Public procurement in Wales is on the brink of a significant transformation. With the introduction of the new Procurement Act, the landscape is shifting toward a more inclusive, transparent, and thoughtful approach.
The Act's intention is clear – to streamline procurement processes, enhance social value, and open up more opportunities for small and medium-sized enterprises (SMEs) to participate in public sector contracts. But what does this mean in practice, and how will it change the way public sector contracts are awarded?
One of the key changes in the new Procurement Act is the shift from the “Most Economically Advantageous Tender” (MEAT) to the “Most Advantageous Tender” (MAT). At first glance, this change might seem small- a tweak in wording – but the effects are substantial. Previously, procurement decisions were often dominated by financial considerations. Who could deliver the goods or services at the lowest cost while meeting the necessary requirements? This economic focus often sidelined other critical factors, such as social value, environmental impact, and fair work practices.
Under the new system, the emphasis is on broader outcomes. In Wales, these are framed through the lens of wellbeing outcomes, in line with the Well-being of Future Generations (Wales) Act 2015. This shift encourages buyers to consider a wider range of factors when assessing bids, such as how the tender will contribute to local communities, improve social equity, and support long-term sustainability goals. It’s about maximising value, not just minimising cost. This approach echoes the social value framework being used in England but is more attuned to Wales’ specific legislative context.
In Wales, the new Act also aligns closely with the Social Partnerships and Public Procurement (Wales) Act 2021. This legislation reinforces the importance of social partnerships in procurement and requires public bodies to consider fair work principles when awarding contracts. Fair work involves ensuring that workers are treated justly, paid fairly, and given opportunities for growth and development. By embedding these principles into procurement, the Act helps to ensure that public spending supports not only economic growth but also social justice.
This shift represents a sea change in how procurement is viewed. Rather than being seen solely as a transactional process, procurement is now recognised as a strategic tool that can drive positive social and economic outcomes. The move toward wellbeing outcomes places Wales at the forefront of this progressive approach.
One of the primary goals of the new Act is to simplify the procurement process, making it less onerous for both buyers and suppliers. The previous regulations, last revised in 2015, were seen by many as cumbersome and restrictive. The new Act introduces more flexibility, particularly through the introduction of the “competitive negotiated procedure”.
This new procurement method allows councils and public bodies to design procurement processes that suit their specific needs. Instead of relying solely on a rigid, one-size-fits-all tender process, buyers can now engage in more in-depth conversations with potential suppliers, particularly in more complex procurement scenarios. Multiple stages of negotiation and engagement mean that suppliers, including SMEs, have more opportunities to demonstrate their value and ensure that the final contract is tailored to the project’s unique requirements.
This flexibility also extends to transparency requirements, a key element of the new Act. While the full impact of these transparency measures is yet to be seen, the intention is to make public procurement more accessible and open to all. For SMEs, which often feel shut out of public sector contracts, this increased transparency should provide clearer information about upcoming opportunities, making it easier for them to compete.
Perhaps the most exciting aspect of the new Procurement Act is its focus on SMEs. Historically, larger companies have dominated public procurement, particularly for high-value contracts. But the new act explicitly requires public bodies to consider SMEs in all procurement processes. Even for major contracts, where larger players may have an advantage, buyers are now required to think about how they can make it easier for smaller businesses to participate.
This could mean dividing larger contracts into smaller lots, ensuring that SMEs aren’t excluded from bidding simply because the contract size is too large. It also involves removing unnecessary barriers that may prevent smaller businesses from engaging in the procurement process. By encouraging more SME participation, the Act is designed to create a more diverse and competitive supply chain, benefiting both the public sector and the Welsh economy as a whole.
The new act challenges everyone involved in procurement – both buyers and suppliers – to do better. On the buyer side, it requires a shift in mindset, encouraging public bodies to think creatively about how procurement can deliver social and economic value, not just financial savings. On the supplier side, it encourages SMEs to engage more proactively with the procurement process, recognising that the barriers they once faced are being dismantled.
At its core, procurement is about delivering value. And when that value is paid for by the public purse, it is even more important to ensure that every pound spent benefits society as a whole. The new Procurement Act is a bold step toward making public procurement more inclusive, more strategic, and ultimately more beneficial for the people of Wales.
