictions apply to certain below-threshold procurements, including restrictions on using a separate pre-qualification stage.

The new system therefore does not remove supplier assessments, but it changes the framework within which they are carried out.

6. Stronger Payment Terms Throughout the Supply Chain

Payment is a major issue for construction businesses.

Smaller subcontractors can be particularly affected when payments are delayed, especially where they must continue covering labour, materials and other operating costs.

The Procurement Act strengthens prompt payment provisions for contracts within its scope.

Broadly, the legislation provides for 30-day payment terms in relevant public contracts and qualifying subcontracts.

This is particularly significant for construction supply chains, where smaller businesses may be working several tiers below the original contracting authority.

However, the detailed application depends on the contract and the relevant statutory provisions.

The legislation does not mean that every construction invoice, regardless of the contractual circumstances, must automatically be paid within 30 days.

Suppliers should understand the payment terms that apply to their contracts and ensure invoices are submitted correctly.

For contractors managing subcontractors, prompt payment should also form part of wider supply chain management.

7. Greater Focus on Supplier Performance

One of the most significant changes for construction businesses is the increased emphasis on measuring supplier performance.

Under the Procurement Act, contracting authorities are generally required to establish at least three Key Performance Indicators (KPIs) for public contracts with an estimated value of more than £5 million, subject to specified exceptions.

These KPIs help measure whether suppliers are delivering their contractual obligations.

For construction projects, relevant performance measures might include:

• Achievement of programme milestones
• Quality of completed work
• Management of defects
• Delivery against agreed requirements
• Relevant service or operational performance
• Other measurable contractual outcomes

The appropriate KPIs will depend on the contract.

The legislation also introduces requirements for publishing certain performance information.

From January 2026, the contract performance notice requirements became operational for contracts within their scope.

This means supplier performance can become more visible beyond the individual contracting authority.

For construction businesses, maintaining reliable performance records is increasingly valuable.

A strong track record can support future procurement decisions, while serious or repeated performance issues may have wider consequences.

8. Poor Performance Can Have Greater Consequences

The Procurement Act also introduced changes to the rules governing supplier exclusions.

These rules allow, and in some circumstances require, contracting authorities to exclude suppliers where specified grounds apply.

The legislation includes grounds relating to matters such as serious misconduct, certain offences and poor contractual performance.

It also introduced a framework for considering whether suppliers should be placed on a central debarment list.

For construction businesses, this makes it important to understand that supplier performance and conduct can affect future public procurement opportunities.

However, not every missed deadline, defect or commercial disagreement will result in exclusion.

The relevant legal grounds, evidence and procedures must be considered.

The broader message is that suppliers should take performance concerns seriously, maintain accurate records and respond appropriately when problems arise.

9. More Transparency After Contracts Are Awarded

Traditionally, much of the attention around procurement has focused on the tendering and contract award stages.

The Procurement Act places greater emphasis on transparency throughout the contract lifecycle.

Depending on the contract, contracting authorities may be required to publish information relating to contract awards, contract details, performance and certain modifications.

This can provide greater visibility of how public money is being spent and how contracts are being delivered.

For construction suppliers, it also reinforces the importance of accurate documentation and consistent contract management.

Information about performance and contractual outcomes may no longer remain solely within the project team.

10. What About Existing Public Sector Contracts?

An important point is that the Procurement Act did not automatically replace the rules governing every existing public contract.

Procurements started under the previous legislation generally continue under that legislation.

Contracts awarded under the previous rules also remain subject to the relevant previous regime, including applicable rules for contract management and modification.

This means construction businesses may encounter different procurement arrangements depending on when the original process began.

For example, a contractor working under an older framework may still be operating under the previous procurement legislation, while a new competition may fall under the Procurement Act.

Suppliers should therefore check the rules applying to each opportunity or contract.

What Should Construction Suppliers Be Doing Now?

The Procurement Act is no longer a future change.

The main procurement regime has been operating since February 2025, with further reporting requirements becoming operational during 2026.

For construction businesses, the priority is understanding how the rules affect current and future opportunities.

Register on Find a Tender

Suppliers interested in public sector work should understand the central digital platform and ensure their registration and core information are accurate.

Review Existing Supplier Information

Check that company details, financial information, relevant policies, qualifications and other supporting documents are current.

Understand Tender Requirements

Read procurement notices carefully and identify the requirements, procedures and deadlines that apply to each opportunity.

Maintain Performance Records

Keep reliable evidence of completed work, project outcomes, relevant KPIs and how performance issues have been resolved.

Review Payment Arrangements

Understand the payment provisions applying to relevant public contracts and subcontracts.

Monitor Public Sector Opportunities

Use Find a Tender to identify relevant opportunities and consider setting up alerts for suitable contracts.

Understand Which Rules Apply

Check whether a procurement falls under the new Act or the previous legislation, particularly where existing frameworks or older contracts are involved.

What Does This Mean for Main Contractors?

For main contractors delivering public sector construction projects, the changes extend beyond preparing tender submissions.

There is also a need to manage supplier information, subcontractor relationships and contract performance effectively.

Main contractors may need to demonstrate their own performance against contractual KPIs while maintaining visibility of the subcontractors contributing to delivery.

They should also understand the payment provisions applying to their supply chains and the information needed to support public sector procurement requirements.

This makes consistent supplier management and reliable project records particularly important.

How Liaison Mobilize Can Help

Liaison's Mobilize platform supports construction businesses with supplier onboarding, pre-qualification, compliance management, tender processes and supplier performance assessments.

These capabilities can help organisations maintain more consistent supplier records and assess whether subcontractors meet relevant requirements.

Project-level assessments can also help capture performance information, supporting a clearer understanding of how suppliers perform across different projects.

For contractors managing complex supply chains, having access to organised supplier information can make procurement and ongoing supplier management more efficient.

However, Mobilize is not a replacement for the government's Find a Tender platform, and using supplier management software does not automatically establish compliance with the Procurement Act.

Instead, Mobilize can support the internal processes that sit alongside public procurement requirements, helping businesses manage the information, assessments and performance records needed throughout the supplier relationship.

Conclusion

The Procurement Act 2023 represents a significant change in the way public sector contracts are procured and managed.

For construction suppliers, the reforms introduce a more centralised approach to procurement information, greater visibility of opportunities, more flexible tendering procedures and stronger provisions relating to payment and supplier performance.

They also place greater emphasis on transparency and accountability throughout the contract lifecycle.

For smaller construction businesses, the changes may create opportunities to compete for public sector work.

For established contractors, they reinforce the importance of maintaining accurate supplier information, demonstrating performance and managing supply chains effectively.

The key is understanding that procurement doesn't end when a contract is awarded.

How suppliers deliver, how they manage their responsibilities and how their performance is recorded can be just as important as the original tender.

And under the Procurement Act, that information is becoming increasingly visible.