Public sector procurement

Public and private procurement have some fundamental differences. Those being the purpose, funding, regulations, scrutiny, and management. Look below at the major differences in procurement between private and public procurement.

Purpose of procurement:

The purpose of public and private procurement is different. Private sector procurement support business objectives of the organisation, designed to make a profit. In the public procurement sector, the main reason for acquiring goods is to support government operations and to provide public services. Although private sector can also support social benefits, it doesn’t tend to be their primary business objective.

Sources of funding:

Funding is another key difference between public and private procurement. Private sector procurement activity is funded by the company itself through owners and shareholders. However, public procurement is funded through taxes, grants and loans obtained by the government.

Regulations:

Public sector procurement is governed by public procurement rules. The rules set out the process of manging procurement and the methods that are permitted. Private sector procurement complies with contracts and commercial law, with methods of procurement only governed by internal policies.

Scrutiny:

As the public sector is funded by public money, public procurement can face bigger scrutiny due to the public sector procurement rules.

Management:

Private sector procurement professionals answer to a management reporting line and are solely responsible for their actions. Public sector procurement professions are public servants, so are directly accountable if they fail to manage public funds.

 

The Procurement Act 2023 is a new law in the UK that changes how public organisations buy goods, services, and works. It aims to simplify, streamline, and improve the way public money is spent, making the procurement process fairer and more efficient. Whether you’re a buyer working within a public body or a supplier to the government, this Act will impact how you engage in procurement. The Act is set to come into full effect in February 2025, giving buyers and suppliers time to prepare for these important changes. Understanding the new rules now will ensure you can make the most of the opportunities this reform brings

What does the act do?

It sets out clear rules for public buying and replaces older, complex EU rules with an easier-to-use UK-focused system. This change will help organisations save time and taxpayers’ money while encouraging fair competition and innovation.

Why is this important for you?

If you’re a buyer:

New procedures:

• You can choose between the “open” procedure (single stage) or the new “competitive, flexible” procedure (multi-stage). This flexibility allows you to design the process to suit your project, such as deciding how to shortlist suppliers or whether to allow negotiations.
• You’re no longer bound by strict criteria for when negotiation-based procedures can be used, giving you greater control.

Improved frameworks:

• The Act introduces “open frameworks,” which suppliers can join at different points during the framework’s term. This provides ongoing access to a broader range of suppliers without needing to start a new procurement each time.

Focus on innovation and value:

• Designing your criteria, you can emphasise value for money, public benefit, and sustainability goals. Allowing you to prioritise innovative solutions that align with your organisation’s broader objectives.

Streamlined compliance:

• Transparency and fairness remain key; the rules are simplified. This reduces the administrative burden, particularly for smaller contracting authorities.

If you’re a supplier:

Easier access: The Act introduces more straightforward procedures, reducing red tape. For example, suppliers can join “open frameworks” at multiple points, not just when they’re first created. This means more chances to compete for contracts over time.

Fair treatment: Public buyers must treat all suppliers equally. They can only treat you differently if there’s a valid reason, which increases trust in the process.

Transparency: Buyers must share key information about procurement opportunities, decisions, and contract terms. This helps you understand how contracts are awarded and ensures the process is open and accountable.

Focus on value: The Act prioritises value for money and public benefit. If you can demonstrate innovation, sustainability, or added benefits, it strengthens your bid.

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