In the rapidly evolving world of technology, procuring tech contracts within the public procurement framework presents unique challenges and opportunities. The Procurement Act 2023 (PA23), which came into force on 24 February 2025, introduces new dynamics that procurement professionals must learn to navigate to effectively manage tech contracts under the new public regime.
Challenges in tech procurement
One of the primary challenges in procuring IT contracts is the need to innovate within a rigid public procurement framework. Public procurement processes can often stifle creativity due to their very structured nature. To overcome this, procurement professionals are encouraged to engage with suppliers early and maintain open dialogues about potential solutions. Pre-market engagement techniques can be particularly useful as they enable teams to understand the latest innovations before formalising their requirements.
Another significant challenge faced when navigating IT contracts under the public procurement regime is the rapid pace of technological change. Tech contracts need to be adaptable to accommodate the continuously evolving nature of technology. To navigate this, procurement teams should be adopting agile procurement methods, such as shorter contract cycles or modular contracts, which allow for incremental updates during the contract term. Flexibility in contract duration can be achieved by incorporating options for extensions or break clauses, or including specific provisions for technology refreshes. Additionally, rolling contracts, which automatically renew unless terminated, can be considered, but it is crucial to plan this structure at the start of a procurement project so that it can be clearly set out in the procurement documents.
Opportunities and risks under the Procurement Act 2023
The PA23 introduces several opportunities for procurement practitioners operating in the tech space. One of the most significant is the increased flexibility in procurement processes, allowing for more tailored approaches which can lead to better outcomes.
The Competitive Flexible Procedure enables procurement teams to design processes aligned with their specific project needs and allows for a greater R&D-style approach in the early stages of a contract. This allows for deeper engagement with potential suppliers through interviews and demonstrations, leading to a better assessment of suppliers' capabilities and more informed decision-making.
The ability to refine specifications during the procurement process is another innovation under the PA23, which is particularly beneficial in technology procurement where specifications often need to evolve in response to new market offerings. There is a further encouragement of Preliminary Market Engagement, which can only help contracting authorities get a better idea of what the market has to offer, and ultimately, design better procurements.
However, with opportunity comes risk. One of the key risks for procurement teams will be ensuring compliance with the new regulations. While the PA23 offers flexibility, it also requires procurement teams to be diligent in maintaining transparency and fairness. There is also a risk of over-customising processes, which could lead to inefficiencies and put off potential bidders from taking part in procurements – particularly where they are start-ups or SMEs.
The flexibility of the PA23 provides unique opportunities to leverage cutting-edge solutions in the rapidly evolving technology sector. We are optimistic that it will allow procurement teams to engage with innovative suppliers, including the exploration of AI technologies that can enhance public services on a wider scale than ever before. Although procuring and managing tech contracts under the public procurement regime presents unique challenges, with the right strategies, a focus on flexibility, and proper planning, these challenges can be managed successfully.
For more information on procuring technology contracts under PA23, contact Louis Sebastian or Amardeep Gill.
