Procurement Act 2023: What UK SMEs Actually Need to Know
The biggest change to UK public sector procurement in decades went live on 24 February 2025. If you bid on council, NHS, or government contracts, here's what changed and what you need to do about it.
Quick Summary
- When: Came into force 24 February 2025
- What: Replaces old EU procurement rules
- Good news: More opportunities for SMEs, less paperwork
- Action needed: Register on the Central Digital Platform
Already bidding on public contracts? MyBidTeam helps you write responses that meet the new evaluation criteria.
What is the Procurement Act 2023?
Until February 2025, UK public procurement followed rules inherited from the EU. The Procurement Act 2023 replaces all of that with a new, UK-specific framework.
The stated goal is simpler processes, more transparency, and better access for small businesses. Whether it delivers on that promise depends partly on how authorities implement it, and partly on whether suppliers actually take advantage of the changes.
5 Changes That Actually Matter for SMEs
1. "Most Advantageous" Replaces "Cheapest"
The old rules used "most economically advantageous tender" which in practice often meant lowest price. The new rules use "most advantageous tender" which explicitly allows authorities to weight quality, social value, and innovation more heavily.
What this means for you: price still matters, but a well-written quality response can beat a cheaper competitor. If you've been losing on price alone, you might have a better shot now.
2. Authorities Must Consider SME Barriers
The Act creates a legal duty for contracting authorities to consider barriers faced by SMEs and actively look at whether those barriers can be reduced. This includes splitting large contracts into smaller lots that smaller businesses can actually deliver.
In practice, this means more opportunities in the £50k-£200k range where SMEs can compete without needing massive turnover requirements or extensive contract histories.
3. 30-Day Payment Terms Are Stronger
The Act strengthens requirements for 30-day payment throughout the supply chain. Prime contractors can't sit on your money for 90 days while they collect from the authority.
If you're working as a subcontractor, this matters. Payment terms should be in the contract, and you have more recourse if they're not honoured.
4. Central Digital Platform Registration
There's a new central platform where you register your company information once, then reuse it for multiple bids. The idea is "tell us once" instead of filling in the same company details, insurance certificates, and policies for every tender.
Action required: You need to register on the Central Digital Platform to bid on contracts above the threshold. It's an enhanced version of the old Find a Tender service. Do this before you need to bid on something urgent.
5. Debarment Register for Bad Actors
The Act creates a central debarment register. Suppliers who break the rules can be banned from public contracts for up to 5 years. Shortly after the Act went live, the government announced investigations into seven contractors linked to the Grenfell tragedy.
For legitimate SMEs, this is good news. It levels the playing field by removing repeat offenders from competition.
New Thresholds from January 2026
Procurement thresholds changed on 1 January 2026. These are the values above which contracts must follow the full procurement rules:
| Contract Type | Old Threshold | New Threshold (2026) |
|---|---|---|
| Services/Supplies (Central Gov) | £139,688 | £135,018 |
| Services/Supplies (Local/NHS) | £215,067 | £207,720 |
| Works | £5,372,609 | £5,193,000 |
Notice the thresholds went down, not up. That means more contracts fall under the regulated procurement rules. For SMEs, this is actually helpful. More contracts going through proper tender processes means more visibility and fairer competition.
Writing your first bid under the new rules? Try MyBidTeam's free demo. Paste any tender question and get an AI-drafted response in 60 seconds.
What You Need to Do
Register on the Central Digital Platform
Do this now, before you need to bid urgently. It's free and takes about 30 minutes.
Update your company vault
Make sure your insurance certificates, policies, and accreditations are current. You'll need to upload these to the platform.
Review your social value offering
Social value carries more weight under the new rules. If you don't have a clear social value proposition, now's the time to develop one.
Look for lotted contracts
With the new SME duty, more contracts are being split into lots. Search for opportunities in your area that match your capacity.
Common Mistakes to Avoid
Frequently Asked Questions
Does the Procurement Act apply to all public contracts?
It applies to contracts above the threshold values. Contracts below threshold still need to follow authority-specific rules, but they're not subject to the full Procurement Act requirements. The new Act also only applies to procurements started after 24 February 2025.
Do I need to re-register if I was on the old system?
Yes. The Central Digital Platform is new. Your old Find a Tender account doesn't automatically transfer. You'll need to create a new registration and upload your supplier information.
How does this affect framework agreements?
The Act introduces "open frameworks" which allow new suppliers to join throughout the framework period. Under old rules, if you missed the initial tender, you were locked out for the entire framework term. Now there are more opportunities to join later.
Does this apply in Scotland?
No. Scotland has separate procurement legislation. The Procurement Act 2023 applies to England, Wales, and Northern Ireland. If you bid on Scottish public contracts, different rules apply.
Ready to Win Under the New Rules?
MyBidTeam helps SME tradespeople write bid responses that meet the new evaluation criteria. Your first answer is free.