As we enter the new year, it’s time to look forward at some of the key trends and topics bidders and buyers alike should be aware of in the public sector procurement landscape.
Various legislative, economic and social developments have made it even more challenging to produce high-quality tender submissions to public sector buyers. To remain competitive in the tender market, UK businesses and particularly SMEs should be aware of and begin making preparations for the following bid and tender trends as we move into 2024.
Preparing for the Procurement Act 2023
After careful consultation, debate and consideration of amendments, the Procurement Act 2023 received royal assent on 26 October, ushering in the largest changes to public sector procurement in over a generation. However, to ensure bidder organisations and contracting authorities have adequate time to adjust to the new changes, the Act is not due to come into force until October 2024.
Consequently, 2024 will be a busy time for bid writers and bid managers to get their organisation up to speed with new legislation, including (but not limited to):
- Simplifying and reducing tender procedures with the new ‘competitive flexible’ procedure absorbing the majority of others
- Focusing on evaluating the winning tender submission from ‘most economically advantageous tender’ to ‘most advantageous tender’ signalling an embrace of wider public benefits in lieu of best-price options
- Mandatory KPI assessment and publication for all contracts over the value threshold of £5 million, subjecting suppliers to increased scrutiny
- A public ‘debarment’ list for underperforming suppliers, leading them to be excluded from future competitive tender exercises.
In the coming year, Executive Compass will release a series of articles concerning different topics within the Procurement Act 2023, giving you tips, advice and guidance on best practice to ensure your organisation is ready for implementation in October.
Building safety and the ‘golden thread’
Coming into force on 1 October 2023, the Building Safety Act 2022 made it a legal requirement for all high-risk residential buildings (HRBs) to be registered with the Building Safety Regulator – currently overseen by the HSE. Qualifying buildings must be at least 18m or seven storeys high, and contain two or more residential units or are used for delivering care – for example, hospitals or residential care homes.
For relevant projects, we expect to see a continued increase of quality questions regarding legal compliance and organisational approaches to building safety regulation, such as how bidders will preserve the mandatory ‘golden thread’ of information on a fully digital platform.
It may also be necessary to upgrade your digital record management system in order to comply with new regulations and guidance. Although this could incur significant costs, it is necessary in order to maintain compliance with legislation and best practice.
Biodiversity net gain, sustainability and reducing carbon emissions
In July 2023, we reviewed the impacts biodiversity net gain, a flagship policy outcome of the Environment Act 2021, which requires all UK construction and development projects to deliver a 10% improvement in the biodiversity of the site.
Initially scheduled to come into force by November 2023 for medium- to large-sized sites, the government altered this timeline to January 2024 following appeals from the House Builders Association that the proposed implementation date would have an outsized impact on small businesses.
Our team of bid writers and quality reviewers have further noted an increase in the number of questions around environmental practices and sustainability, in addition to greater weighting placed on these questions. As the central government attempts to meet its ambitious environmental and sustainability policies, we expect this trend to continue into 2024.
Lastly, the introduction of the Clean Heating Market Mechanism (CHMM) has seen a new market levy on fossil fuel boilers in an attempt to stimulate interest in cleaner alternatives, such as air source heat pumps. We have already seen this lead to the abandonment of gas and heating tenders regarding uncertainty around pricing elements of installations – a trend that is likely to continue as CHMM came into force on 1 January.
Prompt payment across public sector supply chains
Improving the overall health of supply chains and fostering a positive ‘payment culture’ is at the forefront of government buyers’ priorities, particularly as they attempt to encourage small- and medium-sized firms to do more business in the public sector. However, the effects of inflation have had an outsized impact on the overall financial health and cashflow of British businesses.
The construction industry in particular was hard-hit by the perfect storm of inflation, the COVID-19 pandemic and increase in wholesale materials prices due to the ongoing conflict in Ukraine. By October, over 4,000 construction firms had gone insolvent in 2023, comprising 16.2% of total insolvencies across England and Wales and representing a 34.2% industry increase from 2019.
To further encourage good payment practices across all aspects of the public sector supply chain, the Cabinet Office issued PPN 10/23 at the end of the year, requiring all tenderers to report the percentage of invoices paid within a limit of days and an overall average of settling non-disputed invoices within at least 55 days of receipt.
Although inflation statistics are steadily improving, many businesses are still reporting cashflow issues, and this looks to remain a key bidding consideration in the coming year.
Continued use of artificial intelligence in bid writing
Following a months-long strategic review from Technical Director Matthew Walker, we released our thoughts on the use of artificial intelligence in bid and tender writing last summer. This included a summary of the following:
- The opportunities, risks and challenges inherent to using artificial intelligence and large language models (LLMs) such as Chat-GPT when completing a tender.
- Limitations to using AI when writing a tender response, including the production of overly generic content which is easily identifiable to trained and experienced bid evaluators.
- Potential impact for using AI and LLMs across all bidder organisations – for instance, although AI may ‘raise the floor’ for lower-quality tenders, it will only intensify competition at the top end of the spectrum, requiring a greater emphasis on detailed and bespoke content.
- Practical advice and Executive Compass’s official stance on utilising AI correctly when writing the quality element of a tender, including restricting its use solely to support our bid and tender writing team’s research when drafting responses.
More industries are reaching the ‘deployment’ phase of artificial intelligence where the workforce are supported in every-day tasks by AI, saving businesses time and money. Equally, as LLMs continue to evolve and expand the scope of their application, we expect the bid and tender writing industry to adapt accordingly – for example, the embrace of AI detection software currently used by further and higher level education.
Supporting you with bid and tender submissions
We will continue to monitor these topics amongst others which develop throughout 2024, supporting our reputation as thought leaders within the bid and tender writing sector.
The new year will also see the expansion of our bid writing training services, a brand-new care division to support demand from new and existing care clients, and continued delivery of bid writing masterclass and drop-in surgeries for NEPO’s Supplier Partnership Programme, helping North East-based businesses to understand the world of public sector procurement.
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Posted on 09-02-2024