In one of the largest shake ups to procurement rules in UK history SMEs are to be helped to secure a larger share of about £300bn of expenditure every year.
The changes became law following the Royal Assent of the Procurement Act, which, it’s claimed, creates a simpler and more transparent system delivering better value for money, reducing costs for business and the public sector.
The Act places a requirement on contracting authorities to assess the barriers facing SMEs throughout the entire procurement lifecycle, and to consider what can be done to overcome them.
For example, in the area of insurance, procurement processes can unfairly penalise businesses that lack the resources of larger suppliers. The Act makes it clear that contracting authorities must accept evidence that required insurance cover will be in place when a contract is awarded, rather than at the point of bidding. This will save all businesses, including SMEs, from having to incur unnecessary upfront costs.
Significant new powers will enable high-risk suppliers to be put on a public debarment list and be prevented from bidding for some categories of goods or services, such as areas related to defence and national security, while allowing them to continue to bid for contracts in non-sensitive areas.
Minister for the Cabinet Office Jeremy Quin said: “We have taken the long-term decisions that will increase our powers to protect our security in our supply chains and procurement.
“This has included radical steps such as creating a National Security Unit for Procurement and giving Ministers the power to prevent suppliers from bidding for certain products where there is a risk to national security it will deliver lasting change which protects the UK for generations to come.”
Parliamentary Secretary for the Cabinet Office Alex Burghart said: “This Act is all about supporting British business using the opportunity of Brexit, as we change the way government works so it delivers better for people across the country. In particular, we draw on the new freedoms available to us by leaving the European Union to embrace and best support our small and medium sized businesses.
“The Act will streamline the way that companies bid for public contracts, while also giving procurers more room for negotiating prices and innovative solutions with these companies.
“These reforms will deliver better value for money, slash red tape, drive innovation and make it easier for suppliers of all sizes to do business with the public sector
“It will also be possible to exclude suppliers from bidding for contracts, not only if they’ve performed badly on other contracts in the past, but also based on modern slavery or professional misconduct grounds.”
The Government is also committing to publish a timeline for the removal of surveillance equipment produced by companies subject to China’s National Intelligence Law from central government sensitive sites. Government will also produce an annual written report to Parliament detailing progress on this commitment.
