Recent procurement reforms bring a suite of changes which property firms will need to consider when engaged in healthcare contracts, writes Anja Beriro, partner; and Jan Cumming, legal director, at UK and Ireland law firm, Browne Jacobson

Anja Beriro

The UK’s public procurement landscape underwent a significant transformation when the Procurement Act 2023 came into force on 24 February 2025, marking a decisive break from EU-derived regulations.

For construction companies working with healthcare organisations, this new legislation brings substantial changes to how contracts are procured and managed.

What is the Procurement Act 2023?

The Procurement Act 2023 establishes a unified framework encompassing public contracts for goods, services, works, utilities, concessions, and defence procurement across England, Wales, and Northern Ireland.

It aims to enhance efficiency, transparency, and accountability in public sector procurement.

The legislation represents a fundamental shift in procurement objectives, moving beyond the traditional focus on equal treatment and non-discrimination.

Those that can align their business practices with broader social, economic, and environmental objectives will be best placed to secure contracts in the healthcare sector under the new regime

Instead, contracting authorities are now mandated to deliver value for money, maximise public benefit, and act with integrity throughout the procurement process.

A key change is the replacement of the ‘most-economically-advantageous tender’ (MEAT) criterion with the ‘most-advantageous tender’ (MAT) approach.

This allows for broader consideration of factors beyond price, including quality, innovation, and environmental impact.

Contracting authorities are now mandated to deliver value for money, maximise public benefit, and act with integrity throughout the procurement process

In some cases, non-financial criteria may be the deciding factor in contract awards.

Jan Cumming

National Procurement Policy Statement

Under section 13 of the Act, the Government published the revised National Procurement Policy Statement (NPPS) on 13 February 2025, establishing strategic priorities that shape how public bodies must approach procurement under the new regime.

For construction firms working in healthcare, several key priorities from the NPPS are particularly relevant:

• Economic growth and innovation: Construction companies are expected to create opportunities for small businesses and social enterprises within their supply chains, while supporting high-quality employment with fair wages. There is an emphasis on fostering innovation and emerging technologies, especially those that align with the Government’s Industrial Strategy
• Environmental sustainability: A central focus is how construction projects can support the acceleration towards net zero. Construction firms must prioritise green building technologies and implement rigorous environmental standards, contributing to the nation’s ambition to become a clean energy leader. This is particularly relevant as the NHS works towards its commitment to reach net zero carbon emissions
• Community development: The NPPS emphasises strengthening community cohesion through procurement practices. Construction projects should be structured to facilitate employment opportunities for disadvantaged groups, supporting safer and more-inclusive communities, while addressing health inequalities in healthcare settings
• Opportunity and access: Construction companies must help address skills gaps and remove barriers for young people and under-represented groups, harnessing diverse talent pools and promoting inclusive growth

Impact on healthcare sector construction projects

For construction firms working with NHS trusts and other healthcare providers, the Act brings some key considerations:

• Full lifecycle approach: The Act covers the entire contracting lifecycle, from procurement through to contract management and expiry. For construction projects exceeding £5m, there is a new obligation on the procuring authority to insert at least three key performance indicators (KPIs) and regularly assess supplier performance against these metrics
• Transparency and reporting: Procuring authorities will need to adapt to new requirements for publishing procurement documentation and contract performance data. Construction firms must ensure they can meet these transparency requirements and be prepared for greater scrutiny of their performance
• Greater emphasis on social value: Construction projects will need to demonstrate how they support broader community benefits. This could include apprenticeships, work experience opportunities, and educational engagement with pupils
• Environmental considerations: There is an increased focus on sustainable buildings that minimise carbon footprints. Construction firms should be prepared to demonstrate their environmental credentials and ability to deliver sustainable facilities
• Supporting healthcare priorities: The NPPS explicitly recognises the role of procurement in supporting physical and mental wellbeing. Construction projects, regardless of setting, should consider the health impacts of their work on both staff and patients, reinforcing the connection between building design, construction practices, and health outcomes

Ongoing considerations for construction businesses

With the new procurement regime now in force, construction companies serving the healthcare sector should take several pro-active steps:
• Pro-active contract management: One of the Act’s most-significant changes is the requirement for regular performance assessment against published KPIs for larger contracts. Construction firms should ensure their contract management systems will enable them to engage proactively with clients to identify and address KPI issues before they escalate
• Risk of debarment: Suppliers that repeatedly fail to perform (including serious KPI failures) could be excluded from future procurements and placed on a central debarment list, bringing negative reputational and commercial consequences. Construction companies should ensure they avoid serious contract failure and maintain comprehensive records of performance
• Pre-market engagement: The Act encourages engagement with potential suppliers before formal procurement begins. Construction firms should participate actively in these discussions to help the procuring authority shape the procurement (including realistic requirements and KPIs), reducing the risk of problems during project delivery
• Supply chain responsibility: The focus on supply chain transparency means construction companies must conduct due diligence on their own suppliers and subcontractors. Poor performance anywhere in the supply chain could affect the primary contractor’s standing
• With increased emphasis on both procurement and contract management, conBuilding commercial capability: struction firms should invest in developing their commercial capabilities to navigate the new landscape effectively. This includes training staff on the new procedures and requirements

Opportunity to improve procurement processes

The Procurement Act 2023 represents a significant shift in how construction firms engage with healthcare organisations.

While adapting to these changes may cause short-term disruption, the legislation also provides opportunities for companies that can demonstrate genuine value beyond price.

By embracing the strategic priorities outlined in the NPPS, maintaining robust contract management processes and engaging proactively with clients, construction firms can position themselves successfully in this new procurement landscape.

Those that can align their business practices with broader social, economic, and environmental objectives will be best placed to secure contracts in the healthcare sector under the new regime.