Why the Procurement Act 2025 Matters for UK SMEs in Public Procurement
The Procurement Act 2025 is not just another regulatory update—it’s one of the most important reforms to public sector procurement in recent history. Officially implemented on 24 February 2025, the Act replaces outdated, EU-derived rules with a new, simplified framework. This transformation is designed to create a level playing field and make it easier for suppliers, particularly small and medium-sized enterprises (SMEs), to compete for government contracts. The Act also updates procurement priorities for public sector buyers, aligning them with new government objectives and a greater focus on SME inclusion.
So why does it matter for SMEs? For one, the Act introduces a legal duty for buyers to remove barriers that often held smaller businesses back. SMEs can now expect fairer access, less bureaucracy, faster payments, and clearer routes into public supply chains. During the transition period, it is crucial for SMEs to remain compliant with both the new Procurement Act 2025 and any ongoing obligations under previous regulations, such as the Procurement Regulations 2024 and the Public Contracts Regulations 2015. In short, the Procurement Act 2025 gives SMEs the tools to finally compete on merit rather than be blocked by red tape.
If you want to ensure you’re always a step ahead of procurement reforms, register with Supply2Gov and get tailored alerts that keep your business in the loop.
What Is the Procurement Act 2025? A Summary for SMEs
The Procurement Act 2025 (sometimes referred to as the Public Procurement Act 2025) is a unified set of rules covering how public authorities purchase goods, services, and works. The Act unifies public procurement procedures under a single framework and streamlines the procurement process for both buyers and suppliers. It consolidates multiple procurement regulations, including the transition from previous public contracts regulations such as PCR 2015, into one streamlined framework. Here’s what it means for SMEs:
- Simplification of procedures: A new Competitive Flexible Procedure allows buyers to design tender processes that suit the market, rather than sticking to rigid EU models. The open procedure, a straightforward procurement process with no pre-qualification stage, is also available, making it easier for SMEs to access and submit bids.
- Transparency: Public buyers must publish forward-looking procurement pipelines, giving SMEs early visibility of opportunities.
- Pro-SME framework: Contracting authorities are under a statutory duty to remove unnecessary barriers and create more accessible tendering environments.
- Prompt payment protection: 30-day payment terms are now mandatory across the public contract supply chain.
Key Procurement Act 2025 Changes SMEs Must Know
The new Act has introduced key changes that significantly impact public procurement, transparency, and opportunities for SMEs. Here are the most critical changes:
- Flexible bidding procedures – buyers can tailor competitions to allow negotiations, presentations, or innovative approaches.
- Open frameworks and dynamic markets – more frequent entry points for SMEs to join approved supplier lists.
- SME-friendly duties – buyers must actively consider the barriers SMEs face and take steps to remove them.
- Mandatory 30-day payment terms – improving cash flow across the supply chain.
- Guaranteed tender feedback – mandatory feedback is now required, providing bidders with formal assessment summaries and clear scoring breakdowns to help suppliers improve their future bids.
- Procurement pipeline visibility – large buyers must publish 18-month pipeline notices for planned procurements, helping SMEs anticipate upcoming opportunities. Spend data and market engagement notices also provide SMEs with valuable insights into procurement activities and market developments.
- Centralised digital procurement platform (Find a Tender) – making it easier to find, register, and bid for contracts.
- Debarment register introduction – ensuring transparency about excluded suppliers.
- Increased transparency and contract monitoring – supplier performance and key performance indicators must be published for large contracts, ensuring ongoing contract performance monitoring and public accountability.
Procurement Act 2025 Guidance for SME Compliance
Compliance under the Procurement Act is designed to be simpler, but SMEs still need to prepare carefully. Here’s how:
- Eligibility checks: Buyers may still ask for turnover thresholds, references, or insurance levels, but these must be proportionate to the contract size.
- Exclusion rules: Exclusion grounds now include both mandatory and discretionary reasons for disqualification. Serious criminal convictions are a mandatory exclusion ground under the new Act. Fraud, bribery, tax evasion, or serious past performance issues could disqualify you. Ensure your business has a clean record. Due diligence should extend to your parent company and subsidiaries to avoid being listed on the central debarment list. The central debarment list is used to identify suppliers who are excluded from public contracts.
- Transparency obligations: Suppliers must keep a detailed profile on Find a Tender, including ownership, finances, and compliance history.
SMEs must remain compliant with all relevant regulations, including during transitions between old and new rules. Remaining compliant with ongoing obligations is essential to avoid exclusion and maintain eligibility for public contracts.
The takeaway? SMEs that prepare documents in advance and regularly update their profiles will save time and avoid disqualification.
The SME Procurement Act 2025 Compliance Checklist
Here’s a comprehensive checklist to make sure your SME is ready to comply and compete:
✅ Register – the new central digital procurement platform.
✅ Set up your supplier profile – include company details, ownership, and compliance history.
✅ Prepare key compliance documents – insurance, accounts, certifications, and references.
✅ Review delivery processes – ensure you can meet audit, reporting, and ethical standards.
✅ Train your team on new procurement procedures – particularly the Competitive Flexible Procedure.
✅ Understand the initial tendering process – know how suppliers join frameworks and the importance of being pre-qualified.
✅ Monitor procurement pipeline notices – stay ahead of contract opportunities.
✅ Be prepared for contract modifications – understand the procedures, grounds, and notice requirements for amending contracts.
✅ Monitor contract performance notices – track supplier performance and compliance with KPIs in large-value contracts.
✅ Embed 30-day payment practices – both as a supplier and to your subcontractors. Use effective payment systems to ensure timely payments and support all suppliers involved in the supply chain.
✅ Conduct contract readiness reviews – ensure you meet all eligibility criteria.
Procurement Act 2025 Regulations, Contracting Authorities, and Contract Delivery for SMEs
The new procurement rules raise the bar for contract delivery. SMEs must:
- Keep accurate audit trails of how contracts are delivered, as contracting authorities may require regular reporting on contract performance.
- Demonstrate transparency and integrity in ownership and finances.
- Maintain fair payment practices across their supply chain.
- Stay proactive with compliance reporting, as contract performance is monitored through periodic contract performance notices. Maintaining compliance is essential for being eligible for awarded public contracts.
If you want to get practical help with these changes, learn how to respond to tenders with confidence via our Tenders Portal.
Public Procurement Act 2025: Opportunities and Challenges for SMEs
For SMEs, the Procurement Act is a double-edged sword—it creates exciting opportunities but also introduces higher compliance expectations:
- Opportunities: Easier market entry, guaranteed feedback, faster payments, and better visibility of future opportunities. The new regime and new procurement regime are designed to create more accessible opportunities for SMEs by streamlining processes and increasing transparency. Public sector buyers and public bodies are adopting new procurement models to support SME participation, making it easier for smaller suppliers to compete. The government’s commitment to transforming public procurement also enables contracting authorities to be more flexible in awarding contracts and adapting procedures to suit specific needs.
- Challenges: Maintaining accurate documentation, meeting proportionate eligibility criteria, and adapting to flexible bidding procedures. Procurement decisions are now more transparent and standardized, requiring SMEs to ensure compliance with updated regulations and processes.
The SMEs that will thrive are those that embrace both sides of the coin—seizing opportunities while embedding compliance into everyday business processes.
Want to explore these opportunities in more detail? Talk to our procurement experts today.
Final Checks: Is Your SME Ready for the Procurement Act 2025?
Before you submit your next bid under the new rules, ask yourself:
- Have we registered on the new Find a Tender platform?
- Do we have up-to-date company details, accounts, and certifications ready?
- Do we understand the Competitive Flexible Procedure and how to respond?
- Are we fully committed to 30-day payment practices?
- Have we reviewed our risk of exclusion under the new rules?
- Are we remaining compliant with both the new Procurement Act 2023, Procurement Regulations 2024, and existing regulations like the Public Contracts Regulations 2015?
- Are we eligible to be awarded public contracts, and have we checked for any grounds for exclusion or debarment?
- Are we using feedback from previous bids to improve our future bids?
If you answered “yes” to these, your SME is ready to compete confidently in the new procurement landscape.
Stay Compliant, Stay Competitive, and Win More Public Contracts
The Procurement Act 2025 was designed to simplify public procurement and make it more inclusive for SMEs. But success requires preparation. By using this compliance checklist, maintaining accurate documentation, and staying proactive with alerts, your SME can gain a competitive edge.
✅ Stay compliant and competitive—register now with Supply2Gov to receive personalised alerts and guidance.
✅ Have questions about the Procurement Act 2025? Contact our support team for expert advice tailored to SMEs.