Change & Transformation

Transformation of Public Sector Procurement in the UK - Collective and Collaborative Leadership 

Under the UK’s new Procurement Act of 2023 (PA23), set to come into force on 24 February 2025, exciting new processes and systems are being implemented. These promise major shifts in procurement processes for the UK market. Great initiatives and long-awaited changes aim to benefit both organisations and suppliers. But are we ready to truly change and improve long-standing ways of working? 
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If you are an organisation working with suppliers in the UK, a procurement team, a leader, or a supplier affected by PA23, this article is for you. My aim is to provide both supporting and opposing perspectives from well-established sources and literature. This offers an opportunity for debate and engagement on how we can collectively make this an effective and successful new way of working. We must avoid repeating past mistakes and support the aim of PA23, which inherently at its core is trying to do something different and shift the ways of working within procurement in the UK.

Introduction to the Procurement Act 2023 – Is It Fit for Purpose? 

The Procurement Act 2023 is intended to “simplify the procurement regulatory framework and the conduct of procurement procedures” (Pinsent Masons). However, it is far more complex in terms of compliance and legality. It is not easy to implement or to truly shift the status quo from a business psychology perspective. Bird & Bird point out that there is an overlap between the current and new framework agreements under PA23, meaning the two regimes will run in parallel for some time.

Challenges for Smaller Organisations 

Larger organisations tend to win public sector bids over smaller firms, generally speaking. They often have long-standing relationships that impact the selection process or have more resources that can be supplied at a low enough cost, potentially with reduced senior expertise, to secure their win. This has been a battlefield for many organisations trying to compete in the UK.

Smaller organisations, which tend to be specialists with a higher price point or small to medium-sized organisations, cannot compete with the bigger players due to the cost of services and travel required for smaller teams. This makes it non-viable for them to compete, leading them to self-assess their risks and benefits and often choose not to apply for tenders, even when they may be best placed to provide the specialist or expert services required.

Discussion on the New Procurement Act 2023 

My goal is to start a discussion about the new Procurement Act 2023. Are the organisations putting out tenders and those applying fully ready for the ‘Transformation’ the Act intends to generate? Will this truly deliver a level and fairer playing field that benefits all parties and ensures success via cost and quality in delivering these tenders?

Questions from a Business Psychology Perspective 

From a business psychology perspective, do we as leaders have a fair and real understanding of true collaborative work and the leadership behaviours needed to deliver on the intentions behind the new Act? Have leadership behaviours and collaborative requirements for the supply chain and procurement offices been prepared and developed to meet the intention of true transformation? Have we thought about how to transform beyond procurement and project-related checklists?

Examples of Blockers 

To illustrate my point, here are examples from real-life small organisations:

  • Payment Terms: Payment terms for bigger projects tend to be set up for 90-day terms. This does not support smaller businesses and creates a cycle of the same applicants who can deliver on cost and have enough capital to take on the 90-day delivery risks.
  • Tender Deadlines: Tender deadlines often favour suppliers with dedicated teams who can turn around responses quickly. Experts and specialists, who start from scratch with highly tailored responses, do not have the bandwidth for short timeframes, leading to the same suppliers responding to tenders.

These examples show that while the Act appears to have the correct intention, it continues the same cycle of the same suppliers, not encouraging diversity or a truly democratic process. The Act fails to address the decisions, behaviours, and systems behind how we procure suppliers and fair criteria. So, the question is whether the new Act will address these challenges and many more like it.

Leadership and Behavioural Changes Needed 

For true transformation, critical leadership decisions and behaviours must underpin and drive this throughout an organisation. This must happen before suppliers are selected and continue once the project process begins. Multiple suppliers procured at different stages of a project come with additional challenges to maintain ways of working. Identifying and establishing behaviours, intended ways of working, values, and human-centric requirements upfront would support the Act and its intention for true transformation.

Conclusion 

The Act’s intention is clear, but the missing piece is the human decision-making and shift required by leadership and those involved in the procurement and supply chain process. To drive transformation and change, we need a balanced approach with both process, systems, policies, procedures, and ways of working, culture, and behaviour.

For a fairer and equal opportunity for public sector procurement in the UK, we must grow our economy and limit the risks associated with what has become a procurement monopoly. This will benefit all enterprises and organisations, meeting the cost and quality outputs desired by tenders for the public’s benefit.

Call to Action 

My request is to start a discussion with leaders and procurement teams on how to collectively support the intention of the Act and challenge how we truly transform humans and organisations for the betterment of all involved.

For additional information to help guide the discussion, please see the following links:

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