The Procurement Act is finally starting to bite

Fifteen months ago the Procurement Act 2023 finally came into force. For most of the first year it was hard to spot the difference, because buyers could keep releasing tenders under the old regulations while the transition played out. It's only in the last six months that the new regime has really started to bite.

So we ran a webinar to take stock. I was joined by Matt Spencer, who has spent more than twenty years selling into UK central government, led Telefónica O2's £140m public sector sales division, and now advises IT firms on public sector market entry. The full recording is above. If you'd rather read than watch, here's what we covered.

The opportunity is real, but it isn't evenly spread

The public sector is the single biggest market available to any organisation in the UK, and direct procurement spend with SMEs hit £45.2 billion last year, a six-year high according to the BCC and Tussell SME Procurement Tracker.

That headline hides a lot of variation, and knowing where the door is already open saves you months:

• Local government leads, with 34% of direct spend going to SMEs and sustained growth behind it. If you sell to councils, the case for using SMEs has already been made. You're pushing on an open door.
• Education and training is heavily SME-weighted, largely because it's a fragmented market buying in small contractual increments.
• NHS and health has more to do. Buyers there still play the risk card, but the opportunity is real.
• Defence and aerospace is hard to crack directly. Unless you're at the genuinely novel technology end, where innovators are actively courted, your route in is usually as a subcontractor to a prime rather than a direct bidder.

Seven changes that shift the balance towards SMEs

1. Buyers now have a legal duty to consider SME barriers. It's explicit in the legislation and in the National Procurement Policy Statement, and Find a Tender now flags whether an opportunity is SME-suitable. The practical move: when a requirement looks disproportionate for a business your size, quote that duty back through a clarification question. Matt had done exactly that on a pre-market engagement call an hour before our webinar. It works.

2. Register once, use it everywhere. The new Central Digital Platform gives you a single supplier registration for advertised tenders. You'll need your company number, a Dun & Bradstreet number and a couple of years of accounts. Once registered you get a supplier identification number and a share code, and a growing number of bids simply ask for the share code instead of making you retype everything. Keep your published accounts current so the share code always pulls the latest.

3. Insurance is no longer required at bid stage. You only need it in place at contract award, which shifts the cost to the point where revenue is actually in sight. You may be asked for evidence of quotes, which is reasonable. Matt's tip: the same proportionality argument often works for certifications like ISO, especially when the contract doesn't start for another eighteen months. Raise it as a clarification question.

4. You get far earlier warning of what's coming. Pipeline notices, planned procurement notices and pre-market engagement notices now give you sight of tenders months or years before they go live, and pre-market engagement volumes have spiked over the last year. Matt called this the single most significant impact of the Act. His advice: register your interest in every relevant one, because that puts your company on the buyer's distribution list for everything that follows. Be more selective about the heavyweight questionnaires. And treat a pipeline notice exactly like a sales lead: it needs a strategy and follow-up, not fire and forget.

5. MEAT has become MAT. The award test has changed from "most economically advantageous tender" to "most advantageous tender", and dropping that word signals that price doesn't have to dominate. In practice buyers still publish a quality and price split, but it's a legitimate question to ask a buyer how they're accommodating MAT in their evaluation. One development to watch: evaluating price per quality point, where your price is divided by your total quality score, is starting to be talked about. Think through what that would do to your pricing strategy before it shows up in a tender.

6. Thirty-day payment terms now flow through the whole supply chain. If you sub to a prime on a public contract, the prime is required to pay you within thirty days, which matters enormously for cash flow. Two wrinkles: be ready to evidence that you pay your own subcontractors within thirty days too, because buyers have started asking, and check when payment milestones actually kick in. Thirty-day payment doesn't help if the first milestone lands six months after you've bought the materials. And if it isn't happening, complain. The requirement is explicit, so use it.

7. The competitive flexible procedure replaces the old negotiated procedures. Buyers can now design procurements with more touchpoints: demonstrations, sandboxes, presentations. That's good news for SMEs, because a big competitor's brand answers "can we trust them?" without anyone showing up, while a touchpoint puts you in the room to answer it yourself. The caveat is that buyers can design in almost any requirement they like, so read the procedure carefully and challenge anything disproportionate, referring back to change number one.

Departments now have SME spend targets, and most are behind

For the first time, central government departments have set themselves individual targets for direct SME spend to hit by 2028. DSIT is aiming for 40%, DCMS 33%, the Cabinet Office 30% and the Treasury 22%, while the Ministry of Defence is targeting £7.5 billion of direct and indirect SME spend, a 50% increase on 2023-24.

Here's the leverage: the BCC and Tussell tracker found departments are on average 8.4 percentage points below those targets. If you sell to central government, the buyer across the table is probably behind on a number they're publicly accountable for, and you are part of how they catch up. Bring that to the conversation.

The Nuvoli story

Matt told the story of Nuvoli, an SME that roots out excess mobile phone spend in large organisations. They were already serving the public sector indirectly but found the market daunting and didn't think government would want them. The turning point was getting onto the right framework: not just G-Cloud, where the barrier to entry is low, but RM6261, the mobile voice and data framework with much more stringent vetting. They engaged openly with the Government Commercial Agency, got far more support than they expected, and now win direct public sector work. Their CEO Bruce put it like this:

Being small, agile and independent really is a benefit to the public sector. If there's one thing I wish I'd known, it's don't be scared. Just be honest about what you do, talk about where your strengths are, and get to grips with what differentiates you, why the public sector could be an opportunity for you and why you could be an opportunity for the public sector.

If frameworks are new to you: a framework is a procurement vehicle where suppliers are vetted once and terms agreed up front, so any public body can then "call off" work without running a full open tender. Under the Act, frameworks can now run for up to eight years but must reopen periodically, so missing the initial window no longer locks you out for the duration. Note when the reopening is due and be ready.

The five-step playbook

1. Register on the Central Digital Platform via Find a Tender. It's the baseline for everything else.
2. Use a tool to stay on top of the volume. The early warning the Act gives you is a genuine advantage, but the flood of pipeline notices, engagement notices, live tenders and awards creates real work. Nobody wants to spend Monday morning triaging fifty notices. That's exactly why we built Jonty Scout: it matches what's coming through to your business and emails you only the opportunities that genuinely fit, with a short note on why and what to do next.
3. Get on the right frameworks. Start with the Government Commercial Agency (the new name for Crown Commercial Service since April), and don't forget the sector consortia: UKUPC for universities, NEPO, YPO and Crescent Purchasing in education, and NHS Shared Business Services. One caution from Matt: more opportunity is published through frameworks than government actually spends, so pick the ones your buyers really use.
4. Show up to market engagement. A short email or an hour on a buyer's webinar gets your name and face in front of the people shaping the tender. Buyers are humans, and the supplier they've already met reads differently on paper.
5. Have a follow-up plan. The biggest mistake Matt sees SMEs make is assuming the public sector is entirely process-driven. It is process-heavy, but it rewards proactivity like any other market. If you rely on the documents alone, you won't grow.

The recording above has the full discussion, including the audience Q&A. If you'd rather have it on YouTube, it's here.