Winning Public Sector Contracts: How SMEs can take advantage of the new UK Procurement Act

The UK Procurement Act 2023, which came into force on February 24th 2025, marks a significant shift in how the government and public sector award contracts. Designed to replace outdated EU procurement rules, the good news is that the new framework is more straightforward, transparent, and fairer, particularly benefiting small and medium-sized enterprises (SMEs).

With the UK public sector spending around £300 billion annually on procurement, the changes offer SMEs a significant opportunity to win more business, drive innovation, and strengthen their financial resilience. However, to fully capitalise on these opportunities, SMEs must be prepared to demonstrate strong social, environmental, and governance (ESG) performance. 

Let’s explore the key features and dive into some practical steps SMEs can take to gain advantage of this opportunity.

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Key new features of the UK Procurement Act

1. A simpler, more accessible procurement process

The complex and bureaucratic process is one of the biggest barriers SMEs face in public procurement. The new Act simplifies procurement by reducing red tape, standardising processes across different sectors, and making it easier for smaller businesses to compete.

2. A central digital platform for all contracts

Previously, SMEs had to search across multiple platforms to find opportunities. Under the new Act, all public contracts will be published on a single, easy-to-access digital platform, ensuring that smaller businesses don’t miss out on valuable contracts.

3. A focus on value, not just cost

The Act encourages public buyers to consider broader social, environmental, and innovation factors rather than just choosing the lowest price. This shift presents a significant opportunity for SMEs that can demonstrate strong ESG commitments. It opens up the discussion of value to be broader than just price.   

4. Better payment terms for SMEs

Late payments can be a major challenge for smaller businesses. The Act introduces faster payment obligations to ensure SMEs get paid on time, improving cash flow and financial stability.

5. A fairer system with stronger oversight

The new rules include proportionality requirements, meaning procurement processes must be fair and not overly burdensome for SMEs. Additionally, legal mechanisms to challenge unfair contract decisions will be strengthened.

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Steps to take to gain advantage of these changes:

The key to success is to understand the new rules, register on the UK procurement platform, and align business practices with social and environmental values.

With the UK public sector spending £300 billion annually, the UK Procurement Act presents a significant opportunity for SMEs to scale their impact, build resilience, and contribute to a fairer and more sustainable economy.

Here are some practical steps you can take:

📌 Get informed. Visit the Information and Advice for Suppliers page on GOV.UK, where you’ll find clear summaries, step-by-step guides, and videos to help you understand public procurement.

https://www.gov.uk/government/publications/procurement-act-2023-short-guides/the-procurement-act-2023-a-short-guide-for-suppliers-html

https://www.gov.uk/government/collections/information-and-guidance-for-suppliers

📌 Stay updated. Sign up for both the government and Profit Impact newsletters to receive the latest insights straight to your inbox.

📌 Deep dive into strategy. It’s a good idea to familiarise yourself with the same training materials provided to public sector buyers which can be found here—because understanding their approach helps you position your business for success.

📌 Talk to your customers. Changes in procurement mean shifts in buying behaviour. Start conversations with your regular clients now to anticipate opportunities and align your strategy.

📌 Deepen your commitment to running your business with purpose in mind. Creating a business that not only focuses on growth but also on people and the planet will be prioritised within the new contract considerations. How you demonstrate this will provide more opportunities for success.  

Remember, regulatory changes aren’t always just about compliance; the updates to the UK Procurement Act are about unlocking new business opportunities.

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How Profit Impact helps SMEs leverage the UK Procurement Act

At Profit Impact, we specialise in helping SMEs integrate social, environmental, and governance best practices into their business strategies. With the new Procurement Act placing ESG at the heart of public sector contracts, our expertise ensures that SMEs are compliant and stand out as preferred suppliers.

We support SMEs by:

1. Assessing and improving ESG performance to align with public sector expectations.
2. Providing sustainability reporting and impact measurement that strengthen procurement bids.
3. Helping businesses articulate their social value to meet procurement criteria beyond just cost.

If you're an SME looking to enhance your ESG credentials and secure more public contracts, Profit Impact is here to help. Get in touch to ensure your business is ready to thrive under the new Procurement Act.

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