In our most recent event, ‘The Procurement Act – Go Live October 2024’, we discussed the impact this new legislation may have on Procurement professionals operating within the Public Sector.
Dan Goodson, Head of Industrial practice, explores the effects this new legislation could have on the construction and infrastructure industries.
There will certainly be a big focus on sustainable procurement practices and from experience I see the construction sector leading the way when it comes to implementation.
Procurement Act 2024: A Brief Overview
The UK Procurement Act 2024 is due to come into force in October 2024. This legislation introduces several changes to public procurement rules, and its implications will be felt across various sectors, including infrastructure. Here are some key points relevant to the construction industry:
1. Increased Visibility of Contracting Authorities’ Pipelines
The Act promises to enhance transparency by requiring larger contracting authorities to publish a “pipeline notice” at the start of each financial year.
These notices will outline contracts worth at least £2 million that the authorities intend to procure over the next 18 months.
For construction companies, this means better visibility into upcoming projects, aiding in planning and resource allocation.
2. Flexible Procurement Processes
Under the new “competitive flexible procedure,” contracting authorities will have more freedom to design procurement processes that align with their specific needs.
While this flexibility could lead to innovative approaches in procuring construction contracts, firms must closely adhere to the rules governing these new processes, which may diverge from traditional formats.
3. Competition Law Scrutiny
The UK construction sector has been under the spotlight regarding competition law.
In 2023, the Competition and Markets Authority (CMA) fined ten demolition and asbestos removal services firms nearly £60 million for bid-rigging activities.
The CMA’s strategic focus on competition policy and enforcement is expected to continue into 2024 and beyond, impacting all sectors, including construction.
4. Social Value and Sustainability Goals
The Act emphasises social value and policy objectives related to sustainability, climate change, and social inclusion.
Contractors and suppliers will need to align their practices with these goals, ensuring that infrastructure projects contribute positively to society and the environment.
5. Contract Management and Procurement Alignment
Historically, contract management in the construction industry has been inefficient and not always well-coordinated with proper procurement.
Progress in this area is welcomed, as efficient contract management will play a crucial role in realising the Procurement Act’s objectives.
In summary, the Procurement Act 2024 aims to streamline processes, enhance transparency, and promote sustainable practices within the infrastructure sector. Construction companies should stay informed about these changes to adapt effectively and capitalise on new opportunities.
